Construction of the $16 billion Gateway rail tunnel will resume this week after a nearly four-week shutdown idled 1,000 workers.
Gateway Development Commission officials announced the restart on Tuesday, after federal officials on Feb. 20 paid the $235 million owed in reimbursements due to President Donald Trump’s administration freezing funding in October.
“Workers are on site today, and clearing snow is one of the activities involved in restarting construction,” said Molly Beckhardt, a commission spokeswoman.
That good news was tempered with a warning.
Two major contracts scheduled to be awarded to build the Hudson River Tunnel and New Jersey railroad track Surface Alignment will remain on hold until funding is guaranteed, officials said.
Those contracts will remain on hold until the commission regains access to all $15 billion in federal grants and loans that has been paused since Oct. 1, 2025. Both were scheduled for award in late 2025 or early 2026, officials said.
The announcement means that work can at least resume on the five projects in New Jersey and New York including the start of the first tunnel boring through the Palisades in North Bergen.
“I look forward to celebrating the launch of our tunnel boring machines through the Palisades once GDC has assurance it will receive the steady flow of funding needed for this mega-project,” said Balpreet Grewal-Virk, New Jersey commissioner and co-chair of the commission.
The announcement is good news for the 1,000 workers who were laid off on Feb. 6, when construction was halted after funds ran out. The commission had used a $500 million line of credit to keep the project moving while it provided proof of rule compliance to get the Federal Transit Administration to release funds and grants agreed to in 2024.
“Hundreds of workers will return to GDC’s construction sites in New York and New Jersey,” said Alicia Glen, New York commissioner and commission co-chair. “This is great news for these workers, the hundreds of thousands of riders who take the train to New York City every day, and the entire region.”
But she also cautioned the commission and public officials will have to fight to ensure the remaining federal funding will continue to be paid.
“We cannot take our eyes off the ball. We need every federal dollar accounted for in our grant and loan agreements to build this tunnel,” she said.
Funding has been in flux since Trump declared the project “terminated” on Oct. 15, 2025.
Last December, his administration said Gateway funding would be released for Democrats’ support of the full Department of Homeland Security funding in the federal budget.
Trump denied news reports that he offered to release Gateway funds in exchange for renaming New York’s Penn Station and a Washington, D.C. airport for him.
New Jersey and New York and the commission sued federal agencies earlier this month, charging they are in breach of contracts signed in July 2024. Those cases are still pending.
A federal judge ordered the $235 million withheld since October released. Gateway officials said all of that money has been received.
Commission officials thanked New Jersey Gov. Mikie Sherrill and New York Gov. Kathy Hochul, members of the bi-state congressional delegation, unions and trade associations for supporting restoration of the funding.
“Gateway and the hardworking men and women on the job deserve certainty to complete the most consequential infrastructure project in the country,’ said Sean Higgins, a spokesperson for Sherrill. ”Governor Sherrill’s position is clear: the Trump administration needs to keep funds flowing or she will see them in court and win, again.”