TRENTON, N.J. (AP) — Federal transit officials have reached an agreement with New Jersey, allowing the state to pay $95 million of a $271 million bill for a railroad tunnel project that Gov. Chris Christie scrapped nearly a year ago.

U.S. Transportation Secretary Ray LaHood announced the deal Friday. Federal officials say the state has five years to pay back the money.

Christie halted the Hudson River tunnel project last year because he feared taxpayers would be saddled with a potential $5 billion in cost overruns. But the state had already received $271 million in federal money to get the project started.

The Christie administration has spent more than $1 million so far to fight the bill the U.S. Department of Transportation handed the state.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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