A contract with Los Angeles for 50 cars runs into numerous complaints and issues
POSTED: 1:30 a.m. HST, Mar 23, 2011
The Italian-based parent company of the contractor that will build Honolulu’s rail transit cars has a flawed history in other jurisdictions.
AnsaldoBreda and Ansaldo STS make up Ansaldo Honolulu, a joint venture company formed last year. The two companies have worked on projects in Copenhagen, Denmark; Taipei; and Riyadh, Saudi Arabia.
In Los Angeles, AnsaldoBreda won a contract in 2003 to deliver 50 light-rail vehicles by June 2007.
But only 19 of the vehicles were delivered by January 2009, according to a letter from former Los Angeles County Metropolitan Transportation Authority Chief Executive Officer Roger Snoble to the authority’s board.
“Furthermore, the vehicle is 5,000 to 6,000 pounds overweight,” Snoble wrote in 2009. “It consumes more energy because of the weight and design flaws. Any potential of regenerative energy placed back in the electric grid from braking … is offset by the extra energy consumed due to the excessive weight of the vehicle.”
Lorenzo Reffreger, vice president of sales and marketing for AnsaldoBreda, told the Star-Advertiser that problems occurred when the L.A. transit authority went through two management changes and the new officials changed product specifications.
The problems were resolved, and AnsaldoBreda will soon deliver the last of the 50 rail cars to fulfill the contract, he said.
“The customer is very happy, and no claims have been made against AnsaldoBreda,” Reffreger said from San Francisco.
Honolulu officials were aware of the concerns with AnsaldoBreda’s Los Angeles contract, said city Rapid Transit Division spokeswoman Jeanne Mariani-Belding.
“The contract went through a rigorous review and evaluation process, and the selection was in line with the state’s best-value procurement process,” she said. “Ansaldo Honolulu was selected based on several criteria and numerous quality components, including technical solutions, management approach, schedule and time, key personnel and experience, project support and price realism.”
The Rapid Transit Division, which in July will become the Honolulu Authority for Rapid Transportation, will have oversight over the rail contracts.
Of the three bidders for the contract, Ansaldo Honolulu’s $574 million price tag was the cheapest. Bombardier Transportation submitted a $697.3 proposal, and a consortium led by Sumitomo Corp. of America offered a $688.8 million proposal.
AnsaldoBreda was poised in 2009 to win a $300 million contract to build 100 light-rail cars through an option with the Los Angeles authority.
Los Angeles transit officials and AnsaldoBreda had met to discuss technical discrepancies, including overweight conditions, train line compatibility, seat width and other “unresolved contract items, including various disputed changes, requests for waivers and Metro claims,” according to a January 2010 LACMTA operations committee memo.
Negotiations on the contract continued through October. AnsaldoBreda also apparently promised to build a $70 million factory, according to a Los Angeles 2009 report.
AnsaldoBreda agreed to rework the existing cars to correct the train line compatibility and seat width, but could only commit to reduce, not correct, the weight problem.
Arthur Leahy, current chief executive officer of LACMTA, recommended to the board in letters dated July and September 2009 that it not exercise the option to award the contract to AnsaldoBreda.
“AnsaldoBreda has not complied with the requirements for the base contract,” Leahy wrote in July 2009. “Furthermore, AnsaldoBreda has not provided sufficient assurances that they will be able to remedy the base cars and provide option cars in accordance with contract specifications.”
Leahy recommended that the board put the contract out to bid.
LACMTA board Vice Chairman Michael Antonovich, also a Los Angeles County supervisor, had called for the authority to terminate the Breda option and to seek a new request for proposals.
“With seven extensions, Breda failed to delivered the rail cars as promised, and those that were delivered were 6,000 pounds overweight and lacked sufficient interior space,” Antonovich said in a March 2009 statement.
However, negotiations fell through “for financial and other reasons,” and AnsaldoBreda decided at the last minute not to continue with the contract. The Los Angeles Times reported that the company raised new issues, including a cap on daily penalties for delivering rail cars behind schedule.
Antonovich at the time called it a “victory for taxpayers.”
“We knew the emperor had no clothes, but Los Angeles city insiders and special interests attempted to ram through a substandard outfit, creating costly delays in the MTA’s ability to seek a legitimate firm to build rail cars,” he said.
Reffreger said one factor in Los Angeles’ decision to not exercise its option to buy 100 additional rail cars from AnsaldoBreda was that L.A. decided to buy fewer cars and issued a new request for proposals.
He said each contract entails building rail cars to custom specifications and that “every single (rail) car builder in the world … has issues with delays in deliveries. That is the nature of the industry.”
Danish train operating company DSB also said AnsaldoBreda had been behind schedule, delivering eight of 14 trains in 2009, “but only three are operational, and all still have problems,” according to a March 2009 report in The Copenhagen Post.
However, Copenhagen’s Metro, which utilizes Ansaldo STS cars, was voted the world’s best metro system during the MetroRail 2008 conference, according to Copenhagen’s official tourism website, visitcopenhagen.com.
Eugenio Dotta, Ansaldo STS senior vice president for sales and business development, told the Star-Advertiser from Istanbul, Turkey, “The trains have been delivered. They are now in full operation. There was a problem in coupling two sets of trains, and it has been overcome. The trains are now working.”
Reffreger said: “If AnsaldoBreda was so bad, we wouldn’t be in Milan, Rome, Riyadh, San Francisco, Miami, Los Angeles.
“The Copenhagen system is one of the best systems in the world, and we are modeling our Honolulu system on the Copenhagen system.”
Ansaldo Honolulu will build 80 rail cars for Honolulu. Its proposal states each car will weigh 72,000 pounds. Each train will consist of two cars that will seat up to 72 people, with enough standing room for 318 people.
Honolulu’s contract award comes at a time when two key federal officials are on island to discuss the project. U.S. Secretary of Transportation Ray LaHood and Federal Transit Administration Administrator Peter Rogoff will be meeting with Mayor Peter Carlisle, Gov. Neil Abercrombie and U.S. Sen. Daniel Inouye today.