The U.S. Dept. of Transportation’s Federal Railroad Administration is shaking up plans for a $7-billion reconstruction of New York City’s Pennsylvania Station by moving authority over the project from the Metropolitan Transportation Authority to Amtrak. 

As part of the move, the federal rail agency is canceling the Intercity Passenger Rail Program for the Northeast Corridor grant it had previously awarded to MTA. Last November, the agency selected MTA to receive up to $72.5 million for Penn Station reconstruction and selected Amtrak for up to $71.9 million to expand station capacity. The joint venture design team, named in 2022, includes architect of record FXCollaborative (formerly Fox & Fowle), global engineer WSP and British design studio John McAslan and Partners, a consultant.

Amtrak will now serve as master developer for both projects. Shifting the plans will save about $120 million, according to USDOT. Officials said they favor a public-private partnership model for the station. 

“New York City deserves a Penn Station that reflects America’s greatness and is safe and clean,” U.S. Transportation Secretary Sean Duffy said in a statement. 

He criticized MTA for “inefficiency, waste and mismanagement” of the proposed station overhaul. 

The move comes as USDOT and New York officials are in conflict over the city’s first-in-the-country congestion pricing toll program. The Trump administration has moved to end the program, which launched at the start of this year, and MTA is suing USDOT to keep it active. 

But despite that dispute, New York officials expressed support for the Penn Station move. 

Gov. Kathy Hochul (D) said in a statement that she had requested that the federal government fund the work, in multiple meetings with President Donald Trump.

“This is a major victory for New Yorkers, and the use of federal funds will save New York taxpayers $1.3 billion that would have otherwise been necessary for this project,” Hochul said. 

MTA Chair and CEO Janno Lieber also said in a statement that he is “glad the federal government is focusing on [Penn Station reconstruction] now.”

Plans to update Penn Station have been discussed for years. Hochul and former New York Gov. Andrew Cuomo both shared proposals for the site and some surrounding properties in 2021. Since then, transit advocates have also offered input and called for infrastructure to allow through-running of commuter trains. 

MTA and general contractor Skanska USA Building Group also completed a $412-million renovation of Penn Station’s 33rd Street concourse used by the Long Island Rail Road in 2023. 

Lieber noted that MTA customers account for two-thirds of Penn Station’s total ridership. 

“As the major leaseholder in the station, we expect to participate in the administration’s and Amtrak’s efforts to ensure future plans meet the needs of everyone who uses it,” he said.