Siemens AG (USOTC:SIEGY)
Historical Stock Chart
3 Months : From Mar 2019 to Jun 2019
By Joseph De Avila
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 16, 2019).
Delays to the installation of a safety system across New York's commuter rail lines continue to mount, drawing anger from several Metropolitan Transportation Authority board members.
MTA officials on Monday reported that hardware setbacks first discussed by the authority's board in February have grown worse. Several MTA board members said the performance by the contractors hired to install the safety system for Metro-North Railroad and the Long Island Rail Road was unacceptable.
"I find it egregious that we are still talking about delays," board member Kevin Law said during the board's meeting.
Bombardier Inc. and Siemens AG were awarded a joint contract totaling $428 million in 2013 to install the safety system. Officials from both companies told the board Monday they were addressing the problems.
Congress mandated the installation of the safety system across passenger and freight railroads in 2008 following several train crashes. The system can track and automatically slow or stop a train that is speeding or that is on the wrong track. The mandate originally called for systems to be installed by 2015, but most railroads were unable to get it done by then. The deadline was later pushed to 2020.
Deborah Chin, an MTA official who oversees the safety system's implementation, told the board that despite hardware and software delays, she still expects to have the safety program in place by 2020. The MTA has sent in quality-control inspectors to monitor progress in Siemens's manufacturing facility, she said.
Board member Lawrence Schwartz suggested the MTA cancel the contract for the safety system and seek other companies to finish the job.
"I have no trust and no confidence that they know what they are doing," Mr. Schwartz said. "We shouldn't be doing any more business with them."
The MTA board, separately, indefinitely shelved two unrelated contracts for Siemens due to the delays.
John Paljug, president of Siemens Mobility, Mobility Management North America, told the board that the company is fixing the problems.
"We want to express our concern also and our commitment to getting this project done and getting our problems resolved," Mr. Paljug said. "It has the highest priority within Siemens."
The company said in a statement that it was working with the MTA to address the matter and is adding more staffers and project management to meet deadlines.
Ronald Birkelbach, head of the rail-control-solutions division of Bombardier for the Americas, said the project was more challenging than originally anticipated.
"Introducing an innovative, interoperable set of integrated technologies to two of the largest and most complex commuter railroads in the country is particularly challenging," a spokeswoman for Bombardier said. "Nevertheless, we have recognized and addressed these challenges, and continue to optimize our processes and resources."
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(END) Dow Jones Newswires
April 16, 2019 02:47 ET (06:47 GMT)
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