City 'deeply frustrated' with streetcar builder

The company building Cincinnati's streetcar vehicles is not providing answers for its expected delay – and the city is threatening legal action if the manufacturer doesn't live up to its contract.

CAF USA Vice President Virginia Verdeja has not yet responded to a sternly worded letter from the city last Thursday. She also has not returned multiple messages from The Enquirer seeking comment about a production delay that could end up pushing back the service start date of the streetcar.

"The city is extremely concerned about the projected delay," according to the letter obtained by The Enquirer.

Patrick Duhaney, the city's chief procurement officer, goes on to write the city is "deeply frustrated" about only recently finding out about the delay.

It was publicly revealed early last week that CAF USA would blow its Sept. 17 deadline for delivering the first of five streetcar vehicles to run on the Downtown and Over-the-Rhine route. The delay not only could push back the scheduled Sept. 15, 2016, opening of the streetcar, it also could lead to cost overruns on the project, according to city officials.

CAF USA is under contract for nearly $21 million. The company, which is building the streetcar vehicles in Elmira Heights, New York, is to pay a $1,000 fine for every day delivery of the first rail car is late.

Here are other excerpts from the 1 1/2-page letter:

• "To underscore the seriousness of the situation and to put CAF on notice: the city of Cincinnati intends to take all steps necessary to hold CAF to its contractual obligations and without compromising construction quality."

• "Delays to vehicle delivery will also have adverse effects on other Cincinnati streetcar contracts including, but not limited to, the streetcar operator contract, the city's civil construction contract and the city's contract for inspection and engineering support during vehicle production."

• "CAF has not provided the city with assurances that, as required under the contract, CAF is 'making every effort to mitigate the delay and to maintain the contract schedule.' "

• "The city expects to see evidence that CAF is making 'every effort' to remedy this situation."

• "It is deeply frustrating ... that CAF did not alert the city sooner to the potential for missing such a major contract milestone. I hope that CAF takes this opportunity to demonstrate its commitment to its customers by immediately dedicating the resources necessary to get this project back on track."

CAF USA has had some trouble in testing the first streetcar vehicle, and the company has changed its project manager working on the Cincinnati contract. The city's streetcar leaders say they hope to have more information by the end of the month about whether CAF USA's delay will force the service start date to be pushed back.

Last week, City Councilwoman Amy Murray called CAF USA's late notice of the delay "unacceptable." Streetcar Project Executive John Deatrick told City Council that consultants raised concern about a potential CAF USA delay in April.

CAF USA, a subsidiary of Spain-based rail-vehicle manufacturer Construcciones y Auxiliar de Ferrocarriles, is experiencing "teething problems," one city official said. CAF USA is 3-for-3 in delays on its major U.S. contracts. The company also has experienced months-long delays on the delivery of rail vehicles to the city of Houston and Amtrak.

The Cincinnati delay also could have an impact on when CAF USA finishes another major project. CAF USA plans to use the same design for Kansas City's streetcar vehicles as the company is using for Cincinnati's project.

Read the letter: