Budget trimmed to advance Hudson Gateway 19 Sep 2019

A major cost reduction has been submitted in a revised budget for the new Hudson River underpass as part of the long-awaited New York-New Jersey Gateway scheme. Project developers state that the cost cuts reduce the budget of the new under river tunnel works to US$9.5 billion from previous estimates of US$11.1 billion.

Fig 1. Alignment of Gateway Hudson River underpass

Project delivery group, the Gateway Program Development Corporation (GDC), reports that overall cost of the project is reduced by US$1.4 billion to US$11.3 billion from estimates of US$12.7 billion. The cost reductions are said to be secured through extra design, fewer contract lots, wider procurement options, including design-build, and a risk and value-for-money analysis. GDC is working in partnership with Amtrak, NJ Transit and the New York and New Jersey Port Authority, and the administration of both State governments.

In addition to the twin rail tunnels under the river, underground infrastructure for the project includes a short concrete portal in the Hudson Yards development site on the west side of Manhattan and rehabilitation of the existing twin-tube North River rail link under the Hudson into the Pennsylvania Station terminus in Manhattan. The Hudson Yards works were completed in early stage works during 2013-2016 and environmental clearance is awaited to close out those local works. The budget for rehabilitation of the existing twin-tube rail link under the Hudson, which is more than 100 years old, has increased from US$1.6 billion to US$1.8 billion in recent estimations.

Early project works as part of Hundson Yards redevelopment in Manhattan

The net effect of the change in costs for the underground works, new and rehabilitation, is a 11% overall reduction to US$11.3 billion, including capital and financing costs.

While much of the cost will be met locally, the project is seeking a funding contribution from the Federal Transit Administration (FTA) of US$4.36 billion down from an earlier request for US$5.65 billion, which equates to the total reduction of US$1.4 billion saving in overall project cost estimates. GDC submitted the revised project budget to FTA in late August 2019.

Before sign-off of funding sources, GDC plans to seek an early systems work agreement to start to tunnel boring ahead of receiving a full funding grant agreement from the FTA. The move would help save time and cost, and give momentum to completing the long-delayed project.

GDC reports that design is advanced to a point where contract tendering can begin. The updated financial plan proposes a start of major construction work in early 2020, if Federal approval of the environmental impact statement (EIS) is gained this year. It noted however, that notice-to-proceed may not come until early 2021. The EIS was submitted to the FTA in February 2018 but no timeline on the decision has been given and extra information has not yet been called for.

The Gateway project is needed to add extra rail capacity between New York and New Jersey and make the region’s transport network more robust. While long wanted, the project stalled 10 years ago when the Access to the Region’s Core (ARC) initiative was cancelled. Estimated at US$8.7 billion (in 2009 figures), contracts had been awarded as part of the ARC project and the early works in Hudson Yards in Manhatan were advanced under those ARC contracts. Termination of contracts and cancellation of the ARC project carried a high cost.

Cast concrete route under Hudson Yards development in Manhattan

Since cancellation of the ARC project, the North River rail link under the Hudson, opened in 1910, has deteriorated further, having suffered significant flood damage caused by the 2012 superstorm Sandy. At a GDC board meeting in July this year (2019), causes of major incidents and delays in the North River Tunnel for the period 2014-2018 were put down to:

• Overhead power faults 35%
• Track conditions 31%
• Signal problems 13%
• Others 21%

The tunnel is a strategic transportation lynchpin in both New York and New Jersey and in the wider Northeast Corridor rail network. Rehabilitation of the old existing tunnels is planned to follow completion of the first of the new twin bored tunnel when each of the old tunnels can be taken off line to complete the works.

Early alignment excavations in Manhattan

In July 2019, the New York and New Jersey State governments created the bi-state Gateway Development Commission to pursue sources of grant funding at Federal, State and local level for all the Gateway tunnel elements, which also include a new rail bridge on the route.

Project preparations for Hudson Tunnel have also included setting up a pre-procurement virtual data room for private sector companies to source project details, including geotechnical data and information on utilities. The room was set up in response to feedback by the private sector in a request for information process. A consequence was discussions earlier this year to develop a supplementary site investigation programme, which was executed over recent months.

The Port Authority is providing US$2.7 billion for the new twin tube under river tunnel as part of a total local contribution by the States and local authorities of US$5.55 billion. Additional funding of US$1.28 billion is committed by Amtrak, the rail passenger service for the USA which runs interstate rail services through the existing Hudson River rail tunnels into Penn Station terminus in Manhattan. This is an increase of more than US$600 million from earlier contribution commitments by Amtrak, which, together with overall project cost reductions, allowed the project to request less Federal funding to US$4.36 billion. This is a 44% of total project cost in the FTA full funding request, down from the previous 49.4%.

The GDC project partners undertook the financial review after suffering a disappointing medium-low rating from FTA, due primarily to concerns about costs and certainty of local funding contributions. A team of the WSP, AECOM and STV consultancies is engaged as The Gateway Trans-Hudson Partnership in assisting GDC in pushing the project forward through planning and construction design.