Talgo pays penalties for late delivery of trains to RENFE

Talgo pays penalties for late delivery of trains to RENFE. It will penalise Talgo by EUR 80,000 per day for late delivery of trains due to the late delivery of the S-106 high-speed trains, known as Avril, for which Renfe has already claimed EUR 166.6 million (EUR 50 million for loss of profit).

taking over Talgo

RENFE has been charging Talgo since Monday, according to the contract they have, penalties of 80,000 euros per day for delays in the delivery of the S-106 high-speed trains, known as Avril, for which it has already demanded 166.6 million (of which 50 million for loss of profit), according to elconfidencial.com.

At the last meeting of RENFE’s Board of Directors – held on 18 March last year – it was agreed to apply, as of 1 April, the aforementioned penalties set out in the contract, according to what sources within the public rail operator confirmed to EFE on Monday.

Talgo pays penalties for late delivery of trains to RENFE

The new date set for the delivery of the first Avril variable gauge trains, communicated by Talgo to the Ministry of Transport and Sustainable Mobility, is 8 April, according to statements made by its head, Óscar Puente, in an interview with Onda Cero on Monday. “Talgo told us that the trains would be delivered from 8 April, but they also told us previously that they would deliver them on the 1st, which didn’t happen, so I can’t commit to a date. But it looks like we are already very close, we are probably talking about a few days or at most weeks,” the minister explained.

On 6 February, RENFE sent a letter to Talgo claiming a fine of EUR 166.6 million and warning of an update of the penalty, starting on 1 April, if the trains continued to be undelivered.

In the letter, RENFE drew Talgo’s attention to the fact that the documentation provided so far does not justify the fact that the delays in delivery are not attributable to the company and reminded it that this is “a flagrant breach of its contractual obligations”, which causes significant damage to the operator and rail transport users in general. “We expressly reserve the right to be compensated for all damages caused, including loss of profit, as well as the application of penalties established by contract, communicating the amount of 116,646,061 euros, without prejudice to any update that may correspond, especially with regard to the damages that will be accounted daily from 1 April 2024, which are estimated at 80,000 euros per day if the trains are not delivered for commercial operation,” RENFE warned.

In 2016, RENFE awarded Talgo a EUR 1.281 billion contract to build 30 high-speed trains, 15 of which are variable gauge trains (which can run on conventional and standard gauge). They were due to be delivered initially from January 2021 to enter service in the summer of the same year on links between Madrid, Galicia and Asturias. When RENFE informed Talgo in 2022 that it would demand a penalty for the late delivery of its order, the company attributed the manufacturing delays to “force majeure” and “exogenous” causes to the company, including production decreases and supply chain interference caused by Covid 19 and geopolitical events.

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