By David Shepardson
March 11 (Reuters) - The U.S. must keep making payments on the $16 billion New York Hudson Tunnel, after an appeals court on Wednesday rejected the Trump administration's bid to halt paying for the project.
The Hudson Tunnel Project aims to build a new commuter rail tunnel connecting Manhattan and New Jersey and repair a century-old tunnel used by more than 200,000 travelers and 425 trains daily. The existing tunnel, heavily damaged by Hurricane Sandy in 2012, needs frequent emergency
repairs that disrupt travel on the nation's most heavily used passenger rail line.
A three-judge panel of the 2nd U.S. Circuit Court of Appeals said if the lower-court temporary restraining order was overturned pending an appeal, the U.S. Transportation Department would be free to suspend future payments and "tunnel construction sites will become inactive, posing serious risk of injury and deterioration that the states, at considerable expense, will become responsible to safeguard against."
U.S. District Judge Jeannette Vargas ordered the federal government to release funds for the project in February and the Justice Department had asked to put her ruling on hold pending its appeal.
Construction was halted on Feb. 6 but resumed last month after the Trump administration released $235 million in funding it had withheld since Oct. 1. The U.S. Transportation Department did not immediately comment on the ruling.
(Reporting by David Shepardson; editing by Chris Sanders)
