March 19, 2018 / 7:43 PM / 2 years ago

Talks being held for funding of NY rail tunnel under U.S. bill: sources

WASHINGTON (Reuters) - Trump administration officials and members of Congress are in talks over including federal funding in a spending bill likely to be voted on this week for a new train tunnel under the Hudson River connecting New York City and New Jersey, three people briefed on the talks said.

At issue is the Gateway project, which would build a new rail tunnel under the Hudson River to replace the existing century-old tunnel that is relied on by both Amtrak for its busy Northeast Corridor Service and New Jersey Transit commuter trains.

Transportation Secretary Elaine Chao and other Republicans have said that President Donald Trump has threatened to veto a funding bill if it included funding for the $30 billion Gateway project.

But negotiators in Congress and Trump administration officials have been in talks since the weekend over the project’s status in an omnibus measure, the people briefed on the talks said.

Republicans in the House of Representatives are set to meet later on Monday to talk about the bill to fund the government through the end of September. A vote is expected on Wednesday, the people said, but the timing could slip. The government’s current funding authorization expires March 23.

In July, a House panel backed $900 million in new funding for the tunnel, which backers say is essential for transportation in the northeast United States. Proponents have described the language in the earlier measure as ensuring the funding for the project as well as a significant portion of Amtrak’s Northeast Corridor $328 million in funding would be used for Gateway.

One possibility is a significant portion of the $900 million may remain in the bill, but the language overseeing the funding in several programs may be changed, which would make Gateway eligible but not certain to receive funding, the people said.

Chao has repeatedly said that New York and New Jersey must provide direct funding for the project and not rely on federal loans for their share of the project costs.

“New York and New Jersey are two of the richest states in the country. ... They need to step up,” Chao said earlier this month.

In addition to funding a new tunnel, the project would replace the Portal North Bridge in New Jersey, which is a source of many trains delays, and rebuild the North River Tunnel that connects New Jersey and New York’s Penn Station.

The project focuses on a 10-mile segment of the Northeast Corridor, which carries over 200,000 Amtrak and New Jersey Transit passengers a day.

Trump’s opposition to the project angered Democrats and some Republicans. Senate Democratic leader Chuck Schumer of New York blocked many of Trump’s key transportation nominees for months over the issue before relenting last month.

Failure of the lines in the current tunnel, which was heavily damaged during 2012’s Superstorm Sandy, could come within a decade and would hobble commuting in the metropolitan area that produces 10 percent of the country’s economic output.

Reporting by David Shepardson; Editing by Leslie Adler

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