SANDPOINT - The 9th U.S. Circuit Court of Appeals issued an order Wednesday lifting an injunction holding up construction of the Highway 95 bypass

"We're going to work," said Barbara Babic, spokeswoman for the Idaho Transportation Department.

The federal appeals court did not specify in its order why it is lifting the injunction, which halted progress on the proposed Sand Creek Byway.

"A decision explaining the court's reasoning will follow in due course," the order said.

The order comes just two days after three circuit judges heard oral argument on the North Idaho Community Action Network's appeal of U.S. District Court Judge Edward Lodge's decision to throw out the group's lawsuit against the U.S. Department of Transportation and ITD.

"It's a sad day for Sandpoint and a sad day for the environment," said Teree Taylor, NICAN's president.

"It's a shame that we're destroying the waterfront to put up a freeway."

Although the ruling is a significant win for the embattled proposal to re-route U.S. 95, the fight is anything but over.

"We're not throwing in the towel," said Taylor.

NICAN can petition the 9th for a rehearing and also has a lawsuit pending in Idaho's federal court which challenges the U.S. Army Corps of Engineers' approval of the bypass.

 Sandpoint developer and marina owner Ralph Sletager, meantime, is challenging an Idaho Department of Lands permit for the project in Bonner County's district court.

Sletager was not available for comment and a phone message was not immediately returned on Wednesday.

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Karl Vogt, an Idaho deputy attorney general who serves as ITD's lead counsel, also could not be reached for comment and messages left at his office were not immediately returned.

NICAN sued state and federal highway officials in 2005, alleging the $98 million project was subjected to a substandard environmental review. Lodge rejected the suit on March 27, clearing the way for NICAN's appeal to the 9th circuit.

NICAN argued the bypass analysis failed to adequately address the effects on the historic Sandpoint Depot or take into account the three other projects which would bookend the bypass. The other projects which make up the Sandpoint North & South plan address the highway between Sagle and Sandpoint, and Sandpoint and Ponderay.

The group also maintained, among other things, that the effects of dredging in Sand Creek lacked proper analysis, as did a proposal to install a tunnel instead of building bypass.

"We believe we did a good job and we believed that all along. And the court confirmed it," said Babic.

Babic said construction agreements with RCI Parsons of Sumner, Wash., were signed on Wednesday afternoon and a pre-construction meeting is pending. Work could start within the next two weeks, although Babic said construction could start sooner than that.