HUDSON RAIL TUNNEL GETS $292 MILLION BOOST FROM BIDEN

>> GOOD EVENING.

WELCOME TO "METROFOCUS."

ON JANUARY 31, PRESIDENT BIDEN CAME TO NEW YORK CITY TO ANNOUNCE A $292 MILLION FEDERAL GRANT TO KICK OFF CONSTRUCTION OF THE LONG DELAYED HUDSON TUNNEL PROJECT.

THE PROJECT, WHICH IS PART OF THE LARGER GATEWAY RAIL INVESTMENT PROGRAM, IS CONSIDERED BY JUST ABOUT EVERY INFRASTRUCTURE EXPERT AS CRITICAL NOT ONLY TO NEW YORK AND NEW JERSEY BUT ALSO TO THE ENTIRE NORTHEAST CORRIDOR REGION.

THAT AMONG OTHER THINGS IS HOME TO 17% OF THE U.S. POPULATION AND CONTRIBUTES 20% OF THE NATION'S GDP.

SO WHAT EXACTLY IS THE HUDSON TUNNEL PROJECT?

WHY HAS THIS CONSTRUCTION BEEN DELAYED FOR OVER A DECADE IF IT IS SO CRITICAL?

IS SENATOR CHUCK SCHUMER RIGHT WHEN HE SAYS THAT THE TUNNEL'S FUTURE IS, QUOTE, FINALLY ASSURED?

JOINING US NOW TO ANSWER THESE AND OTHER QUESTIONS IS THE NEW YORK COMMISSIONER AND CO-CHAIR OF THE BI-STATE GATEWAY DEVELOPMENT COMMISSION, ALICIA GLEN.

WELCOME TO THE PROGRAM.

THANK YOU SO MUCH FOR JOINING US TODAY.

>> THANK YOU FOR HAVING ME.

>> BY THE WAY, I DIDN'T HAVE TIME TO MENTION ALL YOUR RESPONSIBILITIES.

I DO WANT TO SAY THAT YOU ARE THE FOUNDER AND MANAGING PRINCIPAL OF THE REAL ESTATE DEVELOPMENT COMPANY M SQUARED AND SERVE WITH GREAT DISTINCTION AS DEPUTY MAYOR FOR HOUSING AND ECONOMIC DEVELOPMENT IN THE de BLASIO ADMINISTRATION, YOU WERE WITH US BEFORE IN THAT CAPACITY.

WELCOME TO "METROFOCUS."

>> NICE TO SEE YOU AGAIN.

>> COMMISSIONER, FIRST OF ALL, WHAT EXACTLY IS THE HUDSON TUNNEL PROJECT?

WHAT DOES IT ENTAIL?

WHY DO YOU BELIEVE THAT IT'S SO CRITICAL?

TO NEW JERSEY AND NEW YORK AND THE NORTHEAST CORRIDOR REGION.

>> IT REALLY IS.

IT'S INCREDIBLY IMPORTANT TO THE NEW YORK AND NEW JERSEY AND NORTHEAST CORRIDOR.

YOU HIT THE NAIL ON THE HEAD WHICH IS THAT IT'S OF NATIONAL IMPORTANCE.

20% OF THE GDP OF THE COUNTRY COMES FROM THE NEW YORK AND NEW JERSEY METROPOLITAN AREA.

THE IDEA THAT OUR MOST VITAL LINK BETWEEN WASHINGTON, PHILADELPHIA, UP THROUGH NEW YORK INTO BOSTON, COULD BECOME PARALYZED OR REMAIN OUT OF SERVICE FOR ANY PERIOD OF TIME HAS REAL ECONOMIC CONSEQUENCES TO THE NATION, NOT TO MENTION THE CONSEQUENCES THAT IT HAS FOR THE HUNDREDS OF THOUSANDS OF COMMUTERS AND PEOPLE WHO USE INTRA-CITY RAIL EVERY DAY.

THE PROJECT IS A SERIES OF PROJECTS THAT IS KNOWN TO BE AS THE GATEWAY PROJECT.

