Howard Street Tunnel cost rises to $565 million; MDOT to cover $45 million, CSX $55 million

The Public Safety, Transportation, and Environment Subcommittee heard on-the-record analysis Wednesday that the Howard Street Tunnel rehabilitation — the largest capital project in the Maryland Port Administration’s six‑year plan — has grown from an estimated $466 million to $565 million, with a revised completion now projected in spring 2027.

The increase of nearly $100 million was described by Steve McCulloch of the Department of Legislative Services as driven by three factors: post‑pandemic inflation in materials and labor; a larger‑than‑expected number of government and utility approvals and related costs; and an extended construction schedule intended to minimize disruption to rail operations. "When the project received federal funding ... the estimated cost was $466,000,000," McCulloch said, adding that the new CTP shows the cost at about $565,000,000 and the completion date pushed back to 2027.

Why it matters: the Howard Street Tunnel is the top capital priority in the port’s pipeline and the cost change affects the department’s capital cash flow and project sequencing. DLS told the subcommittee MDOT has agreed to cover $45 million of the additional cost, while CSX will cover the remaining $55 million, and asked whether additional state support beyond the Transportation Trust Fund would be sought.

MDOT’s position: Transportation Secretary Paul Whitepfeld told senators the Transportation Trust Fund will cover the state’s share and described negotiations with CSX as necessary to resume construction. He said operational constraints — CSX’s business model prevents long full closures and forces shorter work windows — and permitting and neighborhood concerns in Baltimore City increased time and labor required for the work. "We negotiated the level we did," Whitepfeld said, arguing the negotiated cost sharing also reflected a need to restart stalled construction contracts.

Scope and context: DLS’s presentation placed the tunnel within a $413 million fiscal‑2025 PAYGO allowance and a six‑year capital program in which 58% of spending addresses system preservation and 36% expansion and efficiency projects (including Mid Bay ecosystem restoration). DLS also noted that port operating revenue often exceeds operating expense but is not sufficient to cover both operating and capital needs.

Follow‑up requested: committee members asked MDOT for a detailed cost breakdown of the nearly $100 million increase by driver (inflation, approvals, schedule/operations) and for the agency to provide supporting documentation. MDOT agreed to provide a matrix of cost drivers and additional detail.

What comes next: the subcommittee closed its questions of the Port Administration after receiving commitments to supply the requested cost detail. No formal vote was taken during the hearing; the Howard Street Tunnel remains on the capital program and subject to further budget review and oversight by the legislature.