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Train manufacturer Talgo sues Wisconsin

Published On: Nov 05 2012 03:23:04 PM CST   Updated On: Nov 05 2012 03:25:07 PM CST

MADISON, Wis. -

Train manufacturer Talgo, Inc., filed a lawsuit Friday in Dane County against Gov. Scott Walker and Wisconsin Secretary of Transportation Mark Gottlieb claiming that the state defaulted its legal obligations under its contract with Talgo.

Talgo said the Walker administration on Thursday forced the company to terminate its contract with the state of Wisconsin to build passenger trains to be used by the state for Amtrak's Hiawatha line between Milwaukee and Chicago.

In a news release, Talgo said it has completed the trains under its contract, "but the state has arbitrarily decided not to put the trains in service and has refused to pay Talgo the millions of dollars that it still owes for them."

Talgo said that as a result of the Walker administration's actions, once the court rules in favor of Talgo, the state of Wisconsin will have no further rights under the contract and will lose the almost $50 million it has already spent on the project.

This amount includes only part of the contracted price for the trains, the state's payments to consultants and its investment in a Milwaukee facility for temporary maintenance work, according to the news release.

Talgo said it gave the state of Wisconsin "ample opportunity to avoid this catastrophic loss of taxpayer funds."

Talgo CEO Antonio Perez released a statement regarding Talgo's termination of the contract.

"We invested in the state of Wisconsin by building a manufacturing facility in Milwaukee and creating manufacturing jobs. We built the trains and otherwise performed our obligations under our agreements with the State of Wisconsin. In return, rather than being 'open for business,' the state used every conceivable excuse, whether fair or not and whether lawful or not, to ensure that Talgo did not receive what it bargained for, including by refusing to pay for the trains that Talgo completed. I don't see how any company would in the future choose to do business with the State of Wisconsin when the state has shown that it cannot be trusted to honor contracts that it signed," Perez said in the statement. 

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