One of the most consequential urban transit construction programs in the United States is now actively building in East Harlem. The Metropolitan Transportation Authority's Second Avenue Subway Phase 2 — a 1.5-mile extension of the Q train from 96th Street to Harlem-125th Street — entered active civil construction in early 2026, with utility relocation, building demolition, tunnel excavation preparation, and structural work occurring simultaneously along Second Avenue between 104th and 125th Streets.

What Is Being Built

Phase 2 will add three new underground stations at 106th Street, 116th Street, and Harlem-125th Street, connecting with the IRT Lexington Avenue Line (4, 5, 6 trains) and providing an intermodal connection to Metro-North Railroad at 125th Street. The project uses a combination of tunnel boring machines (TBMs) north of 120th Street, cut-and-cover construction to connect existing 1970s-era tunnel segments, and conventional mining for station caverns. The total project budget is $6.99 billion, funded in part by revenues from New York City's Congestion Relief Zone tolling program, with $3.4 billion in federal funding secured through a Full Funding Grant Agreement from the Federal Transit Administration in November 2023.

Four-Contract Structure and Current Status

The MTA has structured Phase 2 around four sequential construction contracts — a deliberate reduction from the larger contract count used in Phase 1, which contributed to cost and schedule challenges. Contract 1, awarded in January 2024 to C.A.C. Industries for $182 million, covers utility relocation and building remediation between 104th and 112th Streets, in advance of the future 106th Street station. As of March 2026, that work includes ongoing gas main relocation, sewer pipe installation, electrical conduit placement, and building underpinning — with completion of major utility work expected by Q4 2026.

Contract 2, awarded in August 2025 to Connect Plus Partners — a joint venture of Halmar International and FCC Construction — covers $1.972 billion in work from 114th Street to 125th Street and Lenox Avenue. That scope includes rehabilitation of existing 1970s-era tunnel segments between 110th and 120th Streets, new tunnel boring from 120th Street northward to 125th Street, excavation of the 125th Street station space, and structural shells for both the 116th Street and 125th Street stations. Building demolition for the tunnel box at 120th Street began in late March 2026, with TBM launch expected in 2027.

Contract 3, covering excavation and structural shell work for the 106th Street station, was advanced to the MTA board for a $1.015 billion award in March 2026, with award projected for Q2 2026. Contract 4, the systems and finishes contract covering track, signals, power, communications, and station fit-out at all three stations, is currently in design.

Engineering Complexity and Scale

Phase 2 is technically demanding in ways that differ from the rock-heavy Phase 1 tunneling under the Upper East Side. North of 92nd Street, Manhattan's bedrock profile drops sharply, forcing tunnels into soft soil — a condition that increases ground movement risk and requires specialized TBM selection and ground treatment. The 22-foot-diameter, 750-ton TBMs that will bore the northern tunnel section must navigate underneath the existing IRT Lexington Avenue Line and through the soft soils of East Harlem before curving west on 125th Street to end near Adam Clayton Powell Boulevard, where storage tracks will serve the new terminal.

The decision to repurpose nearly 1,000 feet of 1970s-era tunnel segments — remnants of a long-abandoned construction program — saves the MTA an estimated $500 million compared to boring entirely new tunnels through that section.

Schedule and Federal Funding Uncertainty

The MTA's official target is a September 2032 revenue service date, and the project is described as on schedule and on budget. However, MTA board documents from March 2026 noted that uncertainty regarding the federal government meeting its contractual obligations to fund this project may impact the timing of the award of Contract 3 — a reference to the broader freeze in the FTA Capital Investment Grants program, which has not approved a new full funding grant agreement since January 2025. Phase 2's FFGA was signed under the Biden administration and remains binding, but payment timing and federal process uncertainty have added a layer of caution to MTA's near-term procurement decisions.

Why This Project Matters to Construction Professionals

At $6.99 billion, Phase 2 of the Second Avenue Subway is one of the largest active urban transit construction programs in the United States. The project generates significant work across a range of trades and disciplines: TBM tunnel boring, cut-and-cover civil work, utility relocation (gas, water, electric, sewer, telecom), building underpinning, deep excavation and ground support, structural concrete, waterproofing, and ultimately systems installation across 1.5 miles of new tunnel.

• Civil and specialty contractors should note that Contracts 3 and 4 — both in procurement or design — will generate additional procurement cycles in 2026 and 2027, including significant MEP systems, architectural finishes, and transit systems work.
• Owners and developers along the Second Avenue corridor will benefit from added transit access; the 125th Street station's intermodal connection to Metro-North creates a new crosstown ridership link that will influence nearby development patterns.
• Program managers and project controls professionals can observe the MTA's contract bundling strategy — four large contracts versus Phase 1's more fragmented approach — as a model for managing interface risk on complex urban underground projects.

What to Watch Next

The Q2 2026 award of Contract 3 (the 106th Street station structure) will be a key near-term milestone. TBM mobilization for Contract 2 tunneling, expected in 2027, will mark the transition from preparatory civil work to heavy underground construction — the most logistically complex phase of the project. Any movement in the federal government's position on Capital Investment Grants will also directly affect MTA's ability to maintain schedule on future contract awards and drawdowns.

Bottom Line

After decades of delays and starts, the Second Avenue Subway Phase 2 is no longer a planning exercise — it is an active construction program with $2.15 billion in contracts awarded, heavy equipment in the ground, and building demolition already completed. For contractors, subcontractors, and engineers active in New York City's transit and civil infrastructure market, the project represents a multi-year work pipeline with additional procurement ahead. For the construction industry at large, it is a reminder that urban underground transit — complex, expensive, and politically difficult — continues to advance when funding is secured and project controls are disciplined.

Sources: MTA — Second Avenue Subway Phase 2 Project Page; ACP Publications — Phase 2 Tunneling Contract Award; MTA Board Document — March 2026 SAS2 Task Force Update; ENR — AECOM-HNTB Project Management Contract