March 6, 2018 / 10:52 PM / 17 days ago

UPDATE 1-U.S. says New York, New Jersey must pay more for 'Gateway' project

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By David Shepardson

WASHINGTON, March 6 (Reuters) - New York and New Jersey must shoulder more of the costs to build a transportation tunnel under the Hudson River, U.S. Transportation Secretary Elaine Chao said on Tuesday while confirming that the Trump administration was opposed to Congress financing the project.

“New York and New Jersey have got to up their local share,” Chao said at a contentious hearing in the U.S. House of Representatives. “New York and New Jersey are two of the richest states in the country ... They need to step up.”

In July, a House panel backed $900 million in new funding for the tunnel, which is essential for transportation in the northeast United States.

Political wrangling over the project stretches back more than a year.

A congressional aide said on Tuesday that President Donald Trump urged House Speaker Paul Ryan last week not to include funding for the $30 billion so-called “Gateway Project” in a pending government spending bill.

Representative Sean Patrick Maloney, a New York Democrat, asked Chao if “the president of the United States was personally intervening with the speaker to kill this project?”

Chao responded, “Yes, the president is concerned about the viability of this project and the fact that New York and New Jersey have no skin in the game.”

The project would replace the Portal North Bridge in New Jersey, which is a source of many trains delays, build a new $13 billion rail tunnel under the Hudson River, and rebuild the North River Tunnel that connects New Jersey and Penn Station and is used by Amtrak trains, among other projects.

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

“This project is vital to fifty million people in the northeast corridor and to our American economy,” Schumer said.

Representative Pete King, a New York Republican, said Trump should support the project. “Essential to New York & Northeast. Can’t let feud with Schumer hurt New York & United States. Bad enough we got screwed on tax bill,” King wrote on Twitter.

In September, Trump and Chao met with New York Governor Andrew Cuomo, New Jersey Governor Chris Christie and Senate Minority Leader Charles Schumer over the project.

After the meeting, Cuomo said the meeting was “productive” but inconclusive. He noted that an agreement had been reached during the Obama administration for the Port Authority to finance 50 percent of the project with user fees and the federal government to contribute 50 percent.

The Port Authority builds, operates, and maintains critical transportation and trade assets throughout the New York-New Jersey region.

Chao denied that any such agreement had been reached. “There’s no documentation,” she said. “We made no commitments.”

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. In December, New York and New Jersey on Thursday committed $1.75 billion and $1.9 billion, respectively, to fund the new tunnel under the Hudson River, but largely rely on upfront government loans.

But Chao said the two states were offering just a small fraction of overall costs and urged them to commit to funding in writing. (Reporting by David Shepardson Editing by Tom Brown)

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