Construction Company Files Suit Claiming That California Bullet Train Is Preventing Further Contracts

Despite intentions to benefit local companies in Central Valley, the new California bullet train has halted one construction company's business.

The firm, West Pacific Electric Company, is led by Virginia Villa. Villa obtained a contract for a piece of the construction of the rail after attending the project's outreach meetings for a year.

Dragados USA awarded Villa's company a $685,000 subcontract in 2016, tasking it with relocating five telecommunication wires along the train's line. In preparation, Villa picked up employees, bought equipment, and contributed about one million dollars in bonds, thus restricting her company's ability to submit new bids.

Earlier this week, Villa launched a lawsuit in Sacramento that claims that Dragados entered the suit with the knowledge that it had no legal means of entry to two of the five proposed construction sites. The firm was forced to stop working after completing work on the first three sites and subsequently requested to be let out of the remaining contract with Dragados and have its bond refunded.

Lisa Nicolls, Villa's lawyer, says that Dragados denied the request. Left sans bond, the West Pacific Electric Company couldn't afford to bid on new contracts, the suit claims.

Nicolls explains that if Dragados had informed Villa that it couldn't legally access the land, she would never have agreed to the subcontract, and the bonds would never have been loaned. The company's bonding situation has left it virtually frozen.

Villa's lawsuit is asking for $2 million as well as damages to make up for the losses.

A rail authority representative asserts that while it can't directly mediate the situation, it is trying to get the two companies to negotiate. No one from Dragados has yet made an official statement about the precedings.

According to Nicolls, West Pacific could have landed other contracts due to the current high demand. The lawyer says that Villa's firm could be trapped in this subcontract for a further eighteen months if the issue is not resolved.

The problem goes further than Dragados. In fact, the California rail authority is so delayed in obtaining land rights that it has compensated contractors like Dragados over ten million dollars.


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