While the Hudson River rail tunnel project — the Gateway Tunnel — is back on track after the states of New York and New Jersey sued to get the federal government to restart funding, the MTA has not seen any of the money promised for the Second Avenue subway extension to 125th Street since October.

The notice of the funding hold came from an Oct. 1 tweet from White House Budget Director Russell Vought that said $18 billion in infrastructure projects were put on hold because of a new federal rule around contracting based on sex and race. MTA officials say they complied.

What You Need To Know

While the Hudson River rail tunnel project — the Gateway Tunnel — is back on track after the states of New York and New Jersey sued to get the federal government to restart funding, the MTA has not seen any of the money promised for the Second Avenue subway extension to 125th Street since October

The MTA threatened the U.S. Department of Transportation with legal action if the nearly $60 million in reimbursements are not paid by March 6

The Gateway Development Commission said they have deferred the awarding of contracts, which could impact the project’s budget and schedule

Transportation Secretary Sean Duffy called the Second Avenue Subway an important project back in the fall, and $3.4 billion of the $7 billion project is federally funded

“We’ve had no further feedback from them on it,” MTA Chair and CEO Janno Lieber said. “And there have been public statements to the effect that the projects are being held hostage for congressional negotiations, that the White House wants to have. So it’s time for us to get this back on track, and so we’re letting them know, you know, time’s up.”

The MTA let the U.S. Department of Transportation know in the form of a letter sent Wednesday, threatening legal action if the nearly $60 million in reimbursements are not paid by March 6. Lieber says if the money does not come through, it would put the next contract they have to award in jeopardy.

“There’s an excavation contract that needs to get awarded,” Lieber said. “And we can’t, you know, chance that impact to the project’s schedule and budget by letting the federal situation drag on and on.”

The Gateway Development Commission said it was in the same situation in a court filing Tuesday.

“Due to the uncertainty of continued funding, GDC has deferred the award of major contracts necessary to continue the HTP (Hudson Tunnel Project) on its established schedule,” the commission said. “As a result of the work suspension that was in place between February 6, 2026 and February 22, 2026, GDC has incurred millions of dollars in additional costs.”

Lieber says they haven’t yet calculated the damages if they don’t get the funding, but it will have an impact.

“If we are forced to delay it, you have consequences throughout the project because there are dependencies between these different contracts that do actually impact cost and schedule,” he said.

Transportation Secretary Sean Duffy called the Second Avenue Subway an important project back in the fall, and $3.4 billion of the $7 billion project is federally funded.

NY1 reached out to the Department of Transportation for comment and has not heard back.