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'L.A. TRANSIT DISPUTE'

 
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Mr. Linsky
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Joined: 16 Apr 2007
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Location: BRENTWOOD, CA. - WOODMERE, N.Y.

PostPosted: Thu Feb 12, 2009 5:56 pm    Post subject: 'L.A. TRANSIT DISPUTE' Reply with quote

'From Transit Dispute, a Broader Battle'


ByMICHAEL JANOFSKY
Published: February 11, 2009 New York Times


LOS ANGELES — A growing dispute between Los Angeles transit officials and a light rail car manufacturer is showing how hard it can be to stimulate a sagging economy even when money is available.

The Los Angeles transit authority says it will open bidding on the 100 light rail cars it considered buying from AnsaldoBreda.

Despite $40 billion for transportation spending approved by county voters in November and new federal support for public works programs, staff officials at the Los Angeles County Metropolitan Transit Authority, known as Metro, say they plan to open bidding on 100 new light rail cars they were considering buying from AnsaldoBreda, an Italian company.

The bidding is needed, the officials say, because of delivery delays on 50 other cars Breda is building, at a cost to Metro of $3.2 million each, and potential compatibility problems between Breda’s cars and those made by two other companies, Siemens, based in Germany, and Sumitomo, whose headquarters is in Japan.

But Breda executives counter that the delays were caused by Metro’s change orders and that the decision to open bidding was influenced by a Metro official whose son works for Siemens.

Breda executives also say Metro’s decision will end plans for building the company’s new American headquarters as well as a manufacturing plant in South Los Angeles. Breda, which assembles light rail cars in Pittsburg, Calif., has a pending deal with a contractor to build the new facility.

Breda, which has manufactured light rail cars for San Francisco, Cleveland, Washington and other cities, says the plant would create thousands of jobs at a time they are badly needed. California’s unemployment rate is approaching 10 percent. In addition, the state’s population has grown by 8.5 percent since 2000, according to the Census Bureau, and traffic throughout Los Angeles is the most congested in the country. Last November voters passed a transportation ballot initiative that provided a path forward, with new and expanded roads, subways and light rail, all financed by a half-cent sales tax increase.

Mayor Antonio Villaraigosa of Los Angeles, who is Metro’s chairman, is committed to a “full and thorough hearing” of Breda’s offer before a final decision is reached, said his spokesman, Matt Szabo. “The hundreds of new jobs would provide exactly the kind of boost the local economy needs right now,” Mr. Szabo said.

Metro’s 12-member board could vote to overrule the staff decision at its meeting on Feb. 26.

Metro’s general manager for rail operations, Mike Cannell, said in an interview that the system needs 119 new cars by 2017 and that 69 cars now operating need to be overhauled starting next year. The authority had planned to sign a contract with Breda for the work, but Metro officials informed the company on Jan. 8 that the agency is “best served” by open bidding for new cars.

“Local voters will be paying for the cost to purchase new rail vehicles and infrastructure,” Metro said in a statement. “We need to make sure they get the best price, performance and delivery.”

In a letter to the authority, Breda’s president, Giancarlo Fantappie, questioned the decision, citing public statements by Metro praising his company’s product and performance. He also argued that a delay would affect projects that could help with economic recovery, including the proposed Breda plant in South Los Angeles.

Mr. Cannell said it was only after receiving Mr. Fantappie’s letter that he learned of “rumors of any manufacturing plant.”

Breda’s vice president of operations, Francisco Cantatore, said Mr. Cannell called the day after receiving the letter to tell Breda it has “no chance” of getting the new contract.

“He was very upset,” Mr. Cantatore said in an interview. “He said we shouldn’t even bother trying anymore.”

Breda’s director of government affairs, Fabio Ficano, said Metro’s decision was influenced by Mr. Cannell’s connection to one of Breda’s competitors, Siemens, which employs his son. “Taxpayers will undoubtedly share our company’s alarm,” Mr. Ficano said.

Mr. Cannell called Mr. Cantatore’s assertion “absolutely false.” He said his son works for Siemens Energy, “which has nothing to do” with its light rail car division.

Breda executives maintain that a round of bidding would add as much as $15 million to the cost of a contract for the new and refurbished cars.

In a letter to the board last Friday, Mr. Fantappie told members for the first time about the manufacturing plant Breda hopes to build here and as many as 5,000 temporary and permanent jobs he estimates it would generate.

Photo for New York Times by Albano Guatti

Mr. Linsky - Green Bus Lines, Inc., Jamaica, NY

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