A day after being fired by Capital Metro, Veolia Transportation is firing back. The contractor hired by the transit agency to start and operate the MetroRail commuter line sent this response to yesterday’s events:
Veolia Transportation
OFFICIAL STATEMENT:
Yesterday, December 9, Capital Metro notified Veolia Transportation Services that it was terminating for the convenience of Capital Metro the contract it has held with Veolia Transportation since July 2007. This notice came as a complete surprise to Veolia Transportation and contradicted all indications from Capital Metro that it was working on contract modifications calling for Veolia Transportation to undertake completion of signaling infrastructure that, up to this point in time in the project, had been the responsibility of other contractors managed by Capital Metro.
Yesterday, Capital Metro announced that during these contract negotiations, Veolia Transportation demanded changes to the terms of the existing contract as a condition for completing the remaining work,” and that Capital Metro “could not agree to these changes because they would have exposed the Authority and the community to additional costs and risks.”
This statement is untrue. At no time has Veolia Transportation demanded changes to the terms of the existing contract “as a condition for completing its work.” Veolia Transportation’s start up work has been completed for many months. Delays in the opening of revenue service have resulted from the inability of Capital Metro and the signal contractors managed by Capital Metro to finish the design and implementation of the signaling and grade crossing systems – infrastructure for which Veolia Transportation has had no contractual responsibility. Veolia Transportation’s responsibilities have always been to operate and maintain the commuter rail system once it is delivered to Veolia Transportation by Capital Metro as a fully working railroad.
Capital Metro asked Veolia Transportation to assume responsibility for completion of the remaining signal work, which Veolia Transportation was prepared to do, but at the same time wanted Veolia Transportation to assume all liabilities for that system, beyond Veolia Transportation’s proposed scope of work, including potential defects in the design and construction of that system. We believed we were working with Capital Metro to resolve this issue when this announcement was made.
A second issue cited by Capital Metro spokespersons yesterday involved insurance coverage for the system. This issue, which was close to resolution when the announcement was made, is being used to divert attention away from more serious issues that involve delays in the opening of revenue service. Discussions were held with Capital Metro’s risk manager as far back as last June and again as recently as November 20 regarding the insurance required of Veolia Transportation on behalf of Capital Metro. Veolia Transportation has been working with Capital Metro in recent weeks to obtain for Capital Metro insurances it apparently did not have to protect Capital Metro for its sole negligence and the liability of third parties other than Veolia Transportation. At no time has Veolia Transportation lacked the insurances required under the contract and at no time has Capital Metro been dropped from those coverages.
Until yesterday’s announcement, Veolia Transportation had been engaged in negotiations with Capital Metro to resolve all outstanding issues, none of which were at an impasse. Indications now are that Capital Metro had been planning this action for days if not weeks before this announcement, and had secretly approached Veolia Transportation employees and contractors about working for Capital Metro and its replacement contractor in the days before notification of its intentions.
Veolia Transportation has been a strong, loyal partner to Capital Metro for over two years and has repeatedly gone well beyond its contractual obligations to assist Capital Metro in issues involved in its startup delays – this, despite the fact that Capital Metro has not paid Veolia Transportation its startup management fees since March 2009. In addition, we have repeatedly brought in additional resources to assist Capital Metro in areas over which Veolia Transportation has had no contractual responsibility and have carried significant operating costs many months beyond the original startup date without additional compensation from Capital Metro. A project that was supposed to be a “light rail project” has over time evolved into a railroad project under the regulation of the Federal Railroad Administration, placing more significant demands upon the system for compliance and, most importantly, for its safe operation. Apparently, Capital Metro has made the decision that it can meet those demands and operate the system with less resources than Veolia Transportation believes are needed.
Veolia Transportation only wants what is best for the citizens of Austin, who are entitled to the safest, most cost-effective system possible. Veolia Transportation is intensely disappointed in the decision made by Capital Metro and the manner in which it was made. Issues critical to the opening of the rail system and its safe operation are not resolved by blaming those not responsible for those issues or by attempting to divert public scrutiny from those who are.
This article appears in December 4 • 2009.