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METRO Gets $14 Million From Spanish Rail Car Company


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METRO RECEIVES REFUND FROM SPANISH RAIL CAR VENDOR

METRO has received a $14 million dollar refund from CAF, the Spanish rail car vendor.

Last December, the agency reached a settlement with CAF USA, Inc. (a subsidiary of the Spanish firm Construcciones y Auxiliar de Ferrocarriles, S.A.) over two disputed contracts for construction of light-rail vehicles for METRO’s North and Southeast lines.

“I want to thank CAF for the professional way in which they handled this process,” said METRO Chairman Gilbert Garcia. “These funds will help carry out the NEW METRO’s goals of delivering first-class transit services to our deserving customers. This is $14 million we can put toward our rail cars.

Under that agreement, the contracts were canceled and CAF relinquished claim to any additional payments for unpaid work and lost profits – this, in addition to the $14 million refund.

The Federal Transportation Administration (FTA) ruled last September that CAF and previous METRO management violated federal procurement law and Buy America requirements for the purchase of the rail cars. In order to move forward to secure the $900 million Full Funding Grant Agreement, the FTA said METRO must rebid the contract and follow its procurement process, including full compliance with the Buy America requirements.

NEW METRO management acted quickly, restructuring the agency’s procurement process, which is currently under FTA review.

“This underscores the progress made by the NEW METRO” said METRO’s President & CEO George Greanias. “From the beginning our focus has been, and will be, to create a stronger foundation for the agency based on clear goals, measurable objectives and transparency. We’re raising the bar.”

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METRO RECEIVES REFUND FROM SPANISH RAIL CAR VENDOR

METRO has received a $14 million dollar refund from CAF, the Spanish rail car vendor.

Last December, the agency reached a settlement with CAF USA, Inc. (a subsidiary of the Spanish firm Construcciones y Auxiliar de Ferrocarriles, S.A.) over two disputed contracts for construction of light-rail vehicles for METRO’s North and Southeast lines.

“I want to thank CAF for the professional way in which they handled this process,” said METRO Chairman Gilbert Garcia. “These funds will help carry out the NEW METRO’s goals of delivering first-class transit services to our deserving customers. This is $14 million we can put toward our rail cars.

Under that agreement, the contracts were canceled and CAF relinquished claim to any additional payments for unpaid work and lost profits – this, in addition to the $14 million refund.

The Federal Transportation Administration (FTA) ruled last September that CAF and previous METRO management violated federal procurement law and Buy America requirements for the purchase of the rail cars. In order to move forward to secure the $900 million Full Funding Grant Agreement, the FTA said METRO must rebid the contract and follow its procurement process, including full compliance with the Buy America requirements.

NEW METRO management acted quickly, restructuring the agency’s procurement process, which is currently under FTA review.

“This underscores the progress made by the NEW METRO” said METRO’s President & CEO George Greanias. “From the beginning our focus has been, and will be, to create a stronger foundation for the agency based on clear goals, measurable objectives and transparency. We’re raising the bar.”

Good news, I guess - but how much did METRO pay CAF to begin with? Was it only $14 million?

I cannot believe they cancelled such a lucrative contract without some compensation. How much did METRO lose on this deal?

Edited by dbigtex56
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editor's post is from the METRO blog, a "house organ" in the truest sense of the word and utterly unreliable, thus the positive spin on METRO's outrageous squandering of $168 MILLION taxpayer dollars since 2006 that "New" METRO is about to write off because Greanias says the money has been spent and there are ZERO assets to show for it. (And who knows how many more $ millions Frank Wilson and his Board wasted in the 3 years before that?)

$42 MILLION of that went to CAF as partial payment for the illegal rail car procurement plan. You may remember we got ZERO CAF rail cars and the Feds shut down the $900 million LRT grant. CAF sent back $14 MILLION of the already-paid $42 MILLION.

So what METRO meant to say is - CAF KEPT $28 MILLION of Houstonians' tax dollars and METRO got ZERO assets for that money, but at least CAF let METRO off the hook for $14 MILLION cash and no further billing or lawsuit.

If you want to know what METRO is up to, the only Houston journalist turning over the rocks is Mike Reed at the Examiner. Here is a link to his article from last Saturday (the Chron finally reported this outrage today)

http://www.yourhoust...1cc4c002e0.html

Edited by IHB2
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What do we have to do to get those buffoons out of there and held accountable? We need to do this NOW.

