The construction of New York City’s new $16.1 billion rail tunnel took a major step forward Tuesday when the commission overseeing the project awarded a contract that preserves a key right-of-way.

The vote by the Gateway Development Commission puts Amtrak, the future owner of the tunnel, in charge of $292 million in construction for the right-of-way. The timing of the deal skirts a potentially dire engineering conflict with the expanding Hudson Yards waterfront neighborhood on Manhattan’s West Side.

President Joe Biden’s administration, which announced a federal grant for the job in January, said the right-of-way, known as concrete casing, must be finished prior to the next round of Hudson Yards construction. New foundations, if they were to be built prior to the casing, “would likely impede the path of the tunnel and make the project extremely difficult,” according to a statement.

The Gateway tunnel project involves a new regional and commuter rail link beneath the Hudson River to serve the Northeast Corridor, the nation’s busiest passenger-train route. Amtrak says its existing tunnel, more than a century old, is safe, though increasingly unreliable. 

The $292 million for construction of the casing was included in the $1 trillion US infrastructure bill signed by Biden in November.