NORTH BERGEN, N.J. - Construction began yesterday on the nation's largest transportation project, an $8.7 billion rail tunnel into New York City that's expected to reduce the time it takes commuters to reach Manhattan from New Jersey by several minutes.

The 8.8 mile-long fourth rail tunnel under the Hudson River will require the removal of 2 million cubic yards of rock and soil - roughly a third as much as the Hoover Dam - and will take eight years to build.

"This is an incredible project," Gov. Corzine told a crowd of 750 people at a ceremony in northern New Jersey. "In today's economic recession, it has the added value of creating 6,000 new jobs day in and day out for the next six or seven years."

The new tunnel will speed the work commute from New Jersey to New York City by increasing the number of NJ Transit passenger trains passing under the river during peak rush hour from 23 to 48.

NJ Transit currently has only one two-rail tunnel, which it shares with Amtrak. The PATH system, which operates commuter trains for the Port Authority of New York and New Jersey, has two rail tunnels, each with two rails.

The new tunnel will add two more rail lines. None of the tunnels transport rail cars carrying freight.

Federal Transit Administration chief Peter Rogoff said the federal government's $3 billion contribution to the project is the largest ever by his agency. The tunnel is expected to facilitate an exponential increase in direct routes, which would double NJ Transit's passenger capacity during the morning rush hour to 90,000 trips.

Officials estimate the project will create 6,000 construction jobs and add another 45,000 new jobs after completion in 2017.

Rogoff said the tunnel will shorten rail trips in densely populated New York City and northern New Jersey, which have some of the nation's longest commutes, and reduce the need to transfer between trains, which he said can save several minutes.

"These are the projects that transform people's lives," Rogoff said, noting that it had been almost 100 years since a new rail tunnel was built under the Hudson River. "These are the bold projects that in the past were either debated to death or just ignored."

NJ Transit had no estimate of the time savings to commuters.

The tunnel is the centerpiece of a project to expand the Penn Station transit hub in New York and fund track and signal improvements along the segment of NJ Transit's Northeast Corridor rail line between Newark and New York.

Sen. Frank Lautenberg (D., N.J.) said the project would make getting around Manhattan and North Jersey more manageable by taking cars off the road. Officials estimate it will remove 22,000 commuter vehicles from area roads and reduce greenhouse-gas emissions by 66,000 tons a year.

"We'll eliminate so many of the missed appointments, the delays in getting home and getting to work," Lautenberg said.

Critics of the project include the New Jersey chapter of the Sierra Club, which says the tunnel concept fails to meet several objectives of the original proposal. Those include giving New Jersey rail commuters direct access to Grand Central Station on Manhattan's East Side and easy access to trains running on the Long Island Railroad.