Work on the Hudson Tunnel Project resumed last month after a funding cutoff forced a pause, but officials warn workers could face another furlough if federal funds don’t continue flowing.

Nearly 1,000 workers had to walk off construction sites last month when the Trump administration cut funding. New Jersey Gov. Mikie Sherrill and New York Gov. Kathy Hochul sued the administration for the $205 million in reimbursement funding and won, allowing work to restart.

“While workers are back on the job for now, GDC will have to pause construction again in two to three months if federal funding disbursements do not continue. In addition, contract awards for the Hudson River Tunnel and New Jersey Surface Alignment contracts remain on hold,” the Gateway Development Commission said in a statement.

Officials say significant progress has been made since the start of 2026, including completion of the Tonnelle Avenue Bridge & Utility Relocation Project, installation of pipes and construction of an overwater platform, among other milestones.

“The Hudson Tunnel Project is the most urgent passenger rail project in the country, and GDC’s mission is to deliver it as soon as possible. Our workers are back, and we are moving full steam ahead across all our construction sites, but we will have no choice but to stop work again if the federal government does not continue to disburse the funds that are committed to the project,” said GDC CEO Tom Prendergast. “This project is too important to delay. That’s why we’re doing everything possible to regain consistent and predictable access to all our federal funding so we can keep our workers on the job and deliver the reliable, modern rail transit Americans deserve.”