Isn't that one of the first thing the mayor did when she went into office. I wish George G. success in untangling Metro's mess.

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(Sigh.) Yes. As is TXDOT and the Pentagon. Yet, no one seems to hold these agencies to the same level of scrutiny.

At least TxDOT and the Pentagon have assets to show for their expenditures of vast amts of tax $.

My point is that METRO is trying to spin $14 million it thought it had squandered but got back as a positive, when it has NO assets to show for spending $168 million tax $ ($182 million if you count the 14 mil they got back) since 2006. It has not layed 1 FOOT of LRT track even though we are now approaching the original promise date for opening the 1st new line.

Greanias is forced to make this writeoff now b/c METRO has engaged in Enron-style accounting in addition to the graft and corrupt dealing already exposed, and the feds started the dominos falling when they found out about the illegal CAF contract.

METRO cannot go out for bond $ it has to have with a bogus balance sheet. METRO has to find a way to get bond $ at something less than a usurious rate b/c it does not have the $, and its projections say it won't have for the foreseeable future, to build the $3-4 BILLION LRT lines it promised in 2003.

METRO has been "rogue" in almost every way a govt agency can be for a decade or more. It demands the highest possible level of public scrutiny.

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editor's post is from the METRO blog,

No, the post is from a Metro press release e-mailed to me, as is clearly stated in the thread title's subhead. I always note in the subhead when it's a copy of a press release from Metro, or any other organization.

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At least TxDOT and the Pentagon have assets to show for their expenditures of vast amts of tax $.

What assets does TxDOT have that Metro doesn't have a similar inventory of? TxDOT has freeways. Metro has streets. Both agencies have trucks and personnel. I guess Metro has trains, while TxDOT has hundreds of "Don't Mess With Texas" signs with bullet holes in them, surrounded by trash.

You're not happy that Metro got $14 million back on a bad deal. Would you prefer that Metro got zero back? Perfection is not the enemy of good.

I can't tell if you hate Metro, or if you're an employee of CAF, but you certainly seem to have a heck of a large axe to grind.

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(Sigh.) Yes. As is TXDOT and the Pentagon. Yet, no one seems to hold these agencies to the same level of scrutiny.

can you add public education to this?

hell, every government run agency.

What assets does TxDOT have that Metro doesn't have a similar inventory of? TxDOT has freeways. Metro has streets. Both agencies have trucks and personnel. I guess Metro has trains, while TxDOT has hundreds of "Don't Mess With Texas" signs with bullet holes in them, surrounded by trash.

I thought the streets were state as well?

Regardless, they have a lot of land, bus farms, administration offices, etc.

At least TxDOT and the Pentagon have assets to show for their expenditures of vast amts of tax $.

My point is that METRO is trying to spin $14 million it thought it had squandered but got back as a positive, when it has NO assets to show for spending $168 million tax $ ($182 million if you count the 14 mil they got back) since 2006. It has not layed 1 FOOT of LRT track even though we are now approaching the original promise date for opening the 1st new line.

I think you have to be honest here, the $168 (that I am aware of) was not all given to CAF. I thought I read it was something like $50 million?

Maybe METRO spent $168 million so far on planning, and things like that, and hell, there's lots of dirt that's been turned, just drive down any of the streets that the LRT is being built on, at least the east and south east lines.

Edited by samagon
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Most of these write off appear to be from the time that David Wulffe was the Chairman and Frank Wilson the CEO. How they could not do a better job of due diligence on the rail car contract is just amazing unless you factor pure political crony-ism and/or corruption into it. I'm pretty ambivalent about Parker overall but I think she has done the right thing by getting Greanias into Metro and starting the clean up. I wish them well.

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editor- my apologies, the METRO blog post is a slightly longer version of the press release you posted using most of the same paragraphs.

editor- my point is not that METRO has no assets, b/c it certainly has vast assets, but that Greanias says his predecessor and that Board oversaw the spending of $168 million that METRO "cannot connect to anything we have of value."

