By Hilary Russ
NEW YORK (Reuters) - Construction began Friday on New Jersey's Portal Bridge, a key step forward for one of the nation's most critical infrastructure projects, but there was continuing uncertainty about its future funding.
The $1.5 billion replacement for a 107-year old bridge, which is a critical early piece of a program to fix a rail logjam in the region, officially broke ground with $20 million of early construction activities.
Part of Amtrak's larger Gateway Program, the bridge groundbreaking "demonstrates the commitment of the Gateway partners to this important project of national significance," said Amtrak Board Chairman Tony Coscia in a statement.
NJ Transit and the Port Authority of New York and New Jersey are also partners in the Gateway Program, which could cost more than $29 billion. A large chunk of that price tag would come from digging a new train tunnel underneath the Hudson River.
The program aims to fix New York area bottlenecks in the national passenger rail corporation's Northeast Corridor between Washington and Boston.
New York and New Jersey will split the broader program costs with the federal government, but neither state has said exactly how it will pay for its share.
Uncertainty also lingers about federal commitment to the program after President Donald Trump's transportation department withdrew from the board overseeing Gateway in July, and as Trump's election campaign pledge to create $1 trillion of U.S. infrastructure building stalled.
"I hope this is a signal that funding commitments for the tunnel construction will soon follow," said Denise Richardson, executive director of the General Contractors Association of New York, about the groundbreaking.
She praised the Port Authority for agreeing to $2.7 billion of Gateway financing, which it included in its February capital plan.
Amtrak, the Port Authority and NJ Transit will cover half of the bridge costs together. But major construction will not start until the federal government commits to the remainder. Finance costs for the bridge could be an estimated $100 million.
The project won environmental approval in 2008 but suffered funding delays, according to Federal Railroad Administration documents.
"Bureaucratic wrangling and political infighting" also caused past delays, said Andrew Right, founder of Cherry Lane Capital, who served as a Gateway trustee for former U.S. Transportation Secretary Anthony Foxx.
Breaking ground "signals a willingness to work together to solve the larger funding and financing issues," Right said, noting that it was "a first step."
Both states still have to identify "how you're ultimately going to pay for even 50 percent of project costs," he said of Gateway.
(Reporting by Hilary Russ in New York; Editing by Frances Kerry)