Gateway Project/New York Penn Station capacity improvement

[Andrew]

If NJ does not put out funds for Gateway then charge them charge much extra for running thru Gateway

Remember NJ is a member of the NEC Council which determines the charges.

I was asking if this means that the Gateway Project will not get built or when (WHICH YEARS) do you think major construction will begin? (Amtrak is looking at beginning construction of the Gateway Tunnel Resielency Project, which will construct new infrastructure from near Allied Interlocking in New Jersey to 30th street between 12th and 11th avenues in Manhattan, around 2020).

 

[afigg]

Looks like the political maneuvering to get serious about financing and getting going on the NEC Gateway is heating up. US DOT Secretary Foxx sent a letter on Monday to Cuomo and Christie asking for a meeting to discuss how to fund the project. The widely publicized delays last week for NJ Transit and Amtrak may have focred the issue. Along with the optics of Christie blaming Amtrak for the infrastructure problems.

NY Times: Transportation Secretary Seeks Meeting With Cuomo and Christie on Hudson River Rail Tunnels. Excerpts:

Transportation Secretary Anthony Foxx, hoping to spur action on long-stalled plans for new Hudson River rail tunnels, sent a letter on Monday to the governors of New York and New Jersey urging them to meet with him in the next two weeks to map out a strategy for building new crossings.

The letter from the nation’s top transportation official came after a series of crippling train delays frustrated tens of thousands of New Jersey Transit riders and provided the latest reminder that the century-old rail tunnels, used by New Jersey Transit and Amtrak to traverse the Hudson, need to be replaced.

Mr. Foxx asked Gov. Chris Christie of New Jersey and Gov. Andrew M. Cuomo of New York to meet to discuss their states’ roles in a proposal, known as the Gateway Project, to build new rail tunnels.

......

In his letter on Monday, Mr. Foxx said that the Obama administration was willing to explore federal financial assistance for the project. The Federal Railroad Administration and Amtrak have discussed financing tools to get the project started, he said, but they needed support from the states.

“Neither Amtrak nor your individual states, acting alone, can replace these tunnels,” he wrote. “It will take all of us working together.”

A meeting in the next 2 weeks means a meeting in August. When many of the power that be are on vacation. Foxx is getting serious here.

 

[Andrew]

Looks like the political maneuvering to get serious about financing and getting going on the NEC Gateway is heating up. US DOT Secretary Foxx sent a letter on Monday to Cuomo and Christie asking for a meeting to discuss how to fund the project. The widely publicized delays last week for NJ Transit and Amtrak may have focred the issue. Along with the optics of Christie blaming Amtrak for the infrastructure problems.

NY Times: Transportation Secretary Seeks Meeting With Cuomo and Christie on Hudson River Rail Tunnels. Excerpts:

Transportation Secretary Anthony Foxx, hoping to spur action on long-stalled plans for new Hudson River rail tunnels, sent a letter on Monday to the governors of New York and New Jersey urging them to meet with him in the next two weeks to map out a strategy for building new crossings.

The letter from the nation’s top transportation official came after a series of crippling train delays frustrated tens of thousands of New Jersey Transit riders and provided the latest reminder that the century-old rail tunnels, used by New Jersey Transit and Amtrak to traverse the Hudson, need to be replaced.

Mr. Foxx asked Gov. Chris Christie of New Jersey and Gov. Andrew M. Cuomo of New York to meet to discuss their states’ roles in a proposal, known as the Gateway Project, to build new rail tunnels.

......

In his letter on Monday, Mr. Foxx said that the Obama administration was willing to explore federal financial assistance for the project. The Federal Railroad Administration and Amtrak have discussed financing tools to get the project started, he said, but they needed support from the states.

“Neither Amtrak nor your individual states, acting alone, can replace these tunnels,” he wrote. “It will take all of us working together.”

A meeting in the next 2 weeks means a meeting in August. When many of the power that be are on vacation. Foxx is getting serious here.

What's your point about the August comment?

