The biggest challenge is squeezing the additional tracks and new station platforms into the area adjacent to the existing Penn Station in Manhattan. Most people have no idea how costly and time-consuming it is to do a construction project underground in a place where you have to work around existing infrastructure and utilities and reinforce building foundations as you go along.
I am involved in the estimate preparation for one of the Joint Ventures, this is a Design/Build project...NO EXTRA'S...make me a tunnel from here to here (under river portion is in mud)and the land portions are in rock.
The NY station will cost as much as the under river section.
And for the ‘the Contractors are ripping us off crowd’ the only reason the Contractors are taking the tremendous risks of bidding and building this tunnel is TO MAKE A PROFIT, risk and reward theory...remember that in school