The tunnel was first dug through during WWII as part of the military project. For years it was used by train only. To cross the tunnel by car, you drove your car up the train and remained seated in your car while the train took you to the other side and you drove off; a lengthy but unique experience that's no more.
In year 2000 the tunnel was widened and paved to allow both train and car on the same lane (of course not at the same time). Since the tunnel is one-lane only, each direction waits for their 15-min turn. The project was to bring visitors straight from Anchorage to Whittier to tour Prince William Sound.
The photo shows the tunnel building on the Whittier side. It's shaped to sustain avalanche.
The town is REALLY small but quite charming. You can find a lot of tours visiting Prince William Sound as well as other entertaining activities.