Talgo sues state of Wisconsin over train contract

Talgo Inc. has sued the state of Wisconsin, claiming it defaulted on a contract and has not paid for two trains.

The lawsuit was anticipated after legislators last spring refused to build a long-term maintenance facility for the manufacturer’s trains.

Under a contract between Wisconsin and Talgo, the state was to build a maintenance facility to service two trains Talgo built for the Hiawatha route between Milwaukee and Chicago. The Wisconsin Joint Committee on Finance in March voted against spending money for the facility. The Spanish manufacturer is claiming the state defaulted on its contract.

Talgo on Nov. 2 filed a lawsuit in Dane County Circuit Court against Gov. Scott Walker and Mark Gottlieb, Wisconsin Department of Transportation secretary, according to state records. Talgo officials were in discussions with the Wisconsin Department of Transportation, and in September said they wanted to avoid a lawsuit over the situation.

The state has not paid Talgo $4.6 million that the company had requested in April, and has refused to conduct tests on trains that Talgo completed, according to the lawsuit. Talgo in July claimed the state was in default of its contract, and on Nov. 1 the company terminated the contract. There was a dispute over which should pay to test the trains, a required step before they could be put into service, according to court documents.

In a July 5 letter to Gottlieb, the company claimed the state is in default of the contract over the testing dispute and for refusing to build the maintenance facility. In a Nov. 1 letter to Gottlieb, Talgo claims it has no obligation to deliver the two trains to the state of Wisconsin, but is to be paid for them.

Talgo chief executive officer Antonio Perez issued a printed statement criticizing Wisconsin officials.

“I don’t see how any company would in the future choose to do business with the state of Wisconsin when the state has shown that it cannot be trusted to honor contracts that it signed,” he said. “Talgo has become the innocent victim of a political agenda.”

Wisconsin Department of Transportation officials were not immediately available for comment.

The Spanish manufacturer set up operations in Milwaukee after the state signed a contract to buy four trains. Two train sets were built, and the state canceled orders for the other two when the high-speed rail project between Milwaukee and Madison was canceled.

Talgo’s Milwaukee manufacturing operations have since wound down, but a maintenance facility offered the opportunity to keep the company operating in the city.

Source : BisJournal

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