The Port Authority of New York and New Jersey's commitment to fund at least 25% of the $12.9 billion Hudson River tunnel project could cost the agency an additional $800 million, according to The Wall Street Journal.
The Port Authority has kicked in $2.7 billion for the project, with $2.4 billion representing the 25% share, but that figure was based on earlier tunnel estimates of almost $8 billion. The cost increase could raise the agency's contribution to $3.5 billion.
The dual-tunnel project, which is part of the $24 billion Gateway initiative to improve mobility along the Northeast Corridor, is a high priority because the existing tunnels and their equipment suffered severe saltwater-intrusion damage from Superstorm Sandy, in 2012.
The Gateway Program Development Corporation (GPDC) is tasked with managing the Amtrak-led Northeast Corridor rail project program. In June, the GPDC said it was considering a variety of financing options for the tunnel, including public-private partnerships (P3s). Additional Gateway projects include Portal Bridge replacements in New Jersey, as well as the conversion of the Farley Post Office Building, adjacent to New York City's Pennsylvania Station, into the Moynihan Train Hall.
After the Moynihan project announcement, the GPDC hired private finance expert Francis Sacr, formerly of French bank Societe Generale's Americas infrastructure financing division, to serve as interim chief financial officer. Sacr was also an adviser for the $4 billion LaGuardia Airport Central Terminal B replacement project, which is under construction and also a P3 with the Port Authority.
Soon after taking office, the Trump administration released a list of 50 high-priority infrastructure projects that were considered to have national security or public safety implications. The projects were valued at more than $137 billion, and the Gateway project was first on the list. The administration estimated that 50% of the $137 billion would be financed through private investment.
Yet earlier this week, the president told a group of lawmakers that P3s are "more trouble than they're worth" and that private investment would not feature prominently in his $1 trillion infrastructure plan. Private investment is one of the primary financing strategies contained in the administration's 2018 budget proposal.