Spanish company's delay on rail cars may affect METRO services

Documents reveal warnings about hiring the Spanish company, and now METRO says it may need to cut service on existing line
May 7, 2014 1:22:32 PM PDT
Critics on Wednesday railed Houston METRO over taxpayer-funded rail cars that aren't ready and won't be anytime soon.

This is no small issue. METRO is months behind on a $150 million deal -- all your money. The company building the cars admits it needs a new boss on the Houston job, has to hire 100 more people and enlarge it plant, and it still can't promise a delivery date.

A brand new light rail car is sitting in Houston, built by CAF, a Spanish company. It was delivered six months late, overweight and leaking water.

For the first time, METRO revealed it is considering keeping newly built rail lines closed this fall or cutting service on the existing line because of the delay.

"It's going to have an impact. We just can't evaluate how much of an impact yet," METRO chair Gilbert Garcia said.

METRO signed a $153 million deal with CAF in September 2011. The first car was supposed to be here in July. Just weeks ago, after six months of delays, METRO finally withheld some money from the company and that seemed to get their attention.

"This is a partnership with CAF and METRO to make sure we get a quality car that meets all of our requirements and we've been pretty demanding on that, and we're going to stay demanding on that," METRO CEO Tom Lambert said.

METRO could fine the company thousands of dollars but hasn't fined them a dollar yet. That may come later; first, they need a fix for the crisis and there doesn't seem to be one.

"It's not about delivering every single vehicle, but this is really something we want to avoid," METRO board member Christof Spieler said.

Years ago, as METRO was getting in to this contract, the agency's own staff suggested this very thing could be a problem.

Confidential METRO documents show METRO staff evaluating the original deal in 2011 hinted at the possibility of future problems saying, "the facility has not significant work since 2008."

Two months later, a memo told METRO leaders, "It is not clear who is the lead on this project," CAF has not shipped any cars "in the last two years," and "the CAF timeline does not include specific dates." It concluded with, "(the other bidder) demonstrates more experience ... than CAF."

Nonetheless, CAF won.

"Who submitted the lowest bid?" METRO board member Dwight Jefferson said.

"CAF did, by some $30 million. But it still raises too many questions for agency watchdog Paul Magaziner, who sparred on Wednesday with METRO's board.

"You needed cars in three years, sir. That was the deal," Magaziner said.

He reminded board members the lowest big isn't always the mandatory or best choice.

"The car you bought wasn't even designed," Magaziner said.

Over the last several weeks we've called the Spanish company's U.S. office repeatedly. We've never heard back. In a letter to METRO, they promise to get it right.

METRO's current cars, by the way, were built by another company called Siemens. They're the ones who lost out on this deal to CAF.

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