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An arbitration panel has determined the cost to close out the last major construction contract for the Central Link light-rail project’s initial segment, Sound Transit officials said in a prepared statement.

With the decision, the total project cost is $2.32 billion, bringing the project in at $117 million below the baseline budget set in 2001, officials said.

Sound Transit contractor RCI-Herzog originally sought $137 million as part of its claim for work it performed building the 4.3-mile segment through the Rainier Valle in southeast Seattle. Last week, an independent arbitration panel awarded the contractor $66 million. Because Sound Transit already paid $17 million as part of an interim settlement, RCI-Herzog will receive $49 million from the award.

The contractor encountered “significant challenges” during construction, including finding more contaminated soil than expected, underground utility conflicts and other design issues to complete the project by the July 2009 deadline, according to the arbitration panel.