Construction on the Gateway Tunnel continues — workers building a second rail tunnel under the Hudson River are due to complete the project in 2035.
However, those backup tracks — designed to make train service between New York and New Jersey more reliable — are in jeopardy because of federal funding.
What You Need To Know
The U.S. Department of Transportation stopped paying reimbursements to the Gateway Tunnel in October, citing changes to rules surrounding contracting based on race and sex
USDOT was only forced to pay by court order in a separate suit brought by New York and New Jersey
The Gateway Development Commission filed suit in a different court, but because the $205 million in outstanding payments were made, six of the eight counts of its lawsuit were dismissed
The USDOT tried to stop the order forcing payment, but an appellate court denied the motion for a stay
The Gateway Development Commission (GDC) is suing the feds to keep the money coming, and Thursday a judge in Washington, D.C., tossed six of eight counts in that suit.
Catherine Rinaldi, executive vice president of the GDC, says the ruling is not a loss.
“What he said from the bench was that GDC had preliminarily established that there was a breach of contract here on the part of the federal government,” Rinaldi said.
The Commission’s lawsuit claims the U.S. Department of Transportation breached its agreement to fund 70% of the $16 billion tunnel. But the feds stopped payments in October, citing a change in rules relating to contracting based on sex and race.
GDC complied, but the funding never resumed. That forced work to stop for one week in February, laying off about 1,000 workers.
An order in another suit filed by New York and New Jersey that is still pending, however, forced the feds to start paying — USDOT coughed up $205 million.
The feds tried to stop that order too, and an appeals court denied that motion Wednesday. Since the money was paid, most of Gateway’s lawsuit was tossed. Even with the two counts proceeding, there is still no guarantee funding will continue.
“They don’t have the ability to issue an injunction to prevent the government from withholding the money going forward,” Rinaldi said.
The GDC will have to go back to court if they aren’t paid, and Rinaldi says there could be another work stoppage if that happens.
“If we’re not able to reestablish a consistent, reliable source of funding, we can’t continue forever. The funding is, based upon our analysis, only going to take us, you know, another two to three months before we might be back where we were February 6th.”
In response to the rulings this week, the feds said in a statement, “USDOT is committed to ensuring hardworking taxpayer dollars are being spent responsibly. We are considering all legal avenues on their behalf.“