DSB reportedly to refuse to pay for delayed trains

State-owned railway operator says the Italian-made trains are too far behind schedule and don’t work well enough

July 11th, 2012 3:56 pm| by admin

After being taken out of service for eight months with a braking malfunction, the country’s troubled IC4 trains are scheduled to get back on the tracks this week. But even with service resuming, state-owned railway company DSB is reportedly refusing to pay Italian manufacturer AnsaldoBreda for any IC4 or IC2 trains that have been delivered since the start of 2012, according to Ingeniøren.dk.

DSB said its refusal to transfer payment comes after AnsaldoBreda did not live up a 2009 agreement about the quality and delivery schedule for the trains, which have been beset by problems since entering into service four years behind schedule in 2007.

According to the report, AnsaldoBreda is behind by 15 IC4 trains and 10 IC2 train sets and the quality is far below what DSB and the Italian company the terms the two companies agreed to.

DSB has already spent a billion kroner more than the initial 5.3 billion kroner the IC4 project was expected to cost. Some are speculating that by refusing to pay the companys hopes to force AnsaldoBreda to pay compensation for upgrades needed on the new trains that have already been delivered. 

DSB’s decision, however, carries with it the risk that AnsaldoBreda will drag the company to court for breach of contract.

In a message to parliament, DSB indicated that relations between the two companies had hit a low point.

“Negotiations are slow. We are waiting for positive signs from AnsaldoBreda's management as to how the process can be revitalised.”

Neither DSB nor the Transport Ministry would confirm the Ingeniøren account, but Christian Bjørnskov, of the Aarhus school of business, said withholding payment was an effective tactic.

“This isn’t something we normally do in Denmark, but it shows how much tension there is between DSB and AnsaldoBreda,” Bjørnskov told Jyllands-Posten newspaper. 

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