REALLY, THE CENTERPIECE OF THE PROJECT IS BUILDING A BRAND-NEW STATE-OF-THE-ART TUNNEL UNDER THE HUDSON RIVER.

THE CURRENT TUNNEL -- THOSE OF US WHO ARE NEW YORKERS AND LIKE TO THINK WE KNOW SOMETHING ABOUT HISTORY, THE CURRENT TUNNEL THAT SERVICES AMTRAK AND OVER 800 NEW JERSEY TRANSIT TRAINS A DAY WAS BUILT 113 YEARS AGO.

IF YOU THINK ABOUT THAT, THE HISTORY OF THE UNITED STATES.

THIS TUNNEL IS A VERY AGING PIECE OF INFRASTRUCTURE.

WE NEED TO HAVE A MODERN RAIL SYSTEM.

SO THIS -- THE CENTERPIECE OF GATEWAY IS THE ACTUAL TUNNEL ITSELF.

THERE ARE ANCILLARY PROJECTS ON BOTH SIDES OF THE RIVER THAT WILL IMPROVE CONNECTIVE WITH BRIDGES, ET CETERA.

AT THE END OF THE DAY, BUILDING A NEW TUNNEL AND REHABBING THE OLD TUNNELS BEGINS TO PUT US INTO THE 21st CENTURY.

LET'S BE REAL.

WE NEED TO HAVE MODERN RAIL.

NEW YORKERS AND BUSINESSES IN NEW YORK AND THE REGION DESERVE THAT KIND OF QUALITY OF TRANSPORTATION.

>> BY THE WAY, QUICKLY FOR OUR AUDIENCE, WHAT IS THE ROLE OF THE BI-STATE GATEWAY COMMISSION IN THIS PROCESS?

>> IT IS -- IT'S INTERESTING -- SIMILAR TO THE PORT AUTHORITY.

IT'S THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY WHOSE CHARTER WAS TO BE A BIPARTISAN AND BI-STATE ENTITY THAT COULD REPRESENT BOTH SIDES OF THE RIVER AND TAKE ON LONG AND BIG INFRASTRUCTURE PROJECTS THAT ARE CRITICAL TO THE REGION.

AS YOU KNOW, INFRASTRUCTURE ISN'T ALWAYS SEXY OR WORK ON POLITICAL CYCLES.

I THINK THAT'S ONE OF THE CHALLENGES THAT WE FACE AS A NATION BUT ALSO HERE IN THE REGION, THAT IF YOU HAVE COMPETING INTERESTED WITH DIFFERENT GOVERNORS, DIFFERENT ELECTION CYCLES, AND YOU HAVE ALL THESE FUNDERS, THE FEDERAL GOVERNMENT, STATE GOVERNMENT, CITY, IT GETS VERY HARD TO ACTUALLY MANAGE A PROJECT.

SO CREATING A COMMISSION WHO HAS INDEPENDENT AUTHORITY OVER THIS SO THAT IT CAN SURVIVE THE DURATION OF BUILDING A PROJECT OF THIS COMPLEXITY BUT ALSO HOPEFULLY TRY TO NAVIGATE AND DE-POLITICIZE, IF THAT'S EVEN A CONCEPT THAT WE CAN SAY.

BUT I THINK WE HAVE TO SEE THIS AS NOT A POLITICAL ACTIVITY BUT AS ONE THAT IS FUNDAMENTALLY CRITICAL TO OUR ECONOMY.

>> AS I SAID IN THE INTRODUCTION, PRESIDENT BIDEN CAME TO MANHATTAN AND ANNOUNCED THE $292 MILLION GRANT.

HOW SIGNIFICANT IS THAT FOR THE ENTIRE PROJECT?

IF ONLY PSYCHOLOGICALLY OR FOR MOMENTUM SAKE.

>> ABSOLUTELY, THERE'S A SYMBOLIC PIECE OF THIS.

ONE OF THE PROBLEMS THAT'S BEEN PLAGUING THIS PROJECT FOR THE PAST DECADE HAS BEEN A LOT OF TALKING AND NOT A LOT OF WALKING.

