Long Beach factory plan may founder on railcar pact delay: $200 million contract may hinge on gaining state aid.

A $200-million government contract for light-rail passenger cars, awarded last July to a partnership headed by Siemens Duewag Corp., has been stalled by funding problems -- possibly jeopardizing Siemens' plans to open a rail car shell manufacturing facility in Long Beach, and leading to a situation in which the contract may hinge on a proposal to transfer state funds into it.

The Los Angeles County Metropolitan Transportation Authority decided last July to award the coveted L.A. Standard Car contract to a partnership of Sacramento-based Siemens Duewag, TRW Inc. and AAI Corp. But four months later the contract remains to be signed because of MTA budget problems, said Laurence Weldon, MTA manager of the vehicle acquisition project.

Weldon said attorneys have advised the MTA not to sign a contract until funding is secure. So the MTA has turned to the California Transportation Commission to find out if state funds could be transferred to the rail car contract.

Meanwhile, Siemens Duewag has been unable to sign a lease for warehouse space in Long Beach, where the company had pledged to employ close to 100 people in manufacturing jobs.

"We have no contract (with the MTA). We have to protect our interest and not commit major funds," said Siemens Duewag President Gunter Ernst. "We would certainly appreciate things moving along. We could (soon) have problems keeping the partners together. It's a little discouraging."

Also unknown is whether the MTA will contract with Siemens Duewag for the full 74 to 87 cars that the company originally bid to manufacture. Weldon said it is possible that, because of funding problems, the MTA may seek a contract for far fewer cars.

Ernst said cutting the number of cars would probably affect the unit price.

Robert Chung, deputy director for mass transportation at the CTC, said the commission is scheduled to decide the issue of the funding shift in mid-December. Hearings have been scheduled in Sacramento for Nov. 10, before the CTC's Railway Committee, and Nov. 16-17 before the full CTC, he said.

According to Chung, the MTA staff is seeking to shift money from the Metrolink commuter rail budget -- which is presided over by the Southern California Regional Rail Authority, a five-county body -- and from the San Fernando Valley rail line project to the rail car contract.

Linda Bohlinger, deputy executive officer for capital planning at the MTA, explained that $58 million in state bond funds would be transferred from the so-called East West Line to the rail car contract, but would be replaced by federal funds the MTA has applied for. The other $29.5 million from the Metrolink budget that the MTA wants to shift is money that was left over from a fund earmarked to acquire right-of-way from railroads, she said.

SCRRA Executive Director Richard Stanger explained the situation in a slightly different way. Stanger said the SCRRA used state bond funds earmarked for Metro Rail to purchase Metrolink right-of-way and is now "swapping back" the funds. But he agreed that "there is no money leaving the Metrolink program."

MTA board alternate Nick Patsaouras, perhaps the most vocal advocate of the San Fernando Valley line, commented that shifting state funds away from the valley project "has not been the policy of the MTA," and "if anybody's pushing that, they're out of a job."

But Bohlinger said the shift of state bond funds was approved by the MTA board when it adopted its annual budget last summer.

The Siemens Duewag team beat out three other aerospace/rail car company partnerships to win the rail car contract. Siemens Duewag's commitment to using American-made parts was a key factor in the MTA's decision to chose Siemens Duewag, which was not the low bidder.

Siemens Duewag is an American subsidiary of Duewag AG and Siemens AG of Germany.