Yes, they dug up the area between Penis-sula Plaza and Funan for quite some time. It's for building this underground tunnel.
From Funan the path forks into two, one path goes to The Adelphi mall, the other goes to Capitol Piazza which then leads you to City Hall MRT.
You must not have seen the SafeEntry gantries placed at the entrances of the malls, which were quietly removed about two months ago.