OBVIOUSLY, THE TRUMP YEARS REALLY MADE THIS MUCH MORE DIFFICULT WHEN FOR POLITICAL REASONS AND/OR OTHER STRATEGIC REASONS, THE GOVERNMENT REALLY WITHDREW FROM BEING A PLAYER AT THE TABLE.

YOU HAD THIS PERFECT STORM WHERE YOU HAVE A PRESIDENT WHO IS ACTUALLY KNOWN AS AMTRAK JOE, THIS COMES TO HIM LITERALLY IT IS THE WAY HE HAS EXPERIENCED COMMUTING AND EXPERIENCED THE VITAL IMPORTANCE OF HAVING MODERN INFRASTRUCTURE.

SO FINALLY, WE HAVE AN ALIGNMENT WHEREAS A RESULT OF THE PRESIDENT AND THE CONGRESS'S WORK WITH THE INFRASTRUCTURE BILL AND THE BUILD AMERICA BACK FINANCING, THIS IS ACTUALLY A REAL-LIVE DOWN PAYMENT ON THIS PROJECT.

$300 MILLION IS NOT GOING TO REALLY MAKE A DENT IN THE OVERALL SIZE OF THE PROJECT.

BUT AS YOU KNOW, MOMENTUM MATTERS.

IT'S A REALLY IMPORTANT STEP TO STOP TALKING ABOUT WHETHER OR NOT WE'RE GOING TO BREAK GROUND AND ACTUALLY BREAK GROUND.

I THINK PARTICULARLY WHEN WE ARE GOING TO BE GOING INTO ANOTHER ELECTION CYCLE.

THE GOOD NEWS IS, IF WE DO ALL THE WORK WE'RE DOING RIGHT NOW AND GO THROUGH ALL OF THE APPROVALS THAT WE ARE PUSHING SO HARD TO GET THROUGH REGULATORY AGENCIES, THERE BECOMES AN INEVITABILITY TO IT.

THIS WILL GO TO BUILDING THE CONCRETE CASING.

AT THE END OF THE DAY -- THIS IS WHY NEW YORKERS CARE ABOUT THIS -- IS THAT IT'S ALSO REALLY SAYING TO NEW YORKERS AND PEOPLE IN THE REGION THAT WE ARE GOING TO BE DOING SOMETHING ABOUT PENN STATION, WE'RE GOING TO BE IMPROVING THE QUALITY OF COMMUTERS AND BUSINESSES' LIVES.

THIS IS THE VITAL PIECE.

>> THE ENTIRE PROJECT IS NOW ESTIMATED TO COST AT THE END OF IT $16 BILLION.

HOW MUCH BEYOND THE $292 MILLION THAT HAS BEEN ANNOUNCED HAS THE FEDERAL GOVERNMENT PLEDGED FOR THE PROJECT, OR YOU THINK WILL BE COMMITTING TO THE PROJECT?

>> RIGHT NOW, WE'RE IN THE PROCESS OF GOING THROUGH THE PRELIMINARY RISK ASSESSMENT.

WE SUBMITTED A FINANCIAL PLAN TO THE U.S. GOVERNMENT.

WE ARE ASSUMING AND EXPECTING THE FEDERAL GOVERNMENT WILL PLAY BETWEEN 50% TO 60% OF THE TOTAL PROJECT COST.

IT'S A MOVING NUMBER RIGHT NOW.

I THINK AS NEW YORKERS WE SHOULD BE VERY EXCITED AND HAPPY THAT WE HAVE SENATOR SCHUMER, WHO IS OBVIOUSLY A MASSIVE PROPONENT OF THE PROJECT.

AT THE END OF THE DAY, THIS WILL BE A REAL PARTNERSHIP BETWEEN AGENCIES, THE FEDERAL GOVERNMENT AND THE STATE GOVERNMENT.

THE NUMBER IS MOVING.

IT'S A LARGE NUMBER.

THE COST OF NOT DOING THE PROJECT IS -- >> WE WILL TALK ABOUT THE COST OF NOT DOING IT IN A SECOND.

