Posts Tagged ‘Wisconsin Gov. Scott Walker’

Minnesota Rail Study Halted

January 9, 2018

Two Minnesota lawmakers have effectively ended an environmental study of the feasibility of high-speed passenger rail service between the Twin Cities and Milwaukee.

Rep. Paul Torkelson and Senator Scott Newman, both Republicans, and chairmen of the transportation committees in their respective chambers, objected to the Minnesota Department of Transportation accepting federal grant money for the study.

Calling it a waste of taxpayer money, the legislators said that the State of Wisconsin opposes high-speed rail.

“Minnesota should not be squandering precious tax dollars — whether local, state or federal — on a wasteful project actively opposed by other states whose support is necessary to proceed,” the legislators wrote in a letter to the commissioner of the Department of Management and Budget.

Dan Krom, director of MnDOT’s Passenger Rail Office confirmed that the study has been halted even though $1 million in state and federal funding has already been spent on it.

The Minnesota lawmakers were objecting to MnDOT spending another $181,682 being provided by the Federal Railroad Administration.

Krom said the study would have created a “framework for the environmental process moving forward and start looking at some general issues. We didn’t get to any detail; this was just the initial money to get the project started.”

More detailed studies were expected to be conducted at a later date.

Funding for the study originated in 2009 during a economic stimulus program started by the Obama Administration.

Wisconsin was to have received $810 million for a Madison-to-Milwaukee service. However, Republican Scott Walker refused the money after being elected in 2010, saying the service would be too expensive to build and maintain.

Governors in Ohio and Florida also refused rail project stimulus money and the funds were re-directed to other states.

Although Wisconsin continues to fund conventional Amtrak service between Milwaukee and Chicago, Walker continues to oppose high-speed rail service.

“It would be rather inappropriate for us to spend federal funds when there’s no chance of it going forward,” Torkelson said.

Richard Harnish, executive director of the Midwest High Speed Rail Association said it was shortsighted for Minnesota to end its study, which he called “a basic assessment” to understand what’s needed.

“It’s really just fixing the existing track so you can run things faster and more frequently,” he said.

Janice Rettman, a Ramsey County commissioner who is chair of the Minnesota High Speed Rail Commission, called ending the study regrettable.

Senator Scott Dibble, a member of the Transportation Finance and Policy Committee, called the decision unfortunate.

“Do they only want people to have cars and drive? They have a complete disregard for other modes of transportation,” he said.

Amtrak spokesman Marc Magliari  said that although faster and more-frequent trains help build ridership, reliability is the most-important attribute in luring more passengers.

MnDOT has been eying a second daily round-trip passenger train to supplement the existing Amtrak service between the Twin Cities and Chicago via Milwaukee. With funding and political support, that service could begin operation in 2022.

Torkelson contended that he does not oppose “anything that is economically viable. You need to use resources in a fashion with projects that actually have a chance of getting done.”

Amtrak’s Chicago-Seattle/Portland Empire Builder is the only rail service between Milwaukee and the Twin Cities.

Milwaukee Talgo Plant to Rebuild Transit Cars

July 18, 2017

A factory in Milwaukee built to manufacture Talgo trains has been converted into a shop to overhaul public transit cars.

The Spanish company Talgo created the facility to assemble its passive-tilt equipment that was to be used in high-speed service.

The high-speed rail program was killed by Wisconsin Gov. Scott Walker shortly after he was elected in November 2010.

The state had been granted $810 million in American Recovery and Reinvestment Act funding for two Talgo trainsets and infrastructure development.

Walker pledged during his campaign to end the project, raising objections to the state’s obligation to cover ongoing maintenance and operating costs.

The Milwaukee Talgo plant built four trainsets before it closed. Two of them are in service on Amtrak’s Cascades Service route while two others are being stored in Amtrak’s Beech Grove shops near Indianapolis.

The stored Talgos were intended to be used in Wisconsin, but never turned a wheel there in revenue service.

The former Wisconsin Talgo trainsets might be sent to California for use between Los Angeles and San Diego if a service plan by the LOSSAN Rail Corridor Agency is implemented.

