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Stymied in Alstom case, Budapest mulls new metro carriage tender

A new tender is likely to be called for carriages for two of Budapest's underground lines, mayor István Tarlós said on Friday, after a court hearing in a case involving France's Alstom, which was originally to have delivered the vehicles.

Alstom made charges in the hearing that were not true, and the French judge did not give the Hungarians any way to react, Tarlós said. He dismissed allegations by Alstom that Budapest's new local government has made a deal to buy cheaper carriages from Russia and said the city could sue Alstom for defamation.

Tarlós said he would meet with Prime Minister Viktor Orbán next week to discuss calling a new tender for the carriages.

Under a contract signed in May 2006, Alstom was to deliver 22 trains for the capital's number two metro line for €150 million and 15+7 trains for the fourth line, under construction at present, for €114 million. BKV said in October 2010 that it cancelled the contract because Alstom "failed to do all that was expected of it in the interest of fulfilling the contract".

Alstom's application for permits for the vehicles it was to deliver was hampered because the brake systems used differed from those stipulated in Hungarian regulations.

Tarlós said earlier that Hungary's National Transportation Authority told Alstom four times in 2007 and 2008 that the brakes on the trains it was to deliver were unsuitable according to Hungarian safety rules.

BKV tried to call down a bank guarantee on the order, but a French court in December accepted a plea by Alstom blocking the attempt. The Budapest local council appealed the decision and the first hearing in the case was on Wednesday.

BKV made a 50% advance payment on the trains or about HUF 30 billion. Alstom's indemnity was worth 10% of the order.

Tarlós said on Friday that if the second-instance court ruling is in Alstom's favor, the city may still contest the decision.

Alstom said in a statement sent to MTI on Friday that it did not wish to comment on the case until a ruling is made on June 8.