IT'S MOVING TO THE POINT WHERE NOT THAT LONG AGO I THINK LESS THAN A YEAR AGO IT WAS ESTIMATED IT WAS PROJECTED TO COST $14 BILLION.

NOW IT'S $16 BILLION.

WHY THAT CHANGE?

IS IT A FUNCTION OF THE GROWING INFLATION?

WHETHER IT IS OR IS NOT, HOW CONCERNED ARE YOU OF BUILDING THIS THING IN A MOMENT WHERE WE HAVE HIGH INFLATION AND WHERE PEOPLE ARE PREDICTING A RECESSION?

>> I THINK -- LOOK, THE NUMBER DID MOVE SUBSTANTIALLY.

THAT'S A RESULT OF TWO THINGS.

ONE, INFLATION IS REAL IN TERMS OF PARTICULARLY THE COST OF RAW MATERIALS AND LABOR.

THE FEDERAL GOVERNMENT ACTUALLY REQUIRES YOU TO BUILD IN A FAIRLY SUBSTANTIAL CUSHION TO TAKE INTO ACCOUNT WHAT LABOR AND COMMODITY MARKET WILLS BE.

THE INTEREST RATE ENVIRONMENT MATTERS.

AT THE END OF THE DAY, WHEN THE FEDERAL GOVERNMENT IS ACTUALLY SUPPORTING THE PROJECT, IT'S BECAUSE THE STATES ARE BORROWING MONEY FROM THE FEDERAL GOVERNMENT.

AS YOU KNOW, INTEREST RATES HAVE RISEN APPROXIMATELY 200 TO 250 BIPS IN AN UNPRECEDENTED SPIKE.

AT THE END OF THE DAY, THAT NUMBER HOPEFULLY WILL COME DOWN AS THINGS SETTLE DOWN IN TERMS OF CONSTRUCTION COSTS, LABOR AND INTEREST RATES START TO DROP.

BUT I THINK THAT WE WOULD ALL RATHER BE HONEST ABOUT WHAT OUR OUTSIDE EXPOSURE IS AND GET COMFORTABLE WITH IT AND THEN IT'S OUR JOB AS PEOPLE WHO ARE PROTECTING TAXPAYERS TO REALLY MAKE SURE THAT WE ARE SPENDING OUR MONEY WISELY.

WE ARE IN A VERY DIFFICULT ENVIRONMENT RIGHT NOW.

THAT DOESN'T MEAN WE STOP.

IT MEANS WE JUST WORK HARDER.

>> AS YOU KNOW, AS MANY OF OUR VIEWERS, ESPECIALLY VIEWERS FROM NEW JERSEY KNOW, THERE WAS A PREDECESSOR PROJECT WHICH ALREADY HAD BILLIONS OF DOLLARS COMMITTED TO IT IN 2010.

THEN GOVERNOR CHRISTIE PULLED THE PLUG BECAUSE HE SAID HE WAS TOLD IT WOULD GO OVER BUDGET AND THE STATE, ONLY NEW JERSEY, WOULD HAVE TO COVER THE COSTS BEYOND THE PROJECTED COSTS.

IF THERE ARE COSTS OVERRUN, WHICH THERE WILL BE SOME, NO DOUBT, THIS TIME DOES NEW YORK AND NEW JERSEY HAVE TO FOOT THE BILL?

IS THAT A PROBLEM?

>> LOOK, THERE'S ALWAYS POTENTIAL RISK IN ANY LARGE-SCALE PROJECT.

YOUR VIEWERS ARE INTELLIGENT ENOUGH TO KNOW THAT.

THE TRUTH OF THE MATTER IS ONE OF THE REASONS WHY THE NUMBER IS COMING OUT AS BIG AS IT IS IS BECAUSE WE ARE DOING A MUCH MORE THOROUGH RISK ANALYSIS AND ADDING CONTINGENCIES.

IT'S A MORE NUANCED PROCESS.

