Italy-based AnsaldoBreda has entered into an agreement with Danish State Railways (DSB) for the payment of €267m as penalty for not delivering trains on time as agreed in a contract.

AnsaldoBreda bagged the order of 83 IC4 trains from DSB and was expected to deliver by 2006, as per the initial agreement.

It also took an order for 23 IC2 trains from DSB.

The value of contract for the IC4 trains amounted to DKK4.5bn (in 2000) and DKK800m (in 2002) for the IC2 trains.

But AnsaldoBreda did not manage to honour this order as it had encountered numerous problems in the initial stages of delivery.

AnsaldoBreda later delivered 15 inter-city IC4 trains as ordered by DSB, but the trains still have problems.

The two companies reached a new agreement in which AnsaldoBreda will deliver the rest of the IC4 and IC2 trains by the third quarter of 2012.

The new agreement also includes higher future penalties and the possibility of cancelling the contract if AnsaldoBreda does not meet the new conditions and deadlines.