State cancels Talgo maintenance contract

James Cannon, an electrician at Talgo Inc., works to install wiring for lights in a high-speed rail car at the facility in Milwaukee recently. The state has canceled a $166 million maintenance contract with the Milwaukee-based company. (File photo by Kevin Harnack)

MADISON, Wis. (AP) – The state has canceled a $166 million maintenance contract with Talgo, causing the Spanish train manufacturer to threaten legal action.

Talgo has built two trains in Milwaukee to replace aging Amtrak-owned equipment on the Chicago-to-Milwaukee Hiawatha line. A separate deal with the state has Talgo maintaining the trains, with the state paying for a maintenance base.

But, the Legislature’s Joint Finance Committee killed funding to plan the base. In a letter to Talgo, Department of Transportation attorney Kathleen Chung said the state can no longer afford to make the payments required under the maintenance agreement and must end the deal.

Talgo executive Nora Friend tells the Journal Sentinel the state cannot back out that easily. Friend said Talgo will try to mediate the matter as a first step.

Information from: Milwaukee Journal Sentinel, http://www.jsonline.com