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MTA chief urges new bids to build and refurbish light-rail cars

It is the third time he has asked the agency's board to start over and reject contract options with an Italian rail firm whose cars are considered too heavy and are three years late.

September 24, 2009|Maeve Reston

With more than 100 light-rail cars needed to expand lines around Los Angeles County, the Metropolitan Transportation Authority's chief executive has recommended -- for the third time -- that the agency's board seek new competitive bids to build the cars and refurbish others in the fleet.

In a memo this week, Art Leahy advised board members to reject contract options with Italian rail firm AnsaldoBreda, which is manufacturing 50 cars for the MTA under its base contract and has options to build 100 more cars.

The board has delayed a final decision for months -- with some members torn between labor unions backing AnsaldoBreda and transit agency aides who say the cars are 6,000 pounds too heavy and three years late. Leahy recommended against ordering more work from the Italian company before the board meetings in May and July, but agreed to continue negotiating.

AnsaldoBreda officials have said the weight issues and delays in delivering rail cars stemmed from MTA-ordered changes. They have offered to build a rail plant in downtown Los Angeles staffed by union labor if the agency exercises the contract options.

Los Angeles County Federation of Labor officials say some 970 workers could be hired to construct the plant if the board approves the $300-million deal.

The company could employ at least 661 people full time in Los Angeles if it were manufacturing 75 cars and refurbishing 36 annually, according to a study by the Los Angeles County Economic Development Corp. that was commissioned by the labor federation. In a letter Wednesday, labor federation head Maria Elena Durazo urged the board to "demonstrate forceful leadership in this fight for good jobs."

Leahy, however, wrote that AnsaldoBreda's "commitments have not been satisfactory in all areas." Under the existing contract, a $300-million performance bond is required.

Leahy said AnsaldoBreda has offered a $250-million performance bond and a $50-million letter of credit for the new deal. AnsaldoBreda's attorney said the firm is actually offering an irrevocable letter of credit in $50-million increments up to a cap of $300 million.

Leahy added that the Metro Rail staff still has concerns about AnsaldoBreda's plans to fix the weight of the cars.

In addition, he said, AnsaldoBreda has not confirmed the $2.9-million price of each car. If the board decides to seek new bids, the firm could submit an offer in that process, he said.

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maeve.reston@latimes.com

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