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Contractors on the ground will have to wait at least until Thursday to see if the funding tap gets turned back on for the embattled $16 billion Hudson Tunnel Project.
A federal judge in New York on Feb. 6 ordered the U.S. Department of Transportation to resume federal funding for the infrastructure job, currently the largest in the country. However, President Donald Trump’s administration filed an appeal challenging the decision on Feb. 8. A judge on Monday gave the government until Thursday to resume funding as the appeal works its way through the courts, according to the Center Square.
In the meantime, nearly 1,000 workers have been laid off, according to the Gateway Development Commission, which is overseeing the project. But other workers must stay on the job, the GDC said in a lawsuit filed to regain funding, since unfinished work sites currently have massive holes in the ground that cannot be left as they are.
To cover those holes, the GDC said it would have to spend another $15 million to $20 million a month in patch work. Those suspension costs would also be used to demobilize work crews, manage, secure and make safe various construction sites, in addition to removing and storing heavy equipment.
Funding threats began last fall, when the Trump administration questioned the legality of the Department of Transportation’s Disadvantaged Business Enterprise program. As a federally funded build, Gateway had complied with federal DBE requirements for workforce participation goals for women, minorities and veterans. At the time, general contractor Tutor Perini said progress was continuing on schedule.
For four months, construction continued after the administration targeted the project’s funding, due to the GDC drawing on reserves and a line of credit. But by late January, those resources had dwindled and were no longer feasible to continue funding the project, according to the GDC.
Green light, red light on funding
Without the federal funds, the Gateway Development Commission stopped all construction progress on Feb. 6. The GDC has also put four other major procurements on hold.
The GDC filed a lawsuit against the Trump administration on Feb. 2 for breach of contract. The states of New York and New Jersey also filed a separate lawsuit against the administration the same week.
Now, the commission and its workers are waiting to know if they’ll be able to return to work. After the Feb. 6 order directed the government to resume funding, GDC told Construction Dive, “We are hopeful this means funding disbursements will resume soon, and we can start site operations and get our workers back on the job.”
Federal grants account for roughly $12 billion of the project’s budget, or around 70%. Los Angeles-based Tutor Perini declined to comment for this article. GDC laid blame for the stoppage squarely on the federal government.
“On September 30, 2025, DOT threw the future of this massive public works project into serious doubt by suspending the release of funds it was contractually obligated to pay to GDC under a set of binding grant and loan agreements,” the GDC wrote in its lawsuit. “Since that date, DOT has withheld a total of $205,275,358 in payments owed to GDC under the HTP Grant and Loan Agreements.”
Project stakeholders had expected 2026 to be full of milestones for the Hudson Tunnel Project, said Balpreet Grewal-Virk, New Jersey commissioner and co-chair at the Gateway Development Commission. Plans included the awards of two major construction contracts and the creation of tens of thousands of jobs. Contractors had also been expecting to start tunnel boring in New Jersey later this year, she added.
“In the days and weeks ahead, GDC is going to continue doing everything we can to get funding restored so the many hardworking men and women employed by the Hudson Tunnel Project can get back to work, and we can go back to celebrating milestones on the way to delivering this urgently needed new tunnel,” Grewal-Virk said.
