Judge Orders Release of Funds for Key New York–New Jersey Rail Tunnel Project

A U.S. federal judge has ordered the release of funds previously withheld by President Donald Trump’s administration for the $16 billion Gateway rail infrastructure project, a major initiative aimed at modernizing critical transit links between New York and New Jersey. U.S. District Judge Jeannette Vargas issued a temporary ruling allowing funding to resume, saying the states were likely to succeed in arguing that the administration’s freeze was arbitrary and did not follow proper legal procedures. The decision came just hours after officials warned construction could halt due to a lack of funds.

The Gateway Project includes building a new commuter rail tunnel under the Hudson River and rehabilitating an existing century-old tunnel that was severely damaged during Hurricane Sandy in 2012. The current tunnel, a vital artery on the nation’s busiest passenger rail line, serves over 200,000 travelers and more than 400 trains daily, but requires frequent emergency repairs that disrupt service. According to court filings, the funding suspension had already led to the withholding of over $200 million in reimbursements, threatening to idle around 1,000 construction workers and delay work on what officials describe as essential, safety-critical infrastructure.

Democratic leaders from both states praised the ruling, with New York Attorney General Letitia James and others condemning the freeze as politically motivated. The lawsuit alleged the administration’s action amounted to retaliation against Democratic-led states, a claim the judge said had legal merit at this stage. The Transportation Department had earlier stated the freeze was tied to a review of compliance with new federal rules on contracting practices. Meanwhile, broader political tensions have surrounded the project, with several Democratic lawmakers criticizing the administration’s handling of the funding as harmful to regional economies, jobs, and long-term transportation reliability.

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