Talgo seeks nearly $66M for canceled deal

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By SCOTT BAUER
Associated Press

MADISON, Wis. (AP) – Train-maker Talgo Inc. filed a nearly $66 million claim against Wisconsin on Thursday, saying the money is owed after Gov. Scott Walker acted in bad faith in deciding to abandon a high-speed rail line connecting Milwaukee and Madison.

The Seattle-based arm of the Spanish train company made the filing with the Wisconsin Claims Board. A spokeswoman for the state Department of Justice had no comment.

If the Claims Board were to agree with Talgo, the Republican-controlled Legislature and Walker would also have to sign off, something unlikely to happen. If the claim is rejected, Talgo could take its case to court.

Republican Assembly Speaker Robin Vos said the state did nothing wrong in backing out of the deal.

“My understanding is we followed all the rules that were required,” Vos said. “There were no bad faith negotiations.”

The state signed a deal in 2009 under then-Gov. Jim Doyle, a Democrat, to purchase at least two train sets from Talgo, which were initially to be used on Amtrak’s existing line between Milwaukee and Chicago before being used on the new line that had yet to be built.

The state also entered into a separate 20-year maintenance agreement to service the trains, a deal to provide a maintenance facility, along with an option to purchase two additional train sets.

Walker, a Republican, made his opposition of the high-speed rail line, and the $810 million in federal stimulus money to pay for it, a major part of his campaign for governor in 2010. Upon winning election, Walker rejected the federal funding, killing the project.

Even so, Talgo continued working on building the train sets the state purchased at a facility in Milwaukee throughout 2011. In January 2012, Talgo notified the state the train sets were ready for delivery, but the Wisconsin Department of Transportation refused to accept them. In November 2012, Talgo canceled its purchase contract with the state.

The claim alleges the state failed to live up to its purchase agreement and that Walker repeatedly acted in bad faith to frustrate the deal.

“The state, acting through the DOT, bears the responsibility for its lack of any attempt to negotiate prior to termination,” the claim said.

The Transportation Department has not had a chance to review the complaint, said agency spokeswoman Peg Schmitt, adding that it has worked to honor terms of the original contract.

Talgo said its claim includes insurance expenses, labor expenses, attorneys’ fees, transportation costs, and “loss of reputation associated with the state’s personnel continually defaming Talgo’s professional reputation in every conceivable forum.”