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METRO Cancels Contract, Gets $14 Million Refund From Rail Car Company


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The Metropolitan Transit Authority announced today that it has 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 the construction of light rail cars for its North and Southeast Corridor lines. Under the agreement, the contracts are canceled and CAF will forego any additional payments for unpaid work and lost profits. In addition, CAF will refund $14 million to METRO. The agreement was ratified by the METRO board this morning.

“This is $14 million more for public transportation than we had yesterday,” said METRO Chairman Gilbert Garcia. “More importantly, it’s another step forward from old legacy issues to the safe, reliable and affordable public transit and mobility services that our customers and taxpayers deserve.”

In September, the Federal Transportation Administration found that CAF and prior METRO management had violated federal procurement law and Buy America requirements regarding the contracts, putting $900 million of federal transportation grants for the rail lines in jeopardy. METRO’s new management ordered CAF to stop work on the rail cars and immediately swung into action to protect access to federal funds.

“We’re building a new METRO based on clear goals, measurable objectives and absolute transparency,” said METRO CEO George Greanias. “And we require our employees and vendors to meet those standards.”

METRO initiated a mediation process with CAF that took place recently, leading to the settlement announced today. Today’s settlement allows METRO to move forward quickly to protect the $900 million in federal funding for the rail lines.

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It's cute that he spins this as $14 million more for Metro, but how much was sacrificed on this contract that never should have been signed in the first place?

11 seconds of Googling turned up this KUHF article.

$41 million already paid to CAF, $14 million being returned. So, $27 million spent. $900 million that may or may not go to Metro will not have this contract working against it.

The total value of the contract with CAF was $300 million. Here's CAF's take on the situation from a couple of months ago: CAF USA calls on Houston Metro to work together to save taxpayer money, prevent delay on light rail system

A quick scan of CAF's web site shows that it makes some monumentally ugly rail cars. Houston's are the only good looking ones in the bunch:









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  • The title was changed to METRO Cancels Contract, Gets $14 Million Refund From Rail Car Company

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