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Contracts Awarded for Monorail

by Richard N. Velotta

LAS VEGAS -- The company developing Las Vegas' $650 million monorail system says it will be under pressure to deliver a glitch-free product when it opens in early 2004 so that potential investors in the Phase II expansion know they aren't buying a lemon.

Two contracts were approved last week for the design, construction and equipping of a planned 2.3-mile extension of the monorail into downtown Las Vegas from the Sahara hotel-casino along Main Street to a station near the Fremont Street Experience.

Granite Construction Inc., Watsonville, Calif., won the design and construction contract for the track, four stations and a maintenance building, valued at $200.3 million while Bombardier Inc., Montreal, will design the trains and be contracted to run the system for five years for $223 million.

Those are the same two companies that are under contract to build the four-mile Robert N. Broadbent Las Vegas Monorail line from the MGM Grand hotel-casino to the Sahara.

Broadbent, who died of cancer earlier this year, was a driving force in the development of the monorail, heading the company that arranged the financing and awarded the construction contracts for the system that is expected to go on line early next year.

Cam Walker, president and chief executive of Transit Systems Management LLC, the corporation building the current monorail system as well as head of a similarly named Transit Systems Development LLC, the company coordinating the extension on behalf of the county's Regional Transportation Commission, said there's no firm date for the start-up of passenger service.

"There's no target date," Walker said. "It will be open in the first quarter of 2004. We're dealing with a lot of moving parts here, with seven stations and nine trains. We want a solid, achievable date to open. That's the way of good construction."

Walker explained that the last of the nine trains would be arriving shortly and entering the testing and commissioning phase. The entire track, from the MGM Grand to the Sahara, is open and trains have been running along its length in test runs.

"I've had people tell me that they've seen trains coming out of the Bally's building," Walker said. "They say it looks great."

The trains are capable of speeds of up to 50 mph, but probably will run at an average clip of 25 mph when they operate on the existing system. But they won't be hindered by heavy traffic or stopped by red lights. A passenger should be able to run from one end of the line to the other in less than 15 minutes, including the 30-second "dwell time" in each station. The wait time between trips is estimated at four minutes.

Among the 300-passenger trains in place is a set sponsored by Monster Beverage Co., a subsidiary of Corona, Calif.-based Hansen Natural Corp., the first company to sign on to sponsor a train on the system for $1 million a year.

Another train is sponsored by Motorola Inc., Schaumburg, Ill., and monorail officials say a deal is imminent on the sponsorship of one of the seven stations. Monorail officials haven't said how much they'll get for station sponsorships.

Once all the trains are mounted on the track, the system's contractors must complete a 30-day demonstration period during which the automated, driverless trains must run without a hitch.

Only then will the system take paying customers. Walker has promised county transportation officials the system would be running by April 1, but in all likelihood it will be going before then.

Passengers eventually will be able to purchase tickets through the monorail Internet site. When the system is running, passengers will be able to buy single rides ($3), round-trip tickets ($5.50), 10-ride tickets, one-day passes and three-day passes. Walker said the three-day passes should be ideal for conventioneers visiting the city.

"Can you imagine what it will mean to be able to get to the Convention Center from the MGM Grand in about 10 minutes?" Walker asked. "It will change the whole dynamic of the convention industry here."

The monorail company expects 19 million passengers will ride the vehicle as an attraction in a year -- more than half the total number of visitors to the city in 2002.

Once the system is on line, the contractors will turn their attention to the extension into downtown, which is expected to be seamless. Walker expects getting the financing completed sometime next year after the awarding of the construction contracts.

Key to the package is federal grant money. Walker said Sen. Harry Reid, D-Nev., has worked to assure that the grant money would be available.

Monorail officials are expecting to get $150 million from the Federal Transit Administration through the Department of Transportation. There also are plans to get a $150 million DOT innovative transportation loan that won't accrue any interest until the system begins operating.

The RTC has promised $50 million toward the project to build a station at Charleston Boulevard.

The Las Vegas City Council also has pledged its share of room taxes to the project as a demonstration to federal officials that it is committed to the monorail.

The last piece of the financing package is the $120 million in private debt financing. The monorail company would pay back that debt with fare receipts.

But because the first phase of the monorail should be in operation by the time the monorail company tests the bond market, investors will know if there are any problems.

"No doubt," Walker said when asked whether there would be pressure to perform. "But a little pressure is a good thing. Like the opening of any major project on the resort corridor, it's a daunting task, but also a lot of fun."

Copyright © Las Vegas Sun. Inc. Republished with permission.

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