HE DIDN'T WANT TO PLEDGE NEW JERSEY'S REVENUE TOWARDS WHAT IS SERVICING MOSTLY NEW JERSEY CONSTITUENTS.

ABOUT 20% OF THE TRAINS THAT GO THROUGH THE TUNNEL ARE AMTRAK.

80% ARE NEW JERSEY TRANSIT.

AT THE END OF THE DAY, THE STATES ARE GOING TO HAVE TO BEAR SOME COST.

THE FEDERAL GOVERNMENT IS COMMITTED.

THE FACT THAT THE FIRST MONEY IN THE PROJECT RIGHT NOW IS $300 MILLION THAT PRESIDENT BIDEN HIMSELF CAME UP DURING A WEEK HE WAS GETTING READY TO DO THE STATE OF THE UNION, SHOULD SUGGEST AND SIGNAL TO EVERYBODY THAT THIS IS A HUGE PRIORITY AND THAT, AGAIN, THERE ARE VERY SMART, COMMITTED PEOPLE HERE WHO ARE GOING TO WORK AS HARD AS THEY CAN TO MAKE SURE WE DO NOT HAVE HUGE BUDGET OVERRUNS.

>> SENATOR SCHUMER SAID THE PROJECT IS FINALLY ASSURED.

ARE YOU THAT OPTIMISTIC?

IS IT ASSURED?

>> THAT'S THE DIFFERENCE BETWEEN A SENATOR AND A COMMISSIONER.

I THINK THE ANSWER IS, YES.

THE WORK TO REALLY LOCK DOWN THE AGREEMENTS AND THE FEDERAL FUNDING AGREEMENT, WHICH IS ULTIMATELY THE DOCUMENT THAT DRIVES ALL OF THE OTHER FINANCIAL COMMITMENTS, THAT WILL BE DONE OVER THE COURSE OF THE NEXT 18 MONTHS.

I'M NOT A POLITICAL PROGNOSTICATOR.

I'M ASSUMING FOR THE NEXT 18 MONTHS, WE'RE GOING TO BE ABLE TO WORK PRODUCTIVELY WITH WASHINGTON, WITH SENATOR SCHUMER AND WE HAVE TWO GOVERNORS -- LET'S BE HONEST, FOR THE FIRST TIME IN A LONG TIME, WHO HAVE BOTH BEEN PUBLICALLY COMMITTED TO THIS PROJECT AND ARE MORE INTERESTED IN GETTING SOMETHING DONE THAN JUST PLAYING GAMES WITH EACH OTHER.

RIGHT?

I THINK THIS IS A REALLY UNIQUE TIME.

I FEEL VERY CONFIDENT THAT THIS IS GOING TO HAPPEN.

>> IF IT HAPPENS, QUICKLY, BECAUSE I GOT ANOTHER QUESTION AND WE HAVE LESS THAN A MINUTE, WHAT'S THE TIME LINE?

WHEN IS -- IF ALL GOES WELL, WHEN IS THE WHOLE THING GOING TO BE FINISHED?

>> THIS IS SHOCKING.

IT WILL MAKE EVERYBODY CRAZY.

THE TRUTH IS, THE TUNNEL -- THE NEW TUNNEL WILL PROBABLY NOT BE FINISHED UNTIL 2034.

THE EXPERIENCE OF INCREASED CAPACITY, OF HAVING TWO FULLY IN-SERVICE TUNNELS, PROBABLY 2038 OR '37.

I WILL TRY TO MAKE THAT GO FASTER.

I WOULD LIKE TO GET ON THOSE TRAINS WHILE I CAN WALK AND NOT BE IN A WHEELCHAIR.

>> IF YOU ARE COMMITTED TO IT, I KNOW IT'S GOING TO HAPPEN.

WE WILL HAVE TO END IT THERE.

OUR TIME IS OVER.

COMMISSIONER, THANK YOU FOR JOINING US TODAY.

IT'S BEEN A PLEASURE TO TALK TO YOU.

IT'S GOING TO HAPPEN.

IF IT DOESN'T, WE'RE IN DEEP DOO-DOO.

>> WELL SAID.