To improve the public transportation in Singapore, the government has decided to construct the Circle Line

(CCL), a mass rapid transit (MRT) project comprising many stations in the central region of the country.

This is a huge infrastructural project and involves digging and pounding in the residential areas, resulting in noise, dust, and traffic congestion in the vicinity. Many residents have complained to the construction company that the project has led to pollution and inconvenienced them. Explain what type of externality has occurred and why the Coase Theorem is unable to rectify this issue.