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Siemens sues Highways Authority to pay up

By on March 28, 2018

SAN JUAN — Siemens Transportation Partnership Puerto Rico sued the P.R. Highways & Transportation Authority (HTA) to demand payment of the authority’s debt owed from the construction of the Tren Urbano (Urban Train) in the 1990s.

The litigation includes as defendants the Puerto Rico Financial Oversight & Management Board, the Fiscal Agency & Financial Advisory Authority (Fafaa), and the Government Development Bank (GDB).

The HTA hired Siemens for construction work on the Tren Urbano in 1997. This ended in arguments over the payment of contracts. In a transactional agreement settled later, the HTA agreed to pay Siemens $52 million.

(CB Photo)

The HTA was to deposit a final payment of $13 million into an account in April or June 2017. Siemens asked the GDB to make the funds available, but the request was not completed, although the HTA had agreed to honor the agreement.

In September, Fafaa and the GDB informed U.S. federal Judge Judith Dein that the funds were not deposited and insinuated there was no agreement to deposit the money owed in an escrow account, where funds are deposited and to which access is provided under certain conditions.

In January, during a deposition, GDB chief restructuring officer José Santiago said otherwise, stating, in fact, some $13 million found in an escrow account was owed to Siemens.

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However, Santiago said the GDB had refused to make the payment because the Puerto Rico Emergency Moratorium & Financial Rehabilitation Act and other regulations prevented it. Santiago added that the money Siemens is owed could be mixed in with other government funds when they were to have been kept separate.

Siemens asked the federal court to issue an order to complete payment of their work during construction of the Tren Urbano.

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