In the wake of Wisconsin’s refusal to accept the two Talgo trainsets, the manufacturer sued the state. That litigation was eventually settled out of court with Talgo receiving a $10 million settlement and the right to sell the completed trainsets.

Talgo’s Milwaukee plant is now being used to rebuild transit cars used on the Los Angeles Metro Red Line and built between 1992 and 2000 by Breda Costruzioni Ferroviasrie of Italy.

The car will receive updates to their propulsion equipment, braking, signaling, and other components under a contract worth nearly $73 million.
The Talgo plant is located on the city’s north side in a former A.O. Smith factory, which built automobile frames.

The Los Angeles rebuilding project is expected to create 18 to 20 new jobs.

Talgo, Wisconsin Settle Contract Lawsuit

August 20, 2015

Wisconsin and Talgo, Inc., have reached a $9.7 million settlement of the Spanish rail equipment builder’s lawsuit over a canceled contract.

The state has agreed to pay Talgo to end the dispute, which began when current Gov. Scott Walker voided a contract for two Talgo trainsets.

As part of the agreement, Talgo will retain title to the two train sets it built for Wisconsin, but which have yet to be used in revenue service.

The equipment was originally intended to be used on Amtrak’s Hiawatha route between Chicago and Milwaukee and on a never-developed route between Milwaukee and Madison, Wisconsin.

“The state signed contracts with Talgo and then absolutely walked away from that,” said Lester Pines, an attorney for Talgo. “(Talgo) didn’t like this litigation and it’s happy it’s over. They’re not in the business of suing people.”

The Talgo trains were built under terms of a 2009 contract negotiated by former Gov. Jim Doyle.

After Walker voided the contract, Talgo filed suit in November 2012, naming Walker and Transportation Secretary Mark Gottlieb.

In May 2014, a state arbitration board rejected Talgo’s financial claims against the state.

The two completed trains are now in storage at Amtrak’s Beech Grove, Indiana, heavy maintenance facility.

There have been reports that the state of Michigan has expressed interest in acquiring or leasing the Talgos for use on state-funded routes.

Talgo Train Sets to be Moved to Beech Grove

May 19, 2014

No date has been set for the move of two Talgo trains from Milwaukee to the Amtrak shops at Beech Grove, Ind.

The Talgo equipment was built for the State of Wisconsin, but that state no longer wants the train sets.

The date of the move is still being worked out, Talgo spokeswoman Nora Friend said. Talgo will pay for the move and pay Amtrak a storage fee.

The two Talgo 14-car train sets were originally purchased by Wisconsin for Chicago-Milwaukee-Madison Hiawatha Service, but Gov. Scott Walker rejected $810 million of federal stimulus funds and canceled the project after he was elected in 2010.

Talgo has filed a breach of contract claim against the state. Talgo expects its $69.5 million claim against the state of Wisconsin filed with the state claims board to be rejected.

The company will then be free to pursue the damages in court, Friend said. The board has until early next week to issue a decision.

“The reason for the move is to mitigate Talgo’s damages in light of the state of Wisconsin’s breach of the purchase contract for the trains,” Friend said. The state has already paid $52 million for the trains.

Michigan’s Department of Transportation has issued two requests for proposals for 110 mph-capable passenger cars or complete train sets to replace two of the three Amtrak consists currently running on the Chicago-Detroit (Pontiac) route.

Michigan DOT has confirmed that Talgo has been the only respondent for its request for proposals and that the agency expects to make a decision about whether to go forward with the proposal in four to five weeks.

Talgo Files Claim With Wisconsin for $66 Million

November 9, 2013

Talgo Inc. is suing the state of Wisconsin over its decision to refuse to accept two train sets that it ordered and which were built in Milwaukee.

The $66 million claim was filed on Thursday with the Wisconsin Claims Board and alleges that Republican Gov. Scott Walker acted in bad faith.

The claim is likely to lead to litigation and revive discussion about Walker’s controversial decision shortly after he took office in early 2011 to turn down a $810 million federal grant to pay to upgrade Amtrak’s Chicago-Milwaukee Hiawatha Service corridor to higher speed rail as well as conduct development work for Milwaukee-Madison service. Eventually, the Madison route was expected to be extended to Minneapolis and St. Paul, Minn.

