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The major works on E30 and 8th Street will boost connectivity and access for Musaffah and neighbouring cities.
The proposed scheme includes 121 homes in its first phase, with planning approval and contract signing still to come.
The upgrade will include new traffic signals, bus shelters, cycleways and underground utilities as Lincoln prepares for population growth.
The first two machines will excavate the first 5,100ft of new rail tunnels from North Bergen to the Hudson County Access Shaft near Weehawken-Hoboken.