Late streetcar could cost manufacturer thousands

Posted at 5:33 PM, Sep 15, 2015
and last updated 2015-09-15 17:33:16-04

CINCINNATI — The first of Cincinnati’s five streetcar vehicles is set to arrive October 30, city leaders said Tuesday. As a result, the city has threatened to withhold payment from CAF USA, the firm responsible for building and delivering the city’s streetcar vehicles.

In a letter sent to CAF Tuesday, the city’s chief procurement officer, Patrick Duhaney, wrote:

[I]t is the city’s intent to exercise the full extent of its remedies under the Contract to force compliance…and hold CAF accountable for the costs of such delay… the city may withhold all or part of a payment to the extent deemed necessary by the city.

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During Tuesday’s Major Transportation and Regional Cooperation Committee meeting, project leaders gave an updated delivery schedule, showing the first vehicle will arrive nearly a month and a half after the originally agreed upon deadline of September 17.

Per the contract, the city stands to withhold as much as $1,000 in payment to CAF per day late for the first car and $500 per day late for each additional car, according to City Manager Harry Black, which could add up to over $40,000.

Duhaney’s letter was in response to an update sent late last month by CAF USA Vice President of Sales Virginia Verdeja, briefing city leaders on the manufacturer’s progress in assembling and testing the vehicles that will run along Cincinnati’s 3.6-mile electric streetcar route.

In that letter, Verdeja said, “CAF is fully aware of its commitment to deliver the streetcars and regrets having to depart from the agreed upon schedule.”

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Upon receiving CAF's update, Black hinted that the city could pursue action to recuperate damages incurred by the delay.

As a result of the delays, CAF launched a recovery plan to reduce time lost in the original schedule, including added shifts, performing some testing concurrently on multiple vehicles, allocating additional engineering resources, and resolving delivery issues with sub-contractors.

According to Project Leader John Deatrick’s monthly report to the transportation committee, the first vehicle is currently undergoing dynamic testing on a test track at CAF’s facility in Elmira, New York. The second vehicle is undergoing climate room testing, while technicians just finished assembling the third vehicle. Assembly on the fourth and fifth vehicles is currently underway.

Deatrick said the streetcar team does not anticipate the delay should impact operations activity for Transdev, Inc., the firm tapped to manage maintenance and operations for the streetcar, but did say the delay could impact construction contractors' testing schedule here in Cincinnati.

Following Verdeja’s update, Black said the streetcar team remains “cautiously optimistic” that the streetcar should still meet its projected launch date of September 2016, describing early testing as having "preliminary good results."  

Along with the arrival of Cincinnati’s first streetcar, Deatrick’s report also said the last bit of track work construction should also wrap up October 30.


Follow Pat LaFleur on Twitter (@pat_laFleur) for the latest on Cincinnati Streetcar and alternative transportation in Cincinnati and Northern Kentucky.