New, unused Talgo trains in Milwaukee could find a new home in Michigan

From the Milwaukee Sentinel Journal:

Two brand new, high-speed passenger trains idling in a north side Milwaukee building that originally were manufactured for the state of Wisconsin by Spanish train-maker Talgo Inc. may soon be put to use.

Michigan’s Department of Transportation issued a request for proposals in March for ready-to-operate trains capable of 110 mph speeds for its Wolverine service between Chicago and Detroit for August delivery. While neither the agency nor Talgo would confirm the train-maker submitted a proposal, there aren’t many companies with fully built trains sitting around.

“The only modern trains available today within that short time frame are the Talgos,” said Rick Harnish, executive director of the Chicago-based Midwest High Speed Rail Association.

Harnish applauded Michigan’s move to acquire modern trains — many of the Amtrak-owned trains operating in the Midwest are aging and have problems when there’s deep snow. He called the Talgo trains “excellent” and said they would be a particularly good fit for the curvy Wolverine route because their light weight and low-slung design would allow them to navigate turns more quickly.

There could be hiccups involved in a sale. The trains are the subject of a lawsuit about who owns the trains. Even if Wisconsin can’t stop Talgo from selling the trains, the unfinished litigation could make them less attractive to a buyer.

After the state of Wisconsin commissioned the trains from Talgo in 2009 for the Hiawatha line between Chicago and Milwaukee and ultimately spent $52 million on them, Gov. Scott Walker and the Republican administration clashed with the company, canceling a maintenance contract and disputing testing costs in 2012. The state halted payments, eventually leading Talgo to end the contract.

Talgo then sued the state in Dane County Circuit Court, asking a judge to declare that it properly terminated its contract. The suit is ongoing, but if Talgo wins, it will keep the trains and the tens of millions of dollars the state already has paid the firm.

However, Lester Pines, Talgo’s attorney, said there was no dispute that Talgo owns the trains, and he expects the lawsuit to be resolved soon. The company has an obligation to try to sell the trains and mitigate its damages from the state’s alleged breach of contract, he said.

“The state breached the contract and doesn’t want the trains,” Pines said. “They’re Talgo’s trains, and Talgo is the damaged party.”

Pines said he thought the state would prefer to settle the issue.

“If Talgo can sell the trains, I think the state of Wisconsin would be happy,” he said.

The Wisconsin attorney general’s office, which represents the state in the lawsuit, had no comment. The Wisconsin Department of Transportation also had no comment regarding the lawsuits or plans for the Talgo trains.

Talgo also filed a claim in November against the state of Wisconsin with the state Claims Board for $65.9 million. The Claims Board anticipates discussing the claim April 30, with a decision to be made within 20 days afterward.

If Talgo prevails, taxpayers would pay Talgo the $65.9 million and still forfeit the trains.

Talgo is still renting half of a 300,000-square-foot building in the Century City development at N. 27th St. and W. Townsend St. that is owned by the City of Milwaukee.

The trains are completed and there are just a small number of employees left, down from dozens, said Jeff Fleming, speaking for the city’s Department of City Development.

“But the power is on, and the trains are ready to pull out of the station,” Fleming said.

Michigan’s Department of Transportation is looking for alternatives to Amtrak trains for its Wolverine service while it waits for the 2018 delivery of a new generation of passenger cars, which are being manufactured for several Midwestern states in Rochelle, Ill. Because of a change in Amtrak’s cost methodology this year, the federal government will no longer pay for the state of Michigan to use Amtrak trains on its Wolverine service. The agency’s annual costs for operating and maintaining trains on its three train routes, including the Wolverine, ballooned from $8 million to $25 million this year.

“We’re trying to find ways to continue the service at a lower operational cost and increase ridership and revenues,” Michigan DOT spokesman Nick Schirripa said.

The Wolverine service operates three times a day on the 304-mile route from Chicago to Detroit to Pontiac, Mich.