Talgo Files Claim Against State
State would have to pay $136 million for canceling train contract.
As Patrick Marley and the Milwaukee Journal Sentinel reported today, the U.S. arm of the Spanish train-maker Talgo has filed a $65.9 million claim against the state, “setting up a likely lawsuit and reviving debate over Gov. Scott Walker‘s rejection of $810 million in federal stimulus money for a high-speed rail line.”
Talgo’s $65.9 million claim against the state Department of Transportation includes $18.6 million in unpaid invoices and interest, $23.5 million in lost business, $10.5 million in damage caused by state officials “continually defaming” Talgo’s reputation and $9.8 million in lost maintenance work.
If Talgo was successful in its suit, taxpayers would have to pay Talgo $65.9 million “and immediately refund $70 million to bond holders rather than paying that sum off over the coming years,” Marley writes.
Talgo has filed this claim with the Wisconsin Claims Board. “If the Claims Board were to agree with Talgo,” writes Scott Bauer for the Associated Press, “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.”
In short this dispute is likely to take some time to settle.
Though Gov. Walker put an end to the high-speed rail plan for Chicago to the Twin Cities via Milwaukee and Madison, Walker made it clear he would honor the state contract with Talgo for the Hiawatha line from Chicago to Milwaukee. “Gov Walker called us,” Friend recalls. “He said I am a supporter of the Hiawatha Project. I have no issue with it.”
But the Walker administration was painted into a corner on this issue by Republicans on the Legislature’s Joint Finance Committee, who wanted no part of any contract with Talgo.
The result was a colossal waste of government spending. In Wisconsin, the state signed a July 15, 2009 contract to pay $47.5 million to purchase two trains, and a December 30, 2009, contract to pay Talgo $4 million annually for 20 years for maintenance of the trains. To help attract Talgo’s plant to Milwaukee, the city spent nearly $11 million and state invested another $3.5 million to upgrade the 82-acre site Talgo still occupies.
If Talgo is successful with its suit, the bill for taxpayers would rise much higher.
Update 3:25 p.m. November 8: A new story by the Washington Post portrays Wisconsin as the classic example of how Republican governors like Scott Walker help defeat — in many areas of the country — President Barack Obama‘s vision for a network of high speed rail in America. The story also offers opposing takes on the issue from Walker and Milwaukee Mayor Tom Barrett.
- Eyes on Milwaukee: Why Talgo Stays in Milwaukee - Jeramey Jannene - Sep 12th, 2019
- Eyes on Milwaukee: Talgo Lands $139 Million Contract - Jeramey Jannene - May 14th, 2019
- Eyes on Milwaukee: New Locomotives for Amtrak - Jeramey Jannene - Sep 1st, 2017
- The Return of Talgo - Graham Kilmer - Jul 17th, 2017
- Plenty of Horne: Welcome Back, Talgo USA! - Michael Horne - Nov 25th, 2016
- Eyes on Milwaukee: Talgo Coming Back to Milwaukee - Jeramey Jannene - Sep 26th, 2016
- Op-Ed: Walker’s High Speed Folly - Spencer Black - May 26th, 2016
- Murphy’s Law: The Twisted Tale of Talgo - Bruce Murphy - Aug 25th, 2015
- The Last Train from Talgo - Bruce Murphy - May 29th, 2014
- Back in the News: Michigan May Get Talgo Trains - Bruce Murphy - Apr 14th, 2014
Read more about History of Talgo in Milwaukee here