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Houston's METRO Gets Money Back From Spanish Rail Car Supplier

Wednesday, February 16, 2011 - 04:33 PM

(Houston -- Wendy Siegle, KUHF News) Houston's METRO has officially received a $14 million dollar refund from the Spanish-owned rail car vendor Construcciones y Auxiliar de Ferrocarriles (CAF).

METRO had hired CAF to build 103 light rail cars for the North and Southeast rail lines. But last December METRO had to cancel the contract after the Federal Transit Administration said the $330 million dollar deal violated federal purchasing laws and Buy America rules. That has stalled $900 million dollars in federal grants. “The Federal Transit Administration made it clear that unless we terminated the CAF contract and purchased cars under a new program that they were comfortable with, we would not be eligible for the full funding grant,” said George Greanias, METRO’s president and CEO.

METRO was able to recover $14 million dollars of the $41 million it had already paid to CAF. Greanias says the money will go toward re-procuring the light rail cars. “We just issued a notice over the weekend that we’re going to be going out to take bids on rail cars," said Greanias. "And we’ve been working very closely with the Federal Transit Administration to make sure that every step in the process that we’re going through right now meets with their approval.”

Earlier this week the Obama Administration submitted its proposed budget for fiscal year 2012. It includes $200 million dollars for the North and Southeast rail lines.

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