I guess if my outrage at METRO's fiscal malfeasance under Wilson and Wolff since 2006 is "an axe to grind" so be it. I'm glad you can be sanguine about waste on that scale in a tight economy, but maybe you don't live here.

samagon - I said in my 1st post that $42 million was paid to CAF. CAF gave back $14 mil of that in the settlement. And wasn't the 1st to say that METRO squandered the $168 million and has nothing to show for it - George Greanias said that 1st.

the breakdown of the whole $168 million writeoff, with Greanias's comments is here:

http://www.yourhoustonnews.com/west_university/news/article_0cb6c2c4-3c74-11e0-90d8-001cc4c002e0.html

Greanias's comments for the record don't try to spin anything positive about getting $14 million back.

Greanias is without doubt the brightest ray of hope for METRO in years, but he's faced with an almost impossible task in trying to fund the 5 LRT lines in an era of declining system-wide ridership, reduced tax revenues, and the feds cutting back transit dollars.

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At least TxDOT and the Pentagon have assets to show for their expenditures of vast amts of tax $.

The Pentagram "missed" 2.32 trillion as per Rumsfeld's announcement 9-10-11. http://www.youtube.com/watch?v=-qtv_yt_E60&feature=related

The accounting offices at the Pentagon were hit by something the next day so I guess we'll never know the full story.. <_<

At least the Spaniards gave the money back.

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The Pentagram "missed" 2.32 trillion as per Rumsfeld's announcement 9-10-11.

Forgive me if I've misunderstood your statement - but isn't '9-10-11' several months in the future?

edit: the Pentagram? Is this a Satanic reference?

Edited by dbigtex56
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http://www.chron.com/disp/story.mpl/metropolitan/7445303.html

Metro will take delivery of 19 new rail cars for its Main Street line in late 2012 from an unlikely source — Utah.

Metro, along with San Diego's transit agency, has piggybacked on a contract the Utah Transit Authority negotiated with rail car manufacturer Siemens.

Edited by Highway6
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http://www.chron.com...an/7445303.html

Metro will take delivery of 19 new rail cars for its Main Street line in late 2012 from an unlikely source — Utah.

Metro, along with San Diego's transit agency, has piggybacked on a contract the Utah Transit Authority negotiated with rail car manufacturer Siemens.

Good for Metro to help out Utah, I just hope that they can match the capacity that the CAF cars offered. Either way, the additional cars are needed pretty badly. Particularly during football and Rodeo season.

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This is news to me. Please elaborate.

this is the link to METRO's Ridership figures for FY2010-FY2011. The METRO site has the #s back several years as well, but this is easy to interpret - just go to pages 4,5,6 and look at the FY10 &FY11 comparison numbers. They are not my numbers, they are METRO's

http://www.ridemetro.org/News/Documents/pdfs/Ridership%20Reports/0111_Ridership_Report_FY08-FY11.pdf

my point in the post is that Greanias has few options to raise the kind of money METRO needs to make good on its 2003 promises to taxpayers. the farebox take is headed the wrong direction to be of any help to financing system improvements.

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Forgive me if I've misunderstood your statement - but isn't '9-10-11' several months in the future?

edit: the Pentagram? Is this a Satanic reference?

This post has been edited by Editor to remove off-topic content. Please keep this thread on topic, or it will be closed.

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These writeoffs represent spending that was misguided but I fail to see how anything could be considered criminal. Corporations write off investments that don't pan out all the time, it's just not as public. Everyone agrees that METRO shouldn't have been paying for detailed plans for an intermodal facility they don't have the means to build, but that decision wasn't criminal.

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These writeoffs represent spending that was misguided but I fail to see how anything could be considered criminal. Corporations write off investments that don't pan out all the time, it's just not as public. Everyone agrees that METRO shouldn't have been paying for detailed plans for an intermodal facility they don't have the means to build, but that decision wasn't criminal.

Article 6.03(d) of the Texas Penal Code states, “A person acts with criminal negligence, or is criminally negligent, with respect to circumstances surrounding his conduct or the result of his conduct when he ought to be aware of a substantial and unjustifiable risk that the circumstances exist or the result will occur. The risk must be of such a nature and degree that the failure to perceive it constitutes a gross deviation from the standard of care that an ordinary person would exercise under all the circumstances as viewed from the actor’s standpoint”

If everyone agrees that METRO shouldn't have been paying for detailed plans for an intermodal facility that they couldn't have built, that would seem to be tempting criminality.

