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PUERTO RICO: Negotiations continue over Urban Train
The San Juan Star | Thursday, September 12, 2002 | BY J.A. DEL ROSARIO

Posted on 09/14/2002 4:12:20 PM PDT by 4Freedom

Urban Train-related negotiations between Siemens Transportation Partnership and the Highway Authority have stretched out for a second day.

Representatives from both parties have been meeting since Tuesday in the Urban Train's offices in Hato Rey to settle on how much money the government will pay the German company to have the first phase of the train fully operational by September 2003.

The government is hoping that a 2003 completion date will help it secure $400 million in federal funds to add new routes to the electric train system.

A source close to Siemens said both parties have agreed on $70 million to $75 million, but the wording of the contract remains a point of contention. The sum is a fraction of the $150 million Siemens claims the government owes it.

"Construction contracts have a lot of performance clauses," the source said. "You can have the right amount, but if the wording in the contract is not right, you will never collect your money."

Performance clauses are standard ways of linking payment to construction deadlines.

Contract disputes already have caused legal battles between the two camps.

In August, Siemens filed a lawsuit against the Highway Authority alleging that it failed to pay a $2 million performance clause fulfilled by the company.

The clause involved unveiling the Urban Train cart in 1999 and having the Las Lomas-Torrimar route ready by December 1999. Although the company did not meet these deadlines due to delays caused by hurricanes, the lawsuit claims the government agreed to pay the $2 million after discounting some delay days.

According to the lawsuit, in 2000 the Highway Authority informed Siemens that it would not pay the $2 million, causing a rift between the parties.

Siemens is the Urban Train's main contractor. The company is building the rails, train carts, electrical infrastructure and two train stations. In addition, it will manage the operation of the Urban Train system for the first five years. Siemens' original contract with the government was worth $500 million.

Highway Authority Executive Director Fernando Fagundo has said that his agency and Siemens have "agreed to come to an agreement," committing them to fruitful negotiation.

The Urban Train was originally scheduled for completion in November 2001. Delays, cost overruns and faulty construction pushed the completion date back and ballooned the project's cost from $1.2 billion to $2.1 billion.

TOPICS: News/Current Events
KEYWORDS: costoverruns; costsdouble; dollarssquandered; mismanagement; morewaste; offederalfunds; ustaxpayers; votebuying; windfall
This is great!

The ungrateful residents of Puerto Rico that want to throw the U.S. Navy out get an 'Urban Train'.

A German contractor gets the lion's share of the U.S. Taxpayer's money.

The American Taxpayers get the bill for $2.1 billion instead of $1.2 billion and maybe put on the hook for another $400 million that will "balloon" to $600 or $800 million more.

Ain't pandering for Puerto Rican votes great?

1 posted on 09/14/2002 4:12:20 PM PDT by 4Freedom
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