Wisconsin to pay $9.75M in settlement over halted rail project

The state of Wisconsin has settled a lawsuit with train manufacturer Talgo.

The settlement ends an nearly three-year legal battle between Talgo and Wisconsin.

August 20 Wisconsin has agreed to pay train maker Talgo $9.7 million to settle a lawsuit stemming from a decision by Governor Scott Walker to drop a plan to use its cars on a passenger rail line between Milwaukee and Chicago, an attorney said on Thursday.

Talgo’s attorneys on Wednesday filed a court document asking a Dane County Circuit Court judge to dismiss the case.

After being elected, Walker, a Republican who campaigned against high-speed rail, rejected $810 million in federal stimulus money to pay for new lines inWisconsin.

“Talgo has definitely not been made whole by this settlement”, Pines said. It the company sells the trains for at least $32.5 million, the state would recover the cost of the settlement. They remain in storage in northern Indiana, Pines said.

“It doesn’t make any sense financially for the state to have done this, but they did it because they don’t like trains and they don’t like the fact that it was a deal done by the prior administration” Pines said. Depending on the final sale price, the state can collect up to $9.75 million, which represents its final payment owed to Talgo under the manufacturing contract. Second, the Walker administration and GOP lawmakers waited more than a year to go back on the state’s order with Talgo for the Milwaukee-Chicago train sets, allowing the company’s work on the trains to progress even further, Pines said.

“The state has an opportunity to recoup some of what it is paying in the settlement”, Pines said. At the time, Walker’s Department of Transportation said that vote meant the state would not be able to put the trains into service. Those two were intended to run on the Amtrak Hiawatha route between Milwaukee and Chicago.

At the time, however, then state Rep. Jon Richards (D-Milwaukee), an attorney and budget committee member, said the Joint Finance action was inviting a lawsuit for breach of contract and was “completely foolhardy and irresponsible”.