Another article about a potential Gateway meeting:

http://www.bloomberg.com/politics/articles/2015-07-28/amtrak-tunnel-needs-action-now-foxx-tells-christie-and-cuomo

 

[Ryan]

His point is that Congress goes on recess for all of August, and the town empties out. Having a meeting then can be compared to having a meeting on the Friday after Thanksgiving or between Christmas and New Years. Either nobody will attend, or you're serious and screwing with people's leave plans.

 

[west point]

We have no idea why the meeting in August. Hope this does not mean that things are worse than we have been told ?

 

[afigg]

We have no idea why the meeting in August. Hope this does not mean that things are worse than we have been told ?

I figure Secretary Foxx is pushing to have the meeting with the Governors in the next 2 weeks to get the ball rolling on the serious negotiation process on who pays how much. It will be a lengthy process with a lot of posturing from the major players and will involve many stakeholders. Already, the Port Authority has responded with a somewhat snarky letter, even though the PANYNJ board will ultimately do what Christie and Cuomo tell them to do.

Good news article on the funding challenges: Analysis: Committing cash is key to Hudson tunnel talk. Excerpts:

Governor Christie said Tuesday that he and New York Gov. Andrew Cuomo would accept an invitation to talk with the Obama administration’s top transportation official about Amtrak’s failing 105-year-old tunnel under the Hudson River.

Whether the meeting produces action, however, may depend on if Christie and Cuomo are ready to commit dollars from their states for a new tunnel project proposed by Amtrak.

....

Foxx’s invitation came after Sen. Cory Booker of Newark suggested to Foxx on Sunday that he and Christie meet. Booker is the top-ranking Democrat on the surface transportation subcommittee and co-sponsor of a bill that would overhaul Amtrak policy and increase funding.

....

The problem, however, is that New Jersey’s transportation fund is virtually broke, and if Christie were to agree with Foxx and Cuomo on an equitable split of the Gateway costs, there is no indication of where New Jersey’s share of the money would come from.

On Tuesday, the chairman of the Port Authority, John Degnan, sent a letter to Foxx calling new tunnels a priority and expressing disappointment that the secretary did not attend a transportation summit held by the agency in May.

Degnan asked Foxx to provide a better understanding of how much funding is available, saying that so far the federal government has capped its contribution to $3 billion of the estimated $14 billion cost of Gateway. Degnan also called on the federal government to “express a willingness to expedite the environmental review process.”

If pushed, NY State will be able to contribute funds for Gateway. Heck, if he really wanted to, Cuomo could probably get the legislature to re-direct $1 or $1.5 billion from the circa $6 billion "windfall" the state is getting from fines paid by the banks. NJ is a problem because Christie has refused to address the state's transportation funding crisis.

The other catch will be getting the House Republicans to fund a NYC project. OTOH, there may be a route for federal funding by allocating remaining Sandy relief and mitigation funds for the core tunnel and new tracks & bridges in NJ parts of the project.

 

[Andrew]

We have no idea why the meeting in August. Hope this does not mean that things are worse than we have been told ?

I figure Secretary Foxx is pushing to have the meeting with the Governors in the next 2 weeks to get the ball rolling on the serious negotiation process on who pays how much. It will be a lengthy process with a lot of posturing from the major players and will involve many stakeholders. Already, the Port Authority has responded with a somewhat snarky letter, even though the PANYNJ board will ultimately do what Christie and Cuomo tell them to do.

Good news article on the funding challenges: Analysis: Committing cash is key to Hudson tunnel talk. Excerpts:

Governor Christie said Tuesday that he and New York Gov. Andrew Cuomo would accept an invitation to talk with the Obama administration’s top transportation official about Amtrak’s failing 105-year-old tunnel under the Hudson River.

Whether the meeting produces action, however, may depend on if Christie and Cuomo are ready to commit dollars from their states for a new tunnel project proposed by Amtrak.

....

Foxx’s invitation came after Sen. Cory Booker of Newark suggested to Foxx on Sunday that he and Christie meet. Booker is the top-ranking Democrat on the surface transportation subcommittee and co-sponsor of a bill that would overhaul Amtrak policy and increase funding.

....

