Bayonne's City Council voted unanimously to approve a set of easement agreements clearing the way for a roughly $32 million project to replace a 49-year-old aqueduct pipeline running beneath the Hackensack River. The pipeline, which connects Bayonne to Kearny, has experienced significant leaks in the past, and officials say those leaks are especially difficult to detect because the line sits underwater.
The council approved three easement resolutions by a 5-0 vote, according to Hudson County View, which first reported on the vote. The first two resolutions cover temporary water pipeline construction easements with Jersey City Urban Edge LLC and Hugo Neu Kearny Development, the private property owners on either side of the river crossing, while a third establishes a permanent easement with Hugo Neu. Jersey City Urban Edge owns property near the project on the Bayonne side of the river, and Hugo Neu Kearny Development owns the parcel on the Kearny side.
Those two properties, along with a separate parcel secured from private owner Joseph Scibetta, are needed for equipment staging and laying pipe during construction. Bayonne secured the Scibetta easement agreement in 2025 and agreed to pay him $15,000 per month from December 2025 through June 2028, per the Hudson County View report. Urban Edge is requiring reimbursement of legal fees and other expenses totaling less than $2,500 plus a one-time $25,000 fee, while Hugo Neu requested no compensation for fees, costs, or property use. All of the easement payments are being financed through Bayonne's Rate Stabilization Fund rather than passed directly to ratepayers.
Why the River Crossing Is So Hard to Fix
Eric Tomaszewski, special counsel and attorney for the aqueduct project, said the work is critical because leaks beneath the Hackensack River would be difficult or impossible to detect using conventional methods. The project will rely on horizontal directional drilling beneath the riverbed and is expected to take up to 18 months to complete, with PVC piping installed in segments thousands of feet long. If construction work damages the Hugo Neu bulkhead, the pipeline project must restore it, and the Hugo Neu property will ultimately contain permanent infrastructure tied to the new aqueduct line.
This is not the first time Bayonne has tried to tackle this stretch of pipe. Back in April 2020, the City of Bayonne approved an ordinance authorizing similar temporary construction and permanent utility easements across the same river crossing to replace two 1,900-foot aging ductile iron transmission mains with polyethylene pipes, at the time naming Suez Water Environmental Services as the system's operator. And the vulnerability isn't new, either — the Bayonne Municipal Utilities Authority notified Jersey City officials back in December 2014 about emergency repairs to an aqueduct leak located underneath the same river, according to a City of Jersey City record from that period. City of Bayonne meeting minutes show that the city previously authorized transmission repair services for a two-year period beginning September 1, 2016, and ending August 31, 2018.
A Bigger Push Across the City's Aging Pipes
Bayonne Business Administrator Andrew Casais said the entirety of the city's aqueduct system needs improvement, and this river-crossing segment is just one phase of a larger effort. Some of Bayonne's aqueduct pipes are as old as 90 years, and the replacement work has been divided into segments prioritized by need. This particular section must be completed by June 30, 2028, under an ongoing condition of Bayonne's water allocation permit with the New Jersey Department of Environmental Protection, which requires the city to secure land use and other permits before construction can proceed. According to a New Jersey Department of Environmental Protection DEP Bulletin dated 6 Nov 2024, projects involving waterfront development near or upon tidal or navigable waters require a Waterfront Development permit. Bayonne receives a fair portion of its water supply from the North Jersey District Water Supply Commission in northern New Jersey, a regional system whose own maintenance shutdowns — including a major 72-inch main repair in October 2022 — have caused temporary low water pressure and discoloration across Bayonne and neighboring Kearny, according to the Town of Kearny.
Bayonne Municipal Services Director Jan Patrick Egan said the project advances the city's goal of ensuring safe drinking water for future generations. The project is subject to a DEP permit requirement, and the city applied for and received approval for I-Bank financing from the state to help pay for the work.
Financing Hinges on a Concession Agreement Amendment
The financing piece matters because Bayonne's water utility has operated under a 40-year public-private concession agreement since December 2012, when a joint venture of United Water — now Veolia — and private equity firm KKR provided $150 million upfront to eliminate $130 million in municipal debt, according to background from the Wharton School of the University of Pennsylvania. KKR later sold its interest in that concession to Argo Infrastructure Partners in 2017. Financing capital projects through the concessionaire carries interest rates exceeding 10 percent, far above the terms available through the state's I-Bank program, which caps base-rate project financing at $25 million per applicant annually and offers a blended rate equal to 75 percent of the I-Bank's own AA market rate, per the New Jersey Department of Environmental Protection.
Tapping that cheaper state financing for the Hackensack River project was made possible by a recent amendment to the concession agreement, which otherwise keeps operations under Veolia's management while ownership and regulatory oversight remain with the municipality under the state's Water Supply Public-Private Contracting Act. The stakes for ratepayers are real: water rates for Bayonne residents rose by more than 50 percent between 2012 and 2021 due to revenue shortfall provisions and guaranteed investor returns built into the original concession deal, according to a 2019 report from NJ Spotlight News. City officials appear to be using the Rate Stabilization Fund and subsidized state loans specifically to keep this $32 million project from adding to that burden.
The Hackensack River crossing work also follows other recent state-backed borrowing by Bayonne. The city secured a $25 million loan from the New Jersey Infrastructure Bank in August 2026, following a $10.1 million loan in June 2025, to fund citywide lead service line replacements mandated under the federal Safe Drinking Water Act, according to the New Jersey Infrastructure Bank. Together, the loans point to a broader, multi-million-dollar overhaul of Bayonne's water infrastructure now underway across the city.
