ICYMI: Gateway Development Commission Files Breach Of Contract Claim Against Federal Government
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By Adam Rizvi | Editor, The India Observer (TIO): NEWARK / NEW YORK — The Gateway Development Commission (GDC) has filed a breach of contract lawsuit against the federal government in the U.S. Court of Federal Claims, seeking the release of grant and loan funds that were previously committed to the Hudson Tunnel Project (HTP), one of the most critical rail infrastructure projects in the United States.
According to the filing, the federal government has suspended the release of contractually obligated funding since October 1, 2025, despite binding grant and loan agreements executed in July 2024. GDC argues that the funding freeze violates federal contracts and places the project — and thousands of jobs — at immediate risk.
GDC warned that if additional funding is not released by February 6, 2026, construction on the Hudson Tunnel Project will be forced to pause, resulting in the immediate loss of nearly 1,000 jobs. A prolonged stoppage could ultimately threaten approximately 11,000 active construction jobs and jeopardize the 95,000 jobs and nearly $20 billion in economic activity projected over the life of the project.
The Hudson Tunnel Project includes construction of a new rail tunnel under the Hudson River connecting New Jersey and New York, along with rehabilitation of the existing North River Tunnel, which has been in continuous use since 1910 and remains a major source of delays on the Northeast Corridor. More than 200,000 daily commuters rely on this corridor, which supports roughly 20 percent of the nation’s economic output.
The majority of the project’s funding comes from federal sources, including Capital Investment Grants, Federal-State Partnership grants, RAISE grants, and Railroad Rehabilitation and Investment Financing (RRIF) loans. GDC stated that more than $1 billion has already been invested in construction and related work.
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In its complaint, GDC asserts that it has consistently complied with federal requirements, including documentation related to its Disadvantaged Business Enterprise (DBE) program, and worked cooperatively with federal agencies in an effort to restore funding.
New York Governor Kathy Hochul described the funding freeze as a direct threat to the region’s economy, emphasizing the project’s importance to commuters and workers across both states. New Jersey Governor Mikie Sherrill said the lawsuit reflects a commitment to protect jobs and economic opportunity and to hold the federal government accountable for contractual obligations.
U.S. Senate Majority Leader Chuck Schumer called the Gateway project the most important infrastructure investment in the country and warned that continued delays put tens of thousands of union jobs at risk.
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GDC Chief Executive Officer Tom Prendergast said the commission’s goal remains to keep construction moving while enforcing the federal government’s contractual responsibilities. He noted that all available funding sources and credit have now been exhausted, leaving GDC with no choice but to pursue legal action to avoid a shutdown.
In addition to seeking the release of approximately $205 million in overdue disbursements, the lawsuit also seeks damages related to costs incurred if construction is paused or contracts are terminated.
The Hudson Tunnel Project is essential to the reliability of the nation’s busiest passenger rail corridor. A prolonged funding disruption could worsen daily delays, threaten thousands of jobs, and risk shutdown of century-old infrastructure relied upon by commuters, businesses,  and the regional economy.
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Source: Statement and court filing released by the Gateway Development Commission.
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