The problem, however, is that New Jersey’s transportation fund is virtually broke, and if Christie were to agree with Foxx and Cuomo on an equitable split of the Gateway costs, there is no indication of where New Jersey’s share of the money would come from.

On Tuesday, the chairman of the Port Authority, John Degnan, sent a letter to Foxx calling new tunnels a priority and expressing disappointment that the secretary did not attend a transportation summit held by the agency in May.

Degnan asked Foxx to provide a better understanding of how much funding is available, saying that so far the federal government has capped its contribution to $3 billion of the estimated $14 billion cost of Gateway. Degnan also called on the federal government to “express a willingness to expedite the environmental review process.”

If pushed, NY State will be able to contribute funds for Gateway. Heck, if he really wanted to, Cuomo could probably get the legislature to re-direct $1 or $1.5 billion from the circa $6 billion "windfall" the state is getting from fines paid by the banks. NJ is a problem because Christie has refused to address the state's transportation funding crisis.

The other catch will be getting the House Republicans to fund a NYC project. OTOH, there may be a route for federal funding by allocating remaining Sandy relief and mitigation funds for the core tunnel and new tracks & bridges in NJ parts of the project.

Good points!

But, Amtrak's reauthorization proposal calls for redirecting their Northeast Corridor operating profits back into the Northeast Corridor--which could help finance the Gateway Project through a massive RRIF loan, or RIFIA loan, which apparently has been recently discussed...

 

[jis]

How is that loan ever going to be paid back? Or are we just going to fall back on the Greek approach to financing?

 

[Andrew]

How is that loan ever going to be paid back? Or are we just going to fall back on the Greek approach to financing?

The NEC profits--which are expected to amount to around $400 million per year--could pay for debt service on these loans, and plus, interest rates are extremely low and have been extremely low for the last few years...

 

[jis]

How is that loan ever going to be paid back? Or are we just going to fall back on the Greek approach to financing?

The NEC profits--which are expected to amount to around $400 million per year--could pay for debt service on these loans, and plus, interest rates are extremely low and have been extremely low for the last few years...

And then what will be used as collateral for the loans needed for buying rolling stock? You cannot use the same profits to cover things several times over. How will we then pay for the other capital work if we eat up the entire profits in paying for just the Hudson tunnels. This idea of using on RRIF loans I don;t believe is a practical one. There has to be capital infusion in the form of outright grants, or this thing is not going to happen. The other possibility is using collateral like incidental real estate development etc., like AAF is using. But I have not seen that proposed anywhere yet.

 

[Andrew]

How is that loan ever going to be paid back? Or are we just going to fall back on the Greek approach to financing?

The NEC profits--which are expected to amount to around $400 million per year--could pay for debt service on these loans, and plus, interest rates are extremely low and have been extremely low for the last few years...

And then what will be used as collateral for the loans needed for buying rolling stock? You cannot use the same profits to cover things several times over. How will we then pay for the other capital work if we eat up the entire profits in paying for just the Hudson tunnels. This idea of using on RRIF loans I don;t believe is a practical one. There has to be capital infusion in the form of outright grants, or this thing is not going to happen. The other possibility is using collateral like incidental real estate development etc., like AAF is using. But I have not seen that proposed anywhere yet.

Loans for new Amfleet coaches can be financed by the savings on future maintenance costs. However, I believe that new Dual Mode Locomotives should be funded from capital expenditures. (I think it is unlikely that Amtrak would purchase more than 20 new DM's). How much does a DM locomotive sell for today?

Amtrak might sell the air rights over Sunnyside Yard in Queens to partially fund Gateway.

Port Authority Chairman Degnan's letter to Foxx about Gateway: http://www.scribd.com/doc/272884160/Port-Authority-Chairman-s-Response-to-Foxx-Invitation

Also, for Transportation Secretary Foxx's meeting with Cuomo and Christie, does anyone know if they are looking at funding the entire Gateway Project, or just the Gateway Tunnel Resielency Project?

 

[afigg]

The NEC profits--which are expected to amount to around $400 million per year--could pay for debt service on these loans, and plus, interest rates are extremely low and have been extremely low for the last few years...

