How to build $16 billion of rail tunnels under the Hudson River

As head of the Gateway Development Commission, Kris Kolluri is leading the day-to-day activities of the most significant infrastructure project in the country. The former New Jersey transportation commissioner has experience managing outsized personalities and competing interests having worked as a key aide in Congress and in several economic development offices. The $16 billion rail tunnel project is set to receive its final tranche of funding in the coming weeks, which could make its completion inevitable no matter who is running the country, and is expected to be completed by 2038. This interview has been edited for length and clarity.

What are the latest developments on the Gateway rail tunnel project?

The official title for this project is the Hudson tunnel project. It’s the single most consequential infrastructure project in the country. It’s important because the current set of tunnels represent a single point of failure on the Northeast corridor. We’re in charge of developing a brand new set of tunnels that act as a resilience project for the existing tunnels. Our mandate is to build two new tunnels from New Jersey to Penn Station and rehabilitate the current tunnels.

I started two years ago. We’ve gone from an agency that was in startup mode to one that is not only becoming eligible to receive federal funds but standing at the precipice of receiving the single largest investment in mass transit in the history of the country. When that happens, in the next month, we’ll receive 73% of the $16 billion we’re expected to receive.

What impact will this project have, not just regionally but nationally?

The Regional Plan Association just released a report that has now upped the number of jobs that this project will create to 95,000 jobs. The economic impact of the project is $20 billion. What this means for the region is that the region as a whole will continue to be a meaningful contributor to the national GDP and maintain our primacy as economic engines for the country. This project is that consequential.

Construction started last fall on the Hudson River tunnel portion of the Gateway Program. What’s the estimated completion date and price tag at this point?

It’s $16.04 billion to be specific. The completion date for the new tunnels is 2035 and the rehabilitation of the existing tunnels will be from 2035 to 2038. By 2038, the entire project will be complete.

New York and New Jersey are splitting the state-level costs, with major contributions from the federal government, Amtrak and The Port Authority. How complicated is it to coordinate among so many different governmental bodies?

This is a very complex project but what has been remarkable has been the level of support we have received from the president and (Senate) Majority Leader (Chuck) Schumer, Gov. (Kathy) Hochul and Gov. (Phil) Murphy. It has been nothing short of historic. Just to give a contrast between 2011, when the (Access to the Region’s Core) project was tabled until today, New Jersey and partners did not have a local funding agreement locked up. Today we’re in a position to say local funding has been locked up and we have agreements already from the federal government.

There’s one more part of this to understand. When you look at the overall contribution the states make to this project, New Jersey went from $3 billion to less than $300 million. New York went from $3.5 billion-$4 billion to $1.1 billion. That’s happened because we’ve been able to get an extraordinary amount of contribution from the federal government. The Port Authority is contributing $2.69 billion. No other mass transit project in history has seen this kind of infusion of federal funds.

The reason why New Jersey and New York have different amounts is because New Jersey is contributing all the money for the Portal North Bridge, which is currently under construction. So what you're seeing is a debit-credit realignment to equal out their contribution.

With such a long timeline, how do you deal with the risk of delays and cost overruns? Can procurement processes be improved to reduce the risk?

There are a couple ways to do this, to make sure we fully understand interface risk, that is risk on how packages are implemented. We’ve not only learned lessons from Second Avenue and East Side Access, but we also benefit from people in the region who we’ve hired who are unbelievably proficient. We’re looking at our risk profile to mitigate that, No. 1. No. 2, we are making sure we talk to the industry a lot. We’ve had close to 13 industry outreach sessions. We need to understand the marketplace and the risk tolerance in the existing market. Often agencies in past practices have put out a procurement they think is appropriate. The current best practice is to talk to the marketplace, the industry and stakeholders to make sure we fully understand and respond to the industry outlook and how they view the packages. If one package is too big, we try to break it into pieces. If terms need to be amended, we do that in the terms of the current contract. 

We’re much more proactive. We don’t need to make it adversarial. Yes we sit on the opposite side of the contract, but it doesn’t need to be contentious from the get-go. That rarely results in a well-delivered project.

We talk to the industry a lot, multiple times, during the procurement and before the procurement is out to capture the sentiment in the marketplace.

The third thing we’re doing is we’re starting construction on both sides of the river, and in June or July we’re starting construction in the water. By putting out contracts, on time or sooner, you mitigate supply chain issues, make sure there are no delays, and hedge against political volatility. Our goal is to get to a point of inevitability, of no return.

Federal dollars have been promised to fund 70% of the project, but could that change under a different president?

That’s why it’s important we have a full funding grant agreement from the federal government. That’s the final document that binds all the parties together to deliver this project. That binds the state parties, New York, New Jersey, Amtrak and the federal government. We will get it next month.

How will the new rail tunnel be more resilient in the event of another Superstorm Sandy? 

Climate change is a reality in the Northeast. Hurricanes and storms used to be a 100-year event. Now they’re happening once every five years. We try to in design and implementation ensure that from a design standpoint they are resilient, not just as a redundant system, but withstand the force of elements they will be confronted with. Whether it’s putting floodgates in the project or making sure the approach to the tunnel is much more protected and resilient, those are the kinds of things we learned in the current North River Tunnels in Sandy. We’re using the lessons learned to protect those new tunnels from impact of storms or flooding.

You can’t foolproof a project from every possibility, but what you can do is look at what happens in storm events and try to mitigate for it, and that’s what’s happened.

We’re in the Goldilocks zone, we’ll never see a moment like this ever again. It’s up to us to capitalize on it and build a project that will last the next 100 years.

Correction: This post has been updated with the correct dates for the new and existing tunnels.