The Biden administration is keen on rebuilding America’s infrastructure, including a multi-billion-dollar infrastructure project that the Trump administration blocked.
Secretary of Transportation Pete Buttigieg recently told the House Transportation and Infrastructure Committee that the administration would be prioritizing the Gateway Program, a project to upgrade the Northeast Corridor rail lines between New York and New Jersey.
“This is a regional issue, but one of national significance because if there were a failure in one of those tunnels, the entire U.S. economy would feel it,” Buttigieg said.
And according to Joe Kane, an associate fellow for the Brookings Institution, the Gateway Project "represents a crucial link for interstate travel and commerce, which are key federal responsibilities."
The Northeast Corridor is the most heavily trafficked passenger rail line in the country. According to the Gateway Program, the line “serves a region that's home to 17% of the U.S. population and 97 Fortune 500 company headquarters, and an area that contributes 20% of the national GDP.”
'The costs go up every day, almost a million dollars a day'
There are two key components to the Gateway Program: a new Portal North Bridge that is intended to replace the "current, functionally obsolete Portal Bridge" in New Jersey and a Hudson Tunnel that would support Amtrak and New Jersey Transit rail lines under the Hudson River between New Jersey and New York.
The Hudson Tunnel project would create a new two-track tunnel between New Jersey and Manhattan as well as repair the existing North River Tunnel, which sustained serious damage during Superstorm Sandy in 2012.
"This is the one area on the entire Northeast Corridor that necks down to one track in and one track out in the busiest section of the corridor between New Jersey and New York," Stephen Sigmund, chief of public outreach for the Gateway Program, told Yahoo Finance. "It links not only all of the commuter traffic between New Jersey and New York via rail, which obviously generates an enormous amount of economic productivity both to the region and the nation, but also links the Northeast Corridor between Boston and Washington."
The Portal North Bridge project would cost an estimated $1.5 billion, according to Amtrak. The Hudson Tunnel project would cost roughly $11.6 billion: approximately $9.5 billion to build an entirely new tunnel for the first time in 100 years and another $1.8 billion to rehabilitate the existing North River Tunnel.
The groundwork for the Gateway Program began in November 2015 when the Obama administration agreed to cover half the costs with the other half split between the New York and New Jersey state governments. But after Trump took office in 2017, the deal fell apart with the president even denying there was ever an agreement.
“We were working with the [Department of Transportation] under the Trump administration," Sigmund said. “And in March 2018 when the federal budget was being negotiated, then-President Trump said he would not sign a federal budget that includes monies for the Gateway Tunnel. From then forward, the previous administration really did not serve as a partner in helping us to build the project forward. And in fact, they made a number of efforts to block it.”
The stall took a major economic toll on the project, which meant that cost-cutting measures were implemented by working with the private sector.
"Since then,” Sigmund said, “the costs go up every day, almost a million dollars a day, given what happens with inflation in terms of our estimate, by the time we get to actually procuring and contracting the project itself. There was a delay that cost us money. It’s cost us, it’s cost passengers time and reliability, and the existing tunnel continues to deteriorate.”
'We are in an era of repair and replacement'
One thing is abundantly clear: The North River Tunnel needs work.
“It’s basically the middle section that links the whole corridor between New York and Washington,” Sigmund said. “So if it gets blocked up, it blocks up productivity and human economic productivity up and down the corridor.”
Sigmund cited the ongoing blockage of the critical Suez Canal waterway by a stuck container ship, noting that the same thing could happen with "a train stuck in the one kind of choke point." A stuck train, he added, would mean that "trains up and down the Northeast Corridor can’t move and that equals human quality of life, certainly first and foremost, and it also equals an enormous amount of lost economic productivity up and down the most productive economic section of the country.”
If conditions don’t improve, that would require that at least part of the tunnel to be shut down at some point. But a 2019 report from the Regional Plan Association found that a partial North River Tunnel shutdown “would cost the national economy $16 billion, reduce home values by $22 billion, and lead to decreased economic productivity, job losses, increased congestion, and crashes across the northeastern United States.”
According to Kane, part of the challenge to the completion of the Gateway Program is that it’s “not simply about a need for investment." Instead, the project "reflects long-standing shortfalls in our federal infrastructure policy frameworks. Federal infrastructure action cannot just be structured around one project or even a collection of projects. Action cannot always mean new construction, either. Increasingly, we are in an era of repair and replacement, and the prevailing 1950s federal infrastructure vision of ‘building more’ is not going to cut it.”
President Biden’s infrastructure plan — which costs roughly $2 trillion — aims at creating modern and sustainable infrastructure and places an emphasis on “revolutionizing municipal transit networks,” “sparking the second great railroad revolution,” and “transforming our crumbling transportation infrastructure.”
“Even if you don’t take the train every day, it’s something you should care about because one, it equals an enormous amount of economic productivity for the country and two, it’s a giant symbol of whether or not we as a nation will be able to build new 21st century infrastructure or not,” Sigmund said. “The fact that we’re still relying on 19th century technology to support a 21st century economy, it just can’t continue.”
Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at [email protected].
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