NEWARK, N.J. (CBSNewYork/AP) -- New Jersey Transit has approved a settlement that will pay the federal government $95 million for the Hudson River rail project that Gov. Chris Christie scrapped nearly a year ago.
The Federal Transit Administration had wanted New Jersey to repay $271 million. The money to pay the debt will come from insurance.
Christie abandoned the Hudson River ARC Tunnel project that would have included two more tunnels under the river to relieve congestion last fall, citing escalating costs and feared overruns of up to $5 billion.
Federal transportation officials say New Jersey only got the federal funds because it committed to finishing the project.
Under terms of the settlement, New Jersey must spend more than $128 million in federal funds on approved transit-related projects and cannot divert the money to other projects.
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