MTA grants Italian rail car builder more time in contract negotiations

Los Angeles County’s Metropolitan Transportation Authority board delayed a decision today on whether to hire an Italian rail manufacturer to build 100 cars needed for Metro’s light rail line extensions.
 
The delay -- the second since March -- would give MTA officials more time to work out the details of a new offer by the firm, AnsaldoBreda, for a $300-million financial guarantee on the potential 100-car contract. The company says the guarantee would ensure that they deliver the cars on time and to Metro’s specifications.
 
The decision on whether to go forward with AnsaldoBreda’s contract options or seek bids from other rail companies has been topic of intensive debate at the 13-member MTA Board for months.

Earlier this week, Metro’s new Chief Executive Art Leahy recommended declining AnsaldoBreda’s contract options for 100 additional cars, which were to expire at the end of the month. His predecessor, former Metro Chief Executive Officer Roger Snoble, made a similar recommendation after concluding that AnsaldoBreda’s performance under its current 50-car contract did not merit a new order.
 

The company, which is backed by the Los Angeles County Federation of Labor, has increased pressure on MTA board members to approve the deal by offering to build a new plant east of downtown Los Angeles with union labor if it secures the MTA contract.

And city officials have begun negotiating a ground lease with AnsaldoBreda to build the plant on a city-owned parcel that would anchor Mayor Antonio Villaraigosa’s plans for a clean technology corridor east of downtown.

The 50 cars built by AnsaldoBreda under the base MTA contract are not compatible with other cars in the Metro fleet -- a requirement that AnsaldoBreda says MTA waived -- and the cars are more than 5,000 pounds heavier than specified in the contract. The chief concern for both the former and the new Metro chief executives is that the 50th car in the base contract will be delivered three years late.
 
AnsaldoBreda Inc. President Giancarlo Fantappie told board members today that the company has put forward a proposal to reduce the weight of the cars and fix the compatibility issue.
 
A final decision by the board is expected as early as next month.

-- Maeve Reston 

Comments

[Erik]

Magazine: AnsaldoBreda is a possible bankruptcy
Wednesday, May 6, 2009

The (British) train magazine Rail Magazine reported in its May issue that bankruptcy threatens the Italian train builder AnsaldoBreda. AnsaldoBreda the Dutch high-speed, which are currently delivered to the Netherlands.

Ultimatum
The Danish Railways (DSB) threatened a claim against hundreds of millions AnsaldoBreda train builder and the end of May for the first set of IC4 trains has delivered. The IC4 trains - with a speed of 240 kilometers per hour can get - were ordered in 2000. In 2002 AnsaldoBreda promised that in 2006 all 83 trains were to be delivered. This is the year 2009 and it has not yet happened. DSB in May 2008 made an ultimatum to AnsaldoBreda: The Italian train builder gets a year to ensure that 14 trains are ready. If not, then the rest of the DSB order will be canceled. At that time AnsaldoBreda was in trouble.

(snip)

NS Hispeed
AnsaldoBreda is notorious for late deliveries. NS Hispeed, the operator for the HSL-Zuid ordered from the Italian train builder. In Dutch politics, there is much criticism with the NS Hispeed trains that AnsaldoBreda ordered. The delivery of the Dutch high-speed - called Albatros / V250 - is also not entirely successful. AnsaldoBreda gave a few years ago in an interview with Dutch newspaper NRC Handelsblad that the trains by 2010 would operate, and if that did not happen, the plant would just close its doors. Meanwhile, there is only one high-speed train delivered in the Netherlands. It is very questionable whether these trains will be delivered on time. Rail Magazine writes that there is NS Hispeed AnsaldoBreda assumes that the high speed will make up time.

Italian media
Italian media are optimistic about AnsaldoBreda, if the manufacturer is in the race for new orders. Or if really a bankruptcy likely AnsaldoBreda they are not saying, but it is clear that the plant has lost a lot of credit.

http://www.ovwereld.nl/kennisnet/materieel/nieuws/rail_magazine:_ansaldobreda_gaat_mogelijk_failliet

[mike]

so lets get this straight. they didn't come close to fufilling the origianl contract, the cars they built aren't compatable with the old cars, are significantly heavier (which with "light rail" seems like an issue) and yet they still have a chance to land the next even larger contract? and to top it off we're giving them the land to build the facility to produce the cars? i bet we basically have to use them b/c the 50 cars they made won't work with anything else. we all should expect adn demand better, the author ought to name names and hopefully build some public resentment that might actually lead to accountabilty.

[jerry]

mike, i was at the meeting and i'm pretty sure i heard that the mta said it waived the compatibility requirements, so it's not really fair to say the cars arent compatible since that wasn't part of the contract.

the real problem here seems to be METRO more than Breda. they've never been good at overseeing contracts and this is no exception. if mta keeps changing requirements, even after delivery, obviously things are going to take more time to finish.

And then, instead of accepting their own mistakes, Metro trries to blame it all on Breda and launch itself into a long procurement process that gives us more expensive cars that take even longer to build? Metro should take the option and spend that extra money on hiring competent people to administer the contract, instead of wasting it on a new bid process.

[richard schumacher]

There's not a transit agency in the world that likes Breda vehicles. Their low initial cost seduces buyers, and then they regret it for years.