Alstom-São Paulo metro agreement questioned

São Paulo state prosecutors will investigate an agreement in which the administration of governor Geraldo Alckmin forgave at least 116mn reais (US$35.5mn) in debts from multinational French company Alstom related to a metro train control system contract, Folha de São Paulo is reporting.

The state government also allowed Alstom to deliver the system by 2021, which is 10 years behind the original schedule.

The 780mn-real contract signed in 2008 called for installing fully automated signaling systems in lines No. 1, 2 and 3 of São Paulo metro company CMSP by 2011. But to date, works are far from over.

Alstom has blamed the delays on CMSP, claiming the metro company did not carry out the preliminary civil works needed to install the French company's technology.

The agreement between the Alckmin administration and Alstom was reached through arbitration in January, Folha said. The public prosecutor's office had recommended cancelling the contract, but the government did not heed the recommendation. Now, prosecutors want all the documentation related to the agreement to see if the state's interests were harmed.