It's Polyethlene. I do alot of terrain building with toys made of this material and it just mans that you have to use superglue and prime with plastic-specific spray paint. I use Krylon Camo (has the "Made with fusion tech" logo) paint flat black spray for all soft plastics and it works really well.
Found out more about this specific toy at a different forum, but I'll put it here for anyone who is interested as well as my additional scale and measurement info:
Based on discussion at another forum, it turns out that these parts are the "Girder and Panel" system, an old kenner toy from the 50's that is still made by this company...
http://www.bridgestreettoys.com/cgi-bin/shopper.cgi?listcategories=action&parent=5000
...and was apparently licensed from them for this "power city" line of toys.
Scale and Size
As for scale, the Company currently making them (linked above) says that they are 1/87 (HO scale) and the doors on the panels currently being sold look about right for that. Technically that would make the panels too small for to-the-eye 25 or 28mm figs. However, there are many panels pictured on the website that are very scale-neutral and would look fine for 25 or 28mm figs. Apparently they will sell you packs of panels or other parts separately.
I'm not using any panels,so they work fine for 28mm.
For those interested in measurements
-the vertical columns are 50mm
-the horizontal beams are 70mm.
-All the beams are 5mm thick.
-Clearance under a beam that had been clicked into vertical columns is 45mm.
The lengths above do not include the connecting tabs or studs on the side or ends.