Settlement no consolation as Talgo still steamed at derailing of Wisconsin train deal

August 20, 2015

Talgo Inc. will keep two train sets under its settlement with the state of Wisconsin but, until the company finds a new buyer in a difficult market, they are more a liability than a prize.

The trains were built in Milwaukee and originally intended to run on Amtrak’s Hiawatha line between the city and Chicago. The trains were never put into use after Wisconsin officials declined to build a maintenance facility to put them in operation, and are in storage in northern Indiana. As part of the agreement to settle a lawsuit Talgo filed against Wisconsin, the company will get to keep the trains.

However, finding a buyer will not be easy, said Nora Friend, Talgo vice president of public affairs and business development.

“We have been trying for three years already and we will continue trying,” she said. “It’s a liability. We have to maintain the trains to keep them like new. We have to insure them. We have to store them.”

The company will recover money when it sells them, but the pool of buyers is limited. Prospects include the roughly 36 states that are involved in passenger rail, Amtrak and private rail operators, Friend said.

Another challenge is the difficulty of using federal money to buy them. The state of Wisconsin used its own money to pay Talgo for the trains, so they were not built following the federal government’s Buy America requirements, Friend said. Because of that, it would require a waiver to buy them using federal money, she said, and states have limited resources in their own coffers.

Read Milwaukee Business Journal reporter Sean Ryan’s full story by clicking here.

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