BALCONY - Business and Labor Coalition of New York
April 12th, 2017


While the Obama administration was a staunch supporter of building a new cross-Hudson tunnel, President Donald Trump’s proposed executive budget cuts funding programs on which tunnel builders expected to rely. | AP Photo/Bebeto Matthews

By Dana Rubinstein

With President Donald Trump proposing dramatic cuts to transportation funding, the officials charged with building a multi-billion-dollar, nationally important rail tunnel beneath the Hudson River have begun to explore private funding mechanisms.

A public-private partnership is “certainly one of the things that we want to explore,” said Richard Bagger, chairman of the Gateway Development Corporation, the entity tasked with building the tunnel.

A “public-private partnership” is an ill-defined term that, broadly speaking, refers to governments enlisting private sector help on big initiatives, in exchange for the private sector getting a cut of the pie.

That the Gateway Development Corporation is exploring that sort of arrangement is a testament to the new reality in Washington.

While the Obama administration was a staunch supporter of building a new cross-Hudson tunnel, Trump’s proposed executive budget cuts funding programs on which tunnel builders expected to rely.

Publicly, the president has equivocated about his intentions, vis-a-vis the tunnel project.

“Well, I may support them,” Trump said recently, referring to the tunnel and to the second phase of the Second Avenue Subway. “I’m going to look at them.”

The so-called Gateway Program would, among other things, build a new tunnel beneath the Hudson to relieve pressure on the existing, more-than-century-old one that’s both at capacity and falling apart. It’s the successor project to Access to the Region’s Core, another funded cross-Hudson tunnel project that New Jersey Gov. Chris Christie unilaterally killed, citing cost concerns.

Amtrak controls the existing tunnel, but NJ Transit relies on it. Two recent derailments at Penn Station, to which the tunnel connects, underscored the fragility of the system. With eight of 21 Penn Station tracks out of service, and no tunnel redundancy, hundreds of thousands of riders saw their commutes thrown into disarray for nearly a week.

Given the current condition of the tunnel, experts say commuters should expect more of the same for years to come.

In Washington, Trump administration officials have talked about public-private partnerships as an element of the president’s yet-to-be-released $1 trillion infrastructure plan.

“Everybody wants a better transportation system, but very few people want to pay for it,” Trump transportation secretary Elaine Chao said in February. “But as we go forward, we do look forward to, for example, public-private partnerships. That is not the answer for everything, because there is a cost to that.”

How viable a public-private partnership might prove for the cross-Hudson tunnel remains to be seen.

“They would need a certain repayment stream,” said Nicole Gelinas, a transportation expert at the Manhattan Institute. That, she says, means “ working out a schedule of guaranteed fees from Amtrak, New Jersey Transit, and the LIRR for a good 30 to 50 years, at rates much higher than any of these users are accustomed to paying.”

Funding mechanisms aside, officials at Tuesday’s Gateway Development Corporation board meeting expressed confidence the Trump administration would in some way fund the mega project, if only because it’s so important.

“These are programs of national significance that are fundamental to the economy of the region as well as of the country and enjoy strong bipartisan congressional support, strong support from both of our states and the work needs to get done,” said Bagger, who served on Trump’s transition team.

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