Low Cost Loan Should Bring Governors to Table on Gateway Tunnel

17 Aug 2015 

Sweeney, WEINBERG & GORDON: 80-20 Federal Split, Low-cost Loan should bring governors to table on gateway tunnel

Senate Democrats renew call for Port Authority to provide New York/New Jersey match for project, citing availability of 35-year low-interest loan      

TRENTON – Senate President Stephen Sweeney (D-Gloucester), Senate Majority Leader Loretta Weinberg (D-Bergen) and Senator Bob Gordon (D-Bergen), today urged Governors Christie and Cuomo to come to a quick agreement on funding for the Gateway rail tunnel, citing Amtrak’s willingness to push for an 80-20 federal funding split and the availability of a 35-year, low-cost loan to underwrite the project.

“We have a unique opportunity to create the partnership we need to build the Gateway tunnel, fix the 105-year-old tunnels that were damaged by Superstorm Sandy, and meet the need to double NJ Transit rail commuter capacity to New York City,” Sweeney said. “Amtrak’s push for 80-20 federal funding and the apparent availability of a low-cost, long-term loan should be a game-changer in the Gateway negotiations.”

Stephen Gardner, Amtrak Vice President for Northeast Corridor Infrastructure Development, told the Senate Legislative Oversight Committee yesterday that Amtrak believes the Gateway project is of such critical importance that it should be funded 80 percent by the federal government, as other major regional transportation and airport projects are funded.

Gardner also noted that more than $30 billion remain in the federal Railroad Rehabilitation Infrastructure Financing program for low-interest loans for major railroad infrastructure projects, and that the Gateway program would be a suitable use for that money. New York City’s Metropolitan Transportation Authority got a $967.1 million loan from the program in May at a 2.38 percent interest rate.

“As the bistate agency whose principal mission is trans-Hudson transportation infrastructure, the Port Authority is the logical entity to provide the local match for Gateway,” said Sweeney. “The loan program could make that commitment easier.”

Sweeney has pushed for the agency to include $3 billion to jump-start Gateway as part of its new 10-year capital plan. A 35-year RRIF loan – which is justified for a tunnel expected to last 100 years – would cost between $120 million and $130 million a year at the current 2.7 percent long-term Treasury rate. The administrator of the Federal Railroad Administration has the power to authorize loans from the RRIF program, which was previously authorized by Congress at a $35 billion funding level.

Senator Weinberg said she and her colleagues are prepared to reach out to and work with the state’s congressional delegation and the Port Authority to “move the idea forward.”

“We are more than prepared to be pro-active to move this idea forward with a financing plan that gets the project done,” said Senator Weinberg. “Spreading out the Port Authority’s cost up to 35 years would be beneficial because the agency has other critical infrastructure needs, starting with the reconstruction and repair of the Port Authority Bus Terminal to meet increased bus ridership demand over the next 30 years.”

Sweeney, Weinberg and Gordon praised U.S. Sen. Cory Booker (D-N.J.), the ranking Democrat on the Senate Subcommittee on Surface Transportation and a strong proponent of the Gateway project, for working behind the scenes to set up an August 18 meeting between Governor Christie and U.S. Transportation Secretary Anthony Foxx.

“President Obama announced that Gateway is the top rail priority in the nation,” noted Senator Gordon, who chaired the Legislative Oversight hearing. “If Transportation Secretary Foxx puts an 80-20 split on the table when he meets with Governor Christie next week, there is no reason not to reach a quick agreement.”

Senator Weinberg said an 80-20 split should more than satisfy the concerns of Governors Christie and Cuomo about the federal government shouldering its fair share of the cost.

“The 80-20 share is more than the federal government was putting into the ARC rail tunnel project that Governor Christie cancelled,” Weinberg said. “With the Sandy damage to the existing tunnels causing unbearable commuter delays, having the ARC tunnels closing in on completion would have been tremendous. But Gateway is a better project because it can serve both NJ Transit and Amtrak trains and it will provide service directly to Penn Station. We need to get it built.”

Senator Gordon noted that if one of the existing Hudson River rail tunnels needs to close for repairs for a year or more before Gateway is built, the 24 NJ Transit and Amtrak trains that go through the tunnel every hour during the morning and evening commutes will have to be cut to just six an hour.

“This would be both an economic catastrophe for the region and a nightmare for New Jersey commuters,” Gordon said. “The bus system, PATH, our roads and our ferry system would not be able to handle the 60,000 to 75,000 rail commuters who would be forced to find other transportation to New York. Everyone who rides the bus, ferries or PATH or drives to work would have their lives affected too.”