Billions for Red Tape: Focusing on the Approval Process for the Gateway Rail Tunnel Project

Posted by Content Coordinator on Friday, May 13th, 2016


By Philip K. Howard


Two new rail tunnels need to be built under the Hudson River to alleviate a critical rail bottleneck and permit overhaul of century-old tunnels. The purpose of this report is to outline the economic and environmental costs of different permitting timetables, and to propose approval mechanisms that will save taxpayers billions and avoid significant environmental harm. This report supplements our earlier report released in September 2015, “Two Years, Not Ten Years: Redesigning Infrastructure Approvals,” available at

The Project

The Gateway Rail Tunnel Project is a $24 billion infrastructure plan to alleviate a critical bottleneck on the Northeast Corridor rail line (Washington, DC to Boston). It will create two new tunnels under the Hudson River between New Jersey and Penn Station in New York City, rebuild capacity on the New Jersey approaches to the Hudson, and add platform and station capacity within Penn Station. This connection is a critical transportation link in the Northeast Corridor, an area of the country that accounts for 20 percent of national GDP.2 Ridership on the Northeast Corridor rail line includes nearly 100,000 individual train trips each way between New Jersey and New York City every workday. The trains run at close to full capacity.

The existing rail connection between New Jersey and Penn Station consists of a pair of 105-year-old tunnels underneath the Hudson River, just south of the Lincoln Tunnel. These rail tunnels, which serve both Amtrak and NJ Transit trains, were already in need of repair when they were badly damaged in October 2012 by millions of gallons of seawater from Superstorm Sandy, causing further deterioration of system performance. In one otherwise ordinary week in July 2015, four out of five weekdays saw total service disruption, with no trains crossing the Hudson at all. Without intervention such delays are a “soul-chilling premonition of our future,” said New York Senator Chuck Schumer in August, adding that he feared we are approaching a “transportation Armageddon.”

At the heart of the Gateway Project, which was first proposed by Amtrak in 2011, is the creation of two new Hudson River tunnels. Further disruptions on the existing tunnels are inevitable, and each of them must be closed down, at some point in the next decade, for at least a year of repairs. Closing one without the creation of additional tracks will reduce system capacity by 75 percent. The economic and environmental effects of closure, without new tunnel capacity to replace the existing tunnels, will be harmful to the regional economy and cause paralytic traffic jams through much of the day. Last May, during a tour of the current tunnels, New Jersey Senator Cory Booker told reporters, “I want to focus people on the fact that we’re in crisis.”

New rail capacity under the Hudson has been studied since at least 1971. A proposal to build two new tunnels was incorporated in the ARC (Access to the Region’s Core) Project that was approved in 2009, after six years of environmental review, with an initial budget of $8.4 billion. In 2010, the project’s stated cost had risen to $11 billion and New Jersey Governor Chris Christie withdrew his state’s share of the funding. The project was terminated after $600 million had been spent.

Gateway’s proposed two tunnels are similar to those in the ARC Project but will take a slightly more northerly path under the Hudson, terminating at Penn Station. (The ARC tunnel would have terminated under Herald Square in Manhattan, without a direct connection to Penn Station.) Gateway will also involve adding platforms to Penn Station and rehabbing bridges and crossings in New Jersey to improve system capacity. With the addition of two new tunnels, and the rehabilitation of the two current ones, Amtrak estimates that Gateway will ultimately double rail capacity throughout the project area. Amtrak in 2015 estimated that Gateway would cost $20 billion—half for the new tunnels and half to expand capacity on both sides, including bridge upgrades and new platforms for Penn Station. In early 2016, Amtrak raised estimated costs to $23.9 billion.

Final costs will depend on when work can begin. Planning for the project is substantially complete, and, with permits in place, work could start by the end of 2017. However, Gateway requires environmental review and permits from almost two dozen federal, state, and local agencies. Today, there is no clear path to review and permitting for the project even though the similar ARC Project underwent a six-year environmental review and was fully permitted. Nor is there agreement as to the scope of review that is required. Amtrak estimates a process of three years. Other participants have suggested that it will take twice as long. A five-year review process would mean the new tunnels would not open until 2028 at the earliest, past the time at which one of the existing tunnels will likely be shut down for repairs.

In our 2015 report, ”Two Years, Not Ten Years,” Common Good found that a six-year delay in environmental review and permitting more than doubles the total cost of infrastructure, including continuing capacity inefficiencies. The report also found that lengthy environmental review often causes environmental harm by prolonging bottlenecks. The main flaw in the current processes for infrastructure approval, the report found, is the absence of clear lines of authority to make judgments needed to make sure the review process moves forward and does not get bogged down in immaterial issues and disagreements.

With a project the size of Gateway, time is not just money, but lots of money. As set forth below, when compared to an 18-month process to finish review and permitting, a three-year permitting timetable could increase taxpayer cost of the project by over $3 billion. A further two-year delay would increase costs by almost $10 billion.

The importance of Gateway is undeniable. There are no serious arguments against the project. Nor are there any serious alternatives, which have already been studied as part of the ARC review. Delay in starting work will only raise costs, drag down the regional economy, and cause environmental harm. Conversely, the environmental benefits of building Gateway as soon as possible are compelling. Better rail capacity takes cars and buses off the road. Avoiding the nightmare scenario of premature shutdown of an existing tunnel is itself an overriding reason to start construction as soon as practicable. What is needed to advance the public interest—to save taxpayers billions and avoid a potential “transportation Armageddon”—is an expedited and certain legal path to approval of Gateway.

Download full version (PDF): Billions for Red Tape

About Common Good
Common Good is a nonpartisan reform coalition that offers Americans a new way to look at law and government…Common Good’s philosophy is based on a simple but powerful idea: People, not rules, make things happen. This idea is fundamental to how we write laws and regulations, structure government agencies and resolve legal disputes. It affects all our lives, every day.

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