You keep harping on the possibilities of Amtrak obtaining RIFF or other low interest federal loans to pay for NEC infrastructure projects. The problem is that, unlike a state or city government when it issues 20 or 30 year bonds to pay for road or transit projects, Amtrak does not have the power to levy gas, sales, or real estate taxes that governments often rely on to pay off the bonds. OK, maybe Amtrak could levy a surcharge of some sort on passengers or on the commuter railroads, but it would make Amtrak less competitive and make for a even more complicated financial relationship with the all commuter agencies.
I expect that the Portal bridge and other NEC projects will end up being paid for in part by federal loans, RIFF, TIFIA, or whatever. But it will be DEBT that will have to be paid off with INTEREST over the next 20 or 30 years. Which could become a crushing debt load, if Amtrak or an NEC authority/Commission is not careful - or a couple of powerful Governors push for the NEC to take on more debt, so they don't to pay more out of their transit budgets because they have higher political ambitions. Take on too much debt, and someday, the choice might have to be between paying for basic track maintenance or servicing the debt on track infrastructure. Then Amtrak would have to go to Congress and the states, hat in hand and ask for help. Debt on rolling stock is a different matter because one can figure out how much revenue the Acela or coach cars are generating. Not so simple for new tunnels under the Hudson river or bridge in NJ used by both Amtrak and NJT. RIFF loans are no panacea, although as I said, I expect low interest federal loans for infrastructure are in the NEC's future.

 

[Andrew]

The NEC profits--which are expected to amount to around $400 million per year--could pay for debt service on these loans, and plus, interest rates are extremely low and have been extremely low for the last few years...

You keep harping on the possibilities of Amtrak obtaining RIFF or other low interest federal loans to pay for NEC infrastructure projects. The problem is that, unlike a state or city government when it issues 20 or 30 year bonds to pay for road or transit projects, Amtrak does not have the power to levy gas, sales, or real estate taxes that governments often rely on to pay off the bonds. OK, maybe Amtrak could levy a surcharge of some sort on passengers or on the commuter railroads, but it would make Amtrak less competitive and make for a even more complicated financial relationship with the all commuter agencies.
I expect that the Portal bridge and other NEC projects will end up being paid for in part by federal loans, RIFF, TIFIA, or whatever. But it will be DEBT that will have to be paid off with INTEREST over the next 20 or 30 years. Which could become a crushing debt load, if Amtrak or an NEC authority/Commission is not careful - or a couple of powerful Governors push for the NEC to take on more debt, so they don't to pay more out of their transit budgets because they have higher political ambitions. Take on too much debt, and someday, the choice might have to be between paying for basic track maintenance or servicing the debt on track infrastructure. Then Amtrak would have to go to Congress and the states, hat in hand and ask for help. Debt on rolling stock is a different matter because one can figure out how much revenue the Acela or coach cars are generating. Not so simple for new tunnels under the Hudson river or bridge in NJ used by both Amtrak and NJT. RIFF loans are no panacea, although as I said, I expect low interest federal loans for infrastructure are in the NEC's future.

So how do you see Amtrak contributing to the Gateway Project?

Could a surcharge on passengers occur?

 

[afigg]

The good news is that it appears Gov. Christie will take a break from New Hampshire, where he has been busy serving the people of NJ , and meet with Gov. Cuomo and Secretary Foxx. Nj.com: Christie says he and Cuomo committed to new Hudson rail tunnel. However, I did not realize that Christie was a civil engineer concerned about the design of the tunnels. Excerpt:

However, Christie said any proposal on a new crossing between the states would would need to meet specific guidelines before he would sign off on it.

"Let's be clear," Christie said, "I had a good conversation, I think as I told you guys yesterday, with Governor Cuomo and both of us are committed and had the chairman of the Port Authority send a letter to Secretary Foxx today agreeing to meet, but also saying that there are two priorities for us in building this tunnel: Not only does there have to be appropriate and fair funding from all the parties involved, — federal and both states — but there also has to be a properly engineered tunnel."

The dealmaking and sheer bluster over the next few months could be interesting to watch.