A spokeswoman for the state Department of Justice declined to comment, but Republican Assembly Speaker Robin Vos said the state did nothing wrong in backing out of the deal with Talgo.

“My understanding is we followed all the rules that were required,” Vos said. “There were no bad faith negotiations.”

Vos said that the Talgo contract included a provision voiding the deal if lawmakers didn’t provide money for the trains in the state budget. He said Republicans used that clause and refused to hand over the remaining money for what they saw as a bad deal. “There’s an ‘out’ in the contract,” Vos said.

However, Talgo’s claim asserts that the state improperly invoked that provision. “Wisconsin’s purported funding shortfall was deliberately staged by Gov. Walker and the DOT in an effort to evade the state’s contractual commitments to Talgo,” the claims states.

If the Claims Board agrees with Talgo, the Republican-controlled legislature and Walker would also have to sign off on the decision, which observers say is unlikely to happen. If Talgo’s claim is rejected, the Seattle-based company could sue the state.
Wisconsin signed a deal in 2009 with then-Gov. Jim Doyle, a Democrat, to purchase at least two train sets from Talgo.

The train sets were to be assigned to Amtrak’s Hiawatha service and later used on the Madison route.

The state also agreed to a 20-year maintenance agreement to service the trains. That pact also included a maintenance facility and the option to purchase two additional train sets.
Walker made no effort to hide his disdain for the rail project during his 2010 campaign.
Nonetheless, Talgo continued to build the trains after Walker took office and notified the state in January 2012 the train sets were ready for delivery.

The Wisconsin Department of Transportation refused to accept them. After an unsuccessful attempt at mediation in November 2012, Talgo filed a lawsuit in Dane County Circuit Court, asking Judge Juan Colas to declare that Talgo had the right to terminate the contract and take ownership of the train sets, which have sat in storage since their completion.

Talgo’s latest claim is in addition to the lawsuit that it filed in November 2012.

If it prevails in its 2012 lawsuit, Talgo would keep the train sets and the $42 million the state has paid for them. Talgo says it is owed another $10 million on top of what it has already been paid. If Talgo is able to keep the train sets, it will sell them to another state, the company’s attorney said.

In its $65.9 million claim filing with the Claims Board, Talgo also argues that Wisconsin owes bond holders an additional $70 million because it borrowed that much for the two mothballed train sets but never took possession of them.

“If the Talgo’s reasoning is correct, taxpayers would have to pay Talgo $65.9 million and immediately refund $70 million to bond holders rather than paying that sum off over the coming years,” wrote Patrick Marley in the Milwaukee Journal Sentinel.

“The state, acting through the DOT, bears the responsibility for its lack of any attempt to negotiate prior to termination,” the claim says.

The transportation department has not had a chance to review the complaint, says agency spokeswoman Peg Schmitt, adding that it has worked to honor terms of the original contract.

Talgo’s $65.9 million claim includes $18.6 million in unpaid invoices and interest, $23.5 million in lost business, $10.5 million in damage caused by state officials “continually defaming” Talgo’s reputation, and $9.8 million in lost maintenance work. The remainder covers an array of other costs, such as for insurance and legal work.

Part of the dispute revolves around whether the state or Talgo is responsible for the cost to test the trains. Talgo maintains the state invented the disagreement over testing as a ruse to claim a breach in the contract.

Its filing includes an email from Transportation Secretary Mark Gottlieb to Walker’s office in February 2011 discussing attempts to sell the trains to other states.

Talgo’s claim contends the Wisconsin DOT recognized that it needed to pay for testing—and tried to come up with a way to pay for it without seeking more money from the legislature. WisDOT proposed advancing money to Talgo under its maintenance agreement so the firm could use the funds to pay for testing. That way it appeared Talgo, rather than the state, was paying for testing.

WisDOT spokeswoman Peg Schmitt said in a statement the state incurred $52 million in costs—most of which has gone to Talgo—for the trains. The trains have not been turned over to the state, do not meet specifications, and are not compliant with the federal Americans with Disabilities Act, Schmitt said. ‘We’re waiting for delivery of completed trains that will provide the state with ownership of an asset for which public dollars were used,” Schmitt said in her statement.