Re: CAF/Houston Metro Settlement

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eschwerin@rosemontseneca.com

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2010-12-17 23:01:41

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Hunter Biden <hbiden@rosemontseneca.com>

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Michael Muldoon <mmuldoon@rosemontseneca.com>

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Actually, on further reading it looks like CAF kept $27m of the $41m it had already been paid. Makes more sense now. Probably not a bad outcome for them.

Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
eschwerin@rosemontseneca.com
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On Dec 17, 2010, at 5:54 PM, Eric Schwerin wrote:

This is interesting. According to this article, CAF paid Houston METRO as part of the settlement. I thought CAF was going to get paid by METRO. Unless of course the contract somehow put CAF at fault. Very strange. Can't be good for Virginia and co. if this is correct.

CAF USA
Metro cancels rail car contract
12/17/2010
http://www.chron.com/disp/story.mpl/metropolitan/7344201.html
The Metropolitan Transit Authority has reached a settlement with CAF USA to cancel its two contracts related to light rail cars for its North and Southeast corridor lines.
CAF USA, a subsidiary of the Spanish company Construcciones y Auxiliar de Ferrocarriles, will refund $14 million to Metro, under the settlement approved by Metro's board this morning.
The contract cancellation brings an end to mediation between the two sides after Metro announced earlier this year that it would end the contract as part of its effort to re-qualify for $900 million in Federal Transit Authority grants to fund its light rail expansion.
The FTA put the money on hold after the agency determined Metro had violated federal Buy America rules by contracting with CAF to have rail cars built in Spain. Buy America rules require "rolling stock" for federally funded projects be produced in the United States.
The FTA's decision will delay Metro's plans to have the new light rail lines operational until 2014. Metro originally had set a 2012 launch of the expanded rail lines.
Metro has announced plans to seek new bids for rail cars next month.

Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
eschwerin@rosemontseneca.com
P Consider the environment before printing this email.

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