New CEO of Massive Gateway Rail Tunnel Project Faces Big Challenges

Tom Prendergast faces challenges as CEO of the $16 billion Gateway rail tunnel project, tasked with keeping it on time and budget.

Mon February 24, 2025 - Northeast Edition
NJ.com

Tom Prendergast made a bold statement when he was appointed CEO of the commission building the $16 billion Gateway project that will create two new rail tunnels under the Hudson River and rehabilitate the existing ones.

His first official comment as boss in Jan. was to vow that "on time and on budget has to be the mantra" for the project.

The technical terms for that — scope, schedule and budget — were used a lot during a recent interview Prendergast did with NJ.com.

"I keep using those terms because it has to be laser focused on," he said.

Can he succeed in a region where mega transportation projects are legendary for blowing schedules and budgets, despite the best intention of their builders?

The Gateway Development Commission (GDC) calls for building two new tunnels and rehabilitating the two existing tunnels that were originally built by the Pennsylvania Railroad and opened 115 years ago. It also will construct two more tracks for a total of four between the tunnels and New Jersey's Secaucus Junction station.

A former CEO of the New York City Metropolitan Transportation Authority (MTA), Prendergast took over as the second chief of the GDC, the agency formed to oversee construction and financing of the new tunnel and its allied projects.

He led the MTA during two of its biggest and more controversial projects: building the Second Avenue Subway and East Side Access, the latter of which bored two new rail tunnels in Queens and Manhattan to bring Long Island Rail Road trains to deep cavern stations under Grand Central Terminal.

Both were not only giant tunneling projects, he said, but controversial for being over budget and behind schedule, due to a variety of reasons.

East Side Access was $7.5 billion over an original $3.5 billion budget and 10 years behind schedule. It opened in early 2023 under a new name, Grand Central Madison.

The first 1.8-mi. phase of the long-promised Second Avenue subway, opened in 2017, has the distinction of being the most expensive subway extension ever built with a cost of $4.5 billion.

Prendergast said there are lessons learned from those two projects that can be used on Gateway.

"Both of those projects were in the billions of dollars, both ran multiple years," he said. "There were some good decisions made, and some arguably bad decisions made. You need to look at both and put together a structure that takes advantage of that."

To learn from that experience, Prendergast said those projects have to be looked at from the standpoint of what went wrong in hindsight and what could have been done differently, to result in a better outcome and keep them on schedule and budget.

That goes back to his mantra of "scope, schedule and budget," and immediately dealing with unexpected issues that will come up. Despite the efforts of the GDC to do preliminary testing work, tunnel building is filled with unknowns, based on past projects.

"You have to understand problems will occur," Prendergast said. "The likelihood of no problems occurring is zero."

The solution to them is immediate action to identify the problems and take corrective actions, he said.

"The timely identification of problems and implementation of corrective actions to address those problems and keep the project on schedule and within budget is not lost on me," Prendergast said. "You have to manage a project like that, schedule-wise, on a daily basis. For every day of delay on a project of this magnitude, it costs another million dollars in additional labor cost and materials costs."

"One advantage that the Gateway Program has over the two MTA projects is that the commission does not have to manage both aspects of getting the tunnel built and the rail service that will use it," he said.

Former Gateway CEO Kris Kolluri stressed the importance of securing all the project funding and starting construction in 2024, but contracts to build the actual tunnel have not been awarded.

Various Factors Could Help Gateway Escape Funding Cuts

With the arrival of the Trump administration and its stated goal of cutting $2 trillion from the federal budget, Prendergast was asked by NJ.com if Gateway is a potential target for funding cuts.

In response, he said bipartisan support for Gateway remains today due to it being an integral part of the transportation network for Northeastern states.

"Without the tunnels and rehabilitating the old ones ... aviation can't handle all the travel demand on [the] Northeast Corridor," he said. "It's a combination of aviation and trains. I'd fall back on that and reinforce the bipartisan support for those reasons."

Prendergast said keeping on "scope, budget and schedule" will answer any questions the Trump administration has about project costs, but the GDC will still need "to make sure we are responsive to whatever concerns they have."

Another factor that he emphasized was Gateway's economic impact — the tens of thousands of workers employed on the project, from engineers to laborers.

Roughly 20,000 people are currently at work on the three Gateway job sites in New Jersey and Manhattan and those numbers are predicted to swell to more than 100,000 workers once all 10 contracts are awarded.

That kind of "gainful employment," he told NJ.com, "is what built … and sustains the country. It's important."

"The other economic argument is that the New York region produces 20 percent of the nation's gross domestic product," Prendergast said. "That requires getting the work force from New Jersey and the Hudson Valley to and from the city."

Why Take On the Gateway Project?

Prendergast explained that transportation has been his life's work, as both an operator and designer in the public and private sectors.

"To be able to work on a project that is as critical as this is to New York was an opportunity I couldn't pass up," he said.

The Federal Transportation Administration schedule projects completion of the two new tunnels to occur in June 2038. However, GDC officials anticipate the new tunnels will be completed by 2035, with the rehabilitation of the existing ones finishing in 2038.

"[With] any project that runs this length of time, very rarely does the one person who started it stick around," Prendergast said.

Rather, his expectation is to serve for a period of time when the contracts get awarded and the project gets embedded with a structure to monitor and manage them closely.

"I'll pass the baton to someone else and leave the project in a good standing within ‘scope, schedule and budget,'" he said.