Metro Settles Its Differences With Its "Buy American" Spanish Railcar-Provider

While the crowd over at the "new" Metro has worked to settle in and push its new image, one of the big things hanging over its head was possible litigation from Spanish rail car company CAF.

If you haven't followed the story: When stuff really went bad with Metro, Wilson and the Federal Transit Administration, the problems centered around CAF and a violation of federal "Buy American" rules.

(More coverage in a Houston Press cover story and Hair Balls, including our exclusive about the way the CAF contract was procured under Wilson.)

The FTA announced that the CAF contract was void, but, trouble was, Metro had already paid the Spanish company about $40 million on a $118 million contract. After Wilson resigned, new president George Greanias and new board chairman Gilbert Garcia said that they expected CAF to sue the hell out of Metro.

So it had to be good news to the new Metro, at least a little bit, when the whole thing was settled -- announced by Metro today -- with CAF agreeing to refund $14 million of the money that was already paid.

From a Metro press release:

Under the agreement, the contracts are canceled and CAF will forego any additional payments for unpaid work and lost profits.

When the FTA announced its determination, Metro's new management acted to minimize delays during settlement discussions by laying the groundwork for a new procurement process for the rail cars. Metro expects to put the cars out to bid in January.
"By avoiding costly and protracted litigation with CAF and cooperating with our partners at the FTA, we can move forward in the most fiscally responsible way," Greanias said in the press release.

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Paul Knight
Contact: Paul Knight