Wisconsin will pay a Spanish manufacturer almost $10-million to settle a lawsuit over high-speed trains.
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“(Talgo) didn’t like this litigation and it’s happy it’s over”, Pines said.
In 2012, the Walker administration told Talgo it was refusing to build a maintenance facility for the train maker in Milwaukee, canceled a maintenance contract with the company and told Talgo it did not want the newly built trainsets. If the manufacturer is able to sell the trains, it will return 30% of the net proceeds of the sale, up to a limit of $9.7 million, to Wisconsin. The settlement ends a dispute over ownership of the trains, with Talgo keeping the titles and receiving $9.75 million from the state to close the contract, according to company attorney Lester Pines. The trains were to initially be used on Amtrak’s existing Hiawatha line before being used on a new Milwaukee-to-Chicago line that had yet to be built.
First, Talgo had priced the train sets lower to account for a 20-year maintenance contract on the trains that the state also broke.
Wisconsin also had the option of purchasing trains to create a passenger rail route between Milwaukee and Madison using $810 million in federal stimulus money.
Although the case hasn’t been formally dismissed in Dane County Circuit Court, the agreement between the two parties has been signed and the stipulations for the case to be dismissed are expected to be filed Thursday morning, Pines said.
The likelihood of Talgo selling the trains within three years remains unclear.
A trial date had been set for December had the state and Talgo not reached a settlement.
“The state has an opportunity to recoup some of what it is paying in the settlement”, Pines said.
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At the time, however, then state Rep. Jon Richards (D-Milwaukee), an attorney and budget committee member, said the Joint Finance action was inviting a lawsuit for breach of contract and was “completely foolhardy and irresponsible”.
