Long-Delayed NYC Train Tunnel Gets Boost in U.S. Budget Bill

(Bloomberg) -- The $30 billion New York City-area Gateway rail project overcame a major financial hurdle, with New York and New Jersey now allowed to count federal loans toward their share of the funding.

The infrastructure plan, which includes a second tunnel between New Jersey and Manhattan and other improvements, has been stalled by President Donald Trump, who demanded that the two states foot more of the cost. In letters a year ago to Amtrak and New Jersey Transit, the project’s railroad partners, U.S. Transportation Secretary Elaine Chao said the states’ payments must be in a form other than U.S. government loans.

In a major reversal, though, the bill signed by Trump that funds federal operations through September includes “crystal clear” language stating the states can do as originally planned, according to Jerry Zaro, chairman of the Gateway Project Development Corp.

“The Gateway projects will access these loan programs, and New York, New Jersey and the Port Authority of New York and New Jersey will pay them back,” Zaro said in a statement.

The appropriations bill includes $650 million for Amtrak’s Northeast Corridor, “a significant portion” of which will go toward Gateway, according to Representative Jerry Nadler, a Democrat whose district includes Manhattan and Brooklyn.

©2019 Bloomberg L.P.