Private money is expected to fund part of a $20 billion rail tunnel project linking New Jersey with Manhattan, according to a senior executive at the national rail network Amtrak.
Amtrak's plan to build a new two-track tunnel under the Hudson River and revamp its rail infrastructure in the region got a boost earlier this month when the federal government agreed to foot half of the bill.
New Jersey and New York are on the hook for the rest, but financial hurdles both states face suggest they could try to tap the plan's private funding option to meet their commitment or get their bi-state transportation authority to do that.
Private financing would be especially suited to the expansion and revamp of New York's Penn Station, but could also help fund tunnel construction itself, said Drew Galloway, Amtrak's deputy chief of Northeast Corridor Planning and Performance.
"It certainly seems to lend itself to some aspect of public-private partnership involvement, particularly in station development," Galloway said about the plan, known as Gateway Program.
The project would be one of the largest in the United States using a combination of private and public money, highlighting fiscal constraints and the growing calls for the use of private capital in the renewal of the nation’s creaking infrastructure.
New York has several expensive projects, including funding of its subway and commuter rails, that already compete for funding while New Jersey grapples with high debt, a pension system shortfall and a sluggish economy.
The project will help the region handle an expected 16 percent population increase over the next 25 years, according to Andrew Lynn, director of planning and regional development at the Port Authority.
The agency says its infrastructure serves an area within a 250-mile radius, which accounts for a quarter of the U.S. gross domestic product.
The construction and repairs could take up to 20 years and the first stage – an environmental review and preliminary engineering – could begin as soon as early 2016 and take up to four years.