 

[jis]

The more relevant question is where is Christie going to find the money to pay New Jersey's fair share, without raiding the PANYNJ piggy bank. He blithely kept counting the entire PANYNJ contribution is the last round as NJ contribution without taking into consideration that rightfully half that money belongs to NY. So let the spouting of half truths begin all over again with a vengeance!

 

[afigg]

So how do you see Amtrak contributing to the Gateway Project?

Could a surcharge on passengers occur?

Andrew, if you are going to respond with a short question, please trim the quotes from previous posts to just the gist of what you are responding to, so people don't have to plow through long quotes.
As for how Amtrak might drum up funding for its part, wait and see what comes out of the negotiations. Why ask questions that no one here can answer?

 

[jis]

The fact of the matter is that Amtrak will contribute whatever Congress appropriates under the FRA Amtrak account for it, or whatever it instructs Amtrak to do relative to any loans. Not much else. Amtrak is a creature of the Congress and not much else, notwithstanding wild dreams of many.

 

[Andrew]

Cuomo has said he will make the project a priority if the federal government provides more to Gateway than the $3 billion they have said they would contribute.

My fear, though, is that if the Fed's do not provide more than the proposed $3 billion, then Gateway will not happen.

I still do not know if the politicians are talking about funding the entire Gateway Project or just the Gateway Tunnel Resielency Project.

 

[jis]

When did the federal government say they will contribute anything specific like $3 billion. Could you provide a citation for that please?

Most of your endless questions are addressed in the following:

http://nec.amtrak.com/sites/default/files/Gateway_Amtrak%20Factsheet%20Spring%202015.pdf

http://static1.squarespace.com/static/55196841e4b076742447c850/t/5553e513e4b00483b17a4493/1431561491984/AVitalLink_Amtrak.pdf

Beyond that I doubt anyone knows anything. The second item above is from Drew Galloway and relatively recent (May 2015 vintage).

Feds at present have exactly $0 allocated to this project. Amtrak, the states and PA can find whatever they can. The Surface Transportation Authorization talks vaguely about some $150 million to $450 million per year for capital work on the NEC overall. Of course nothing has passed in a form that could become law yet.

Incidentally, the projected completion date mentioned in the first document above is 2030. This would indicate that there is little expectation that any serious construction will begin before 2018-2020 timeframe.

 

[afigg]

Cuomo has said he will make the project a priority if the federal government provides more to Gateway than the $3 billion they have said they would contribute.

My fear, though, is that if the Fed's do not provide more than the proposed $3 billion, then Gateway will not happen.

I still do not know if the politicians are talking about funding the entire Gateway Project or just the Gateway Tunnel Resielency Project.

Unless Secretary Foxx has $3 billion siting around, he can't commit that much. Maybe he could make parts of Gateway eligible for FTA programs. Foxx can propose a federal share, but it will be up to Congress to provide the federal funds. What did I say above about dealmaking and bluster over the next few months. This is Cuomo and Christie posturing and playing to the public.

The key is that the many players involved have started talking and negotiating how fund the Gateway project. Or a large part of it: the two tunnels and tracks in NJ and two Portal bridges. Not hard to see Gateway broken into phases with the parts needed only for NJT, namely Penn Station South and the Secaucus Loop kicked into a future phase because Christie does not want to agree to pay for those on his watch. Andrew, you need to realize that coming up with a funding package Gateway will be a long and tedious process. With a lot of bluster and noise coming from one participant. Asking us questions about it won't change anything.

 

[Andrew]

Cuomo has said he will make the project a priority if the federal government provides more to Gateway than the $3 billion they have said they would contribute.

My fear, though, is that if the Fed's do not provide more than the proposed $3 billion, then Gateway will not happen.

I still do not know if the politicians are talking about funding the entire Gateway Project or just the Gateway Tunnel Resielency Project.

Unless Secretary Foxx has $3 billion siting around, he can't commit that much. Maybe he could make parts of Gateway eligible for FTA programs. Foxx can propose a federal share, but it will be up to Congress to provide the federal funds. What did I say above about dealmaking and bluster over the next few months. This is Cuomo and Christie posturing and playing to the public.

