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Metro Continues Rail Car Talks, Leaving Open Option for Downtown Manufacturing Plant

By Eric Richardson
Published: Thursday, May 28, 2009, at 11:45AM
Gold Line Yard Eric Richardson []

Light rail cars sit in the Gold Line light maintenance yard in this 2007 photo.

Metro's board voted today to delay action on a $300 million contract for new light rail vehicles, opting to take time for further negotiations in light of new financial commitments by Italian rail firm AnsaldoBreda.

The contract has the potential to mean more than just rail cars. AnsaldoBreda is negotiating to lease 14 of the 20 acres at the Community Redevelopment Agency's proposed CleanTech Manufacturing Center just south of Downtown. That facility and green industry have been cornerstones of the Mayor's agenda for economic recovery.

The night before the contract was scheduled to come up for a vote, AnsaldoBreda President Giancarlo Fantappie pledged a $300 million financial guarantee that his firm would deliver working vehicles on schedule. Speaking before the board today, Fantappie reaffirmed his pledge and said that the firm has a plan to fix the issues identified by Metro.

That pledge was enough to get the board to commit more time to the issue and to fleshing out the details of what the guarantee would entail.

The rail firm's promise to build a manufacturing facility in the city of Los Angeles brought a full contingent of labor support to the Board meeting. Speakers from the International Brotherhood of Electrical Workers Chapter 11, LA & OC Building and Construction Trades Council, UAW, Piping Industry Progress and Education, Plumbers Local 78, IBW Local 11, Ironworkers Local 416 and the Los Angeles Federation of Labor all spoke in support of the contract and the local jobs it would bring.

The plant would act as a cornerstone for plans put forward by Mayor Antonio Villaraigosa. Cecilia Estolano, CEO of the city's Community Redevelopment Agency, told the board that "the vote that you have before you today is really about the future." She said that the firm would anchor the entire CleanTech corridor for this region."

After a contentious negotiation, the board instructed Metro's CEO to negotiate the financial guarantee by June 15, and voted 10-1 to extend the contract option until July 31.

The lone no vote was cast by Supervisor Michael Antonovich, who argued that the transit operator's previous problems with AnsaldoBreda demanded a competitive bid. He asked whether the financial guarantee would "provide cab fare for the people who would be riding the line" if the rail cars don't get built on time.

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Guest 1

dando guerra on May 28, 2009, at 12:56PM – #1

correct spelling is "Cecilia Estolano"


Eric Richardson () on May 28, 2009, at 01:50PM – #2

Doh. That's what I get for working from memory instead of double-checking. Thanks for the correction.


Guest 2

Kate Barner on May 31, 2009, at 06:49PM – #3

AnsaldoBreda has a past record of not complying with their contract with the LA County MTA in terms of car weight, delivery time, etc. Liquidated Damages should be in the contract if it wasn't. Otherwise the MTA should have taken legal action to enforce the contract and consider another bidder.

In terms of "pledges" to build cars in Los Angeles, this should be established with a binding legal document with a letter of credit backing it up.


Guest 3

Jake on June 02, 2009, at 11:21AM – #4

A common thread in many of the postings I have read is that people don't really know what's going on. It's always easy to blame the contractor, especially when the press simply states that the contractor, in this case AnsaldoBreda, did't comply with the contract requirements. Whether it's the wrong size seats, overweight, or in Boston the cars couldn't stay on the tracks. The problem is one needs to know both sides of the story to make a determination. Something like the size of the seats is clearly specified in a contract so why would the car builder not order the right ones since to do otherwise would result in rejection. AnsaldoBreda claims that the required seats were provided, so maybe we should investigate what the MTA asked for. In Boston, yes the Bredas derailed, but the MBTA spent millions on repairs because the track was heavily damaged by the older Kinky-Sharyo cars and the problem never corrected, not because Breda didn't build them right. Yes, they had other problems, but lets not always assume every problem originated at the same source.

In order to make informed judgements, one must first be properly informed. Judging by the broad spectrum of information, opinions and data, some substantiated most not, it would appear that most people are assuming a great deal. The first pitfall being that infromation in the press is correct and some is, but some is not.

The decision before the MTA is a simple one where none of the information/misinformation about quality, reliability, schedules, etc., matters at all. The question is whether a contract should be awarded to ANYONE simply because they are doing the city, any city, a favor. The answer is an unequivocal "No" because to do otherwise means that the people in charge can be bought; all the controls and ethics rules that are in place will mean nothing and it's a message to all contractors and vendors that it's ok to break the rules.


Guest 3

Kate Barner on June 02, 2009, at 10:28PM – #5

The MTA has a fiduciary responsibility to look out for the working class taxpayer and rider especially with the current budget and financial crisis. The MTA needs to enforce compliance with appropriate Contract Administration procedures and quality control. And most importantly they should never take a verbal promise--Any offer for public benefits such as a local factory needs to be spelled out in a binding contract with penalties if AnsaldoBreda once again reneges on their promise to the County and the City's CRA. Even without AnsaldoBreda's past poor performance as an issue, this policy should apply equally to all vendors.

As a side note, AnsaldoBreda's problems with late deliveries aren't limited to Los Angeles and Pittsburgh--Danish rail operator DSB is experiencing the same problem.


Guest 4

Kengikat on July 29, 2009, at 05:55PM – #6

"The MTA has a fiduciary responsibility to look out for the working class taxpayer and rider especially with the current budget and financial crisis."

This is very funny. MTA doesnt give a damn about its riders or the taxpayers. Have you seen the TAP card and how lousy it is. Do you even ride METRO and when I say ride I mean because you have no other choice.

MTA does not care about their riders. That was very funny Kate


Guest 3

Kate Barner on August 14, 2009, at 08:44PM – #7

Kengikat, I can't argue with logic and reason, you're not being fair.



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