Train Manufacturer Sues Wisconsin Over Default on Train Contract

Monday, November 05, 2012

From a news release issued by Talgo:

On November 1, 2012, the Walker administration forced Talgo, Inc., to terminate its contract with the State of Wisconsin to build passenger trains to be used by the State for Amtrak’s Hiawatha line between Milwaukee and Chicago. Talgo has substantially completed the trains under its contract, but the State has arbitrarily decided not to put the trains in service and has refused to pay Talgo the millions of dollars that it still owes for them. Talgo has filed a lawsuit in Dane County against Governor Scott Walker and Secretary of Transportation Mark Gottlieb, asking the court to review the State’s course of conduct, determine that the State defaulted on the contract, and rule that Talgo properly terminated it.

As a result of the Walker administration’s actions, once the court rules in favor of Talgo, the State of Wisconsin will have no further rights under the contract and will lose the almost $50 million it has already spent on the project. This amount includes only part of the contracted price for the trains, the State’s payments to consultants and its investment in a Milwaukee facility for temporary maintenance work.