SL says it has decided to annul the agreement due to what it describes as “Ansaldo’s shortcomings regarding compliance with the agreement, which resulted in lack of confidence in Ansaldo’s delivery capacity.”

Under the €80m contract, which was awarded in autumn 2010, Ansaldo STS was commissioned to equip the 41km line with CBTC and provide onboard equipment for 30 trains. The project was due to be completed by September 2013, but has suffered repeated delays.

With resignalling and the delivery of new C30 trains from Bombardier, SL had planned to increase peak capacity on the Red Line from 24 to 30 trains per direction per hour by 2021, with the introduction of driverless operation enabling the operation of 36 trains per hour in the longer-term.

In a statement, Ansaldo STS said the unilateral cancellation of the contract by SL and the request for reimbursement and damages was “without grounds,” and the company is “evaluating all the judicial initiatives to defend its rights, including the payment of works performed to date under the contract with SL and compensation for its damages.”

Ansaldo STS says SL is demanding the return of an advance payment of €24m plus VAT plus interest by November 17.