Skanska Secures $1.73B Second Avenue Subway Hudson Tunnel

NEW YORK, UNITED STATES – The Metropolitan Transportation Authority (MTA) and the Gateway Development Commission (GDC) awarded two massive rail construction contracts in mid-2026 totaling more than $1.73 billion to joint ventures involving Skanska. The MTA selected a $1.02 billion joint venture with Traylor Bros. and Walsh Construction to build Phase II of the Second Avenue Subway, which is scheduled for substantial completion by the third quarter of 2030. Concurrently, GDC awarded a $712 million contract to a Skanska Creamer Sanzari joint venture for the New Jersey Surface Alignment portion of the Hudson Tunnel Project.

What Does This Contract Cover?

The two newly awarded contracts cover critical civil engineering works for major transit expansions in the New York metropolitan area, totaling $1.732 billion in capital commitments. For the Second Avenue Subway Phase II project, the Skanska-led joint venture will extend the Q Line into Harlem and East Harlem, constructing new station structural shells at 106th Street and 116th Street, plus a terminal station at 125th Street. Meanwhile, the $712 million Hudson Tunnel Project contract covers 1.5 miles of surface alignment infrastructure in New Jersey, including 4,170 feet of retaining walls, a 3,150-foot viaduct, and bridges over Secaucus Road. Design services for the Second Avenue Subway Phase II will be led by consulting firm Mott MacDonald, while the GDC contract will prepare the New Jersey alignment for future track and signal installation.

Key Contract Data

How Does This Compare to Similar Contracts?

Megaproject transit procurements in the United States and the United Kingdom continue to face steep financial scales, as evidenced by comparable international infrastructure pipelines. For instance, the High Speed 2 (HS2) rail program in the United Kingdom recently launched market engagement for a £1.24 billion ($1.58 billion) package of interim maintenance contracts (Source: High Speed Two, 2026). In highway infrastructure, National Highways is preparing a £20 million consultancy framework for the Lower Thames Crossing stretching up to eight years (Source: National Highways, 2026). Domestically, Sound Transit is advancing a 25-year light rail expansion in Seattle despite a massive $34.5 billion funding gap (Source: Sound Transit, 2025). The high cost of the New York-area projects reflects the extreme complexity of tunneling and surface integration in dense urban environments compared to these peer-level programs.

Editor’s Analysis

These awards underscore a strategic shift toward design-build delivery to mitigate the high contingency costs typical of complex North American transit projects. Securing tier-one contractors like Skanska for both the Hudson Tunnel and Second Avenue Subway mitigates delivery risk but highlights the industry’s reliance on a limited pool of mega-project bidders. This concentration of risk is particularly acute as metro systems navigate severe post-pandemic financial headwinds and massive funding gaps (Source: Sound Transit, 2025).

FAQ

Q: What stations are being added to the Second Avenue Subway?
A: Phase II will add new stations at 106th Street and 116th Street on Second Avenue, and a terminal station at 125th Street and Lexington Avenue. This terminal will provide critical transfers to the 4/5/6 subway lines and Metro-North Railroad.

Q: What is the scheduled completion timeline for the Second Avenue Subway Phase II?
A: The project is expected to reach substantial completion by the third quarter of 2030. However, specific interim milestone dates for the intermediate stations have not been publicly disclosed.

Q: What infrastructure is being built for the Hudson Tunnel Project in New Jersey?
A: The New Jersey Surface Alignment package includes 1.5 miles of infrastructure, featuring 4,170 feet of retaining walls, 3,150 feet of viaduct, and bridges over Secaucus Road. It also involves relocating utilities and building an auxiliary signal power substation.