The key is that the many players involved have started talking and negotiating how fund the Gateway project. Or a large part of it: the two tunnels and tracks in NJ and two Portal bridges. Not hard to see Gateway broken into phases with the parts needed only for NJT, namely Penn Station South and the Secaucus Loop kicked into a future phase because Christie does not want to agree to pay for those on his watch. Andrew, you need to realize that coming up with a funding package Gateway will be a long and tedious process. With a lot of bluster and noise coming from one participant. Asking us questions about it won't change anything.

So we still do not know how much of the Gateway Project is being discussed. Maybe Cuomo is referring to the $3 billion commitment for ARC?

http://newyork.cbslocal.com/2015/07/29/andrew-cuomo-hudson-river-tunnels/

Another link about Gateway: http://www.northjersey.com/news/analysis-committing-cash-is-key-to-hudson-tunnel-talk-1.1382096

 

[Andrew]

A new PDF on the Gateway Project:

http://nec.amtrak.com/sites/default/files/Map_Gateway_Overview_DRAFT_7%20w%20Hudson%20Tunnel%20Proj%20study%20area.pdf

My concern is that both Governors Christie and Cuomo will tell the media that they agreed to a meeting--and then both have the meeting at all!

Now Cuomo is talking about the Gateway Project:

http://www.bloomberg.com/politics/articles/2015-08-07/cuomo-says-u-s-loan-offer-for-amtrak-tunnel-isn-t-acceptable

 

[afigg]

Gov. Cuomo is not exactly showing much leadership here. NYT: Cuomo Says Hudson Tunnels Need Grants, Not Loans to States, From U.S.

Two weeks after the federal government’s top transportation official urged the governors of New York and New Jersey to meet with him about how to solve the problems plaguing rail service between their states, Gov. Andrew M. Cuomo of New York said on Sunday that such a meeting would be pointless unless federal officials offered grants, not loans, to finance new tunnels under the Hudson River.

Speaking to reporters before the Dominican Day Parade in Manhattan on Sunday, Mr. Cuomo said he was willing to meet with the secretary of transportation, Anthony Foxx, who had asked for a meeting by Monday, “but there’s no reason to meet now, because it’s very simple.” The states could not afford to pay back a loan, Mr. Cuomo said; only cash would do to help cover the estimated $14 billion cost.

“I don’t need your advice; I know we need the tunnel,” Mr. Cuomo said. “We’ll build the tunnel — I’ll go out there with a shovel myself — but we need the money.”

Yes, Congress needs to appropriate funds to cover part of the costs for the Gateway project. But how is refusing to meet with Secretary Foxx going to solve that problem? Cuomo and Christie should be meeting both with Foxx and members of the state's Congressional delegations to make the case for funding.

 

[jis]

The sooner people start realizing that the Hudson Tunnels generally are not very high and never has been very high on the totem pole of New York Governor's priority list, the better off they will be from their own mental health angle. I would be absolutely amazed if a New York Governor actually takes a lead on this while the New jersey Governor is busy spending all his time in Iowa and New Hampshire. just isn't gonna happen. I expect a lot of equivocation at best involving perhaps a telephone call or two. If anything NY is in worse financial shape than NJ when it comes to transportation money, what with two major projects running way over budget and behind schedule, with very little chance of getting any substantial rescue package from the feds.

 

[NE933]

I think the Governor is pretty much on target: $14B is impossible for two states, and it's also unreasonable in that the route serves passengers on an intercity corridor that go much farther than just NY or NJ. Grant money, cash, is the only answer for the bulk of Gateway. Gateway, along with the nations' myriad of other decaying infrastructure, is crying out for a funding mechanism other than 'no, there's no money for that'.

Do it now, or else we risk drying up and decaying ourselves. After all, if the Hudson tunnels fail, no one knows how to move allll that traffic elsewhere. There are no other tunnels, no bridges, ferries can't handle it, the roadways can't either. Unfortunately Amtrak's recent handling of big capital projects are starting to appear mediocre, and even poor in some cases, which hurts the credibility needed to stand up, call, and get the money and cooperative work needed.