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These writeoffs represent spending that was misguided but I fail to see how anything could be considered criminal. Corporations write off investments that don't pan out all the time, it's just not as public. Everyone agrees that METRO shouldn't have been paying for detailed plans for an intermodal facility they don't have the means to build, but that decision wasn't criminal.

you can't compare METRO investments to a private sector corporation. METRO is writing off public money, a completely different animal than risking private money.

don't think there's any proof of criminality except for the CAF procurement process, which the feds found violated federal law - something a bit more than "misguided" from a publicly-funded agency.

and there's clearly been some Enron-style accounting to overstate assets in the past according to Greanias - that's possible fraud.

you've got to commend Greanias and the new board for trying to clean up the mess they inherited, but Wilson, the previous board, and a number of the METRO bureaucrats still there really hamstrung the agency for the next several years.

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The UTA has ordered the same Siemans S70 LRV's that are currently used by METRO. Siemens Breaks Its Own Record for Largest Light Rail Vehicle Order

The only real complaint I have with the current LRVs is the color; not so much for aesthetic reasons, but for safety's sake. That silver-gray color makes the train blend in with its surroundings, especially at dusk and dawn.

A vehicle which weighs several tons, traveling at a good clip and incapable of stopping on a dime shouldn't be camouflaged. Perhaps some of the accidents which plagued the light rail in its early years could have been avoided if a more visible color had been selected.

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The only real complaint I have with the current LRVs is the color; not so much for aesthetic reasons, but for safety's sake. That silver-gray color makes the train blend in with its surroundings, especially at dusk and dawn.

A vehicle which weighs several tons, traveling at a good clip and incapable of stopping on a dime shouldn't be camouflaged. Perhaps some of the accidents which plagued the light rail in its early years could have been avoided if a more visible color had been selected.

indeed, the red stop think train really brings attention to this! (pun intended?)

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This post has been edited by Editor to remove off-topic content. Please keep this thread on topic, or it will be closed.

So back to Metro, the same analysis needs to be used? Were there kickbacks involved or simply extreme incompetence? Will there be an investigation or cliched statments like, "we need to move on" etc.?

As people, we need to not fight with one another, but rather share facts and discuss reality, not beliefs and see who is working for the people and who is working against the people. One indicator of that is who is giving true information to the people and who is keeping that information from the people.
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This post has been edited by Editor to remove off-topic content. Please keep this thread on topic, or it will be closed.

I'm just disappointed that people are so quick to jump on the conspiracy bandwagon.

I'm more in line of extreme incompetence as far as METRO is concerned. Personally, I'd like a way for METRO to get it's full share of the taxes instead of spreading the wealth of sorts.
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I hope this aspect of it doesn't come with the new trains:

Ramp-2-500x332.jpg

Does this mean they're a bit "taller" or are their stations that low? Talk about a lousy design in either case.

New York subways have a similar contraption that folds out from under the rail car to bridge gaps in places where the platform is on a curve.

Chicago also has curved platforms, but people there just have to jump. Unless you're in a wheelchair, in which case one of the station attendants and the train driver will manually put a ramp in place for you. It delays the entire system, but considering that the CTA is the antithesis of automation, and using design specifications from the 1800's, it's probably the easiest way.

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I was on the tail end of a double train the other morning. The train did not pull up far enough at Bell station and if someone had needed to get off, they would have had to jump. The back of the second train was litterally in the crosswalk. A disabled person would have never been able to exit. Ooops, I guess the engineer forgot they had a double load, but he/she seemed to remember at the other stations that we stopped.

On another note, there is still activity at the intermodal site. I guess we can keep our fingers crossed that something will be done there, even if on a smaller scale.

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I was on the tail end of a double train the other morning. The train did not pull up far enough at Bell station and if someone had needed to get off, they would have had to jump. The back of the second train was litterally in the crosswalk. A disabled person would have never been able to exit. Ooops, I guess the engineer forgot they had a double load, but he/she seemed to remember at the other stations that we stopped.

On another note, there is still activity at the intermodal site. I guess we can keep our fingers crossed that something will be done there, even if on a smaller scale.

I saw the same thing. If METRO has dropped the plans for that site... then... who in the world is doing all that work?

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  • The title was changed to METRO Gets $14 Million From Spanish Rail Car Company

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