Karen Yi reports for NJ.com:


A crucial infrastructure deal to fund a multi-billion-dollar rail tunnel under the Hudson River suffered a major setback Friday, after the Trump Administration announced the project relied on a “non-existent” agreement to secure federal funding. 


The tunnel is part of the larger Gateway Project and would build a two-track commuter tube for Amtrak and New Jersey Transit trains traveling between New Jersey and New York Penn Station — among the busiest transit hubs in the country.


But the Federal Transit Administration said Friday it did not recognize the agreement struck under former President Obama that would have the federal government kick in half of the bill, according to a letter sent to New York and New Jersey officials.


“There is no such agreement,” FTA Deputy Administrator K. Jane Williams wrote. “We consider it unhelpful to reference a non-existent ‘agreement’ rather than directly address the responsibility for funding a local project where 9 out of 10 passengers are local transit riders.”


A copy of the letter was published online by Crain’s New York. 


Williams wrote she had “serious concerns” about the first phase of the project that asked for $11.1 billion from the federal government. “Your proposal also overlooks that 50% would be considerably higher than much existing precedent for past ‘mega projects,'” she said. 


Read the full story