AnsaldoBreda deal falls apart *

Villaraigosa:

In these tough economic times, it was important to make every effort to bring good jobs to LA and simultaneously exercise due diligence to protect public funds in pursuing this contract.

Unfortunately after months of negotiations, at the last minute satisfactory financial guarantees were not provided and the deal was not signed.

We will continue to work to see that rail cars can be built in LA using local funds to reap the job and environmental benefits that a manufacturing plant can bring to the region."

AnsaldoBreda release:

AnsaldoBreda agreed to provide financial guarantees that included an Irrevocable Letter of Credit, a Performance Bond and a Parent Company Guarantee totaling a value well above that of the contract. However, AnsaldoBreda, in accordance with Company policy, required to restate the provision of the original contract, contemplating a cap on the liquidated damages. Therefore AnsaldoBreda proposed a solution which specified a cap for maximum delays and stated that if the threshold of the cap was ever reached, MTA could terminate the contract for reasons of default and avail itself of the above mentioned guarantees which would cover the total value of the contract. Unfortunately, on this last point, despite multiple efforts to negotiate in good faith on both sides, no agreement was reached. AnsaldoBreda would like to thank Mr. Leahy and the staff of MTA for the trust extended to them and for the dedication demonstrated in trying to reach a positive conclusion. Despite this turn of events, Los Angeles continues to represent a focal point for our strategy in America.