BIKE: Monorail vs. LRT costs: Vegas v. Houston

[Nawdry]

My posting to another list, appended below, responds to a debate comparing 
costs of the Houston light rail project ($324 million, or about $43 
million/mile) with those of the Las Vegas monorail.  It seems relevant to 
some of the issues raised in the discussion on Austin-Bikes.

LH

At 2004-09-06 12:29 , [JGH] wrote:

if we say that O&M for Vegas and Houston are approximately $15 M per
year and interest payments are perhaps 20% of the total construction
cost (pure guess here...LOL) then the Vegas construction cost is
around $480M versus 324M (based on only 5 years of DBOM and
thinking
it includes all years up until retirement of the debt?)


The discussion about the private financing of the current 3.9-mile project,
now in operation, involves a lot of pure speculation.  According to several
news stories, the actual project cost came in at $24 million short of the
projection of $650 million, putting the project cost at $626 million (no
mention of a 5-year operating cost).  This implies a per-mile cost of about
$160 million, a bit less than 4X the cost of MetroRail.

Appended below is a news item from Nov. 2003 which gives cost figures
for the 2.3-mile extension project.  It does indicate that Bombardier got the
DBOM contract - for systems equipment, rolling stock, and 5 years of
operation - for $223 million.  Assuming an average annual O&M cost of
$14 mn/year (per LLC Monorail Operating Cost Analysis), that comes to
$70 mn, leaving Bombardier a net capital cost of  $153 mn.  Add to the
Granite contract's  $200.3 mn, and you get a total $353.3 million, or about
$154 mn/mile for the 2.3-mile project.  However, that doesn't appear to
include engineering design, overall project administration, ROW
acquisition, and other ancillary costs included in the LV project and most
other rapid transit and light rail projects.  In any case, the direct $154
mn/mile cost is still about 3.5X the $43 mn/mile total cost of Houston's
surface LRT.

Another way of looking at this is how much system you get for the money.
Funding resources are extremely limited, and urban areas like Houston
are sprawling.  Planners have to make the decision whether they want to
invest in a few miles of high-dollar, totally grade-separated rapid transit
project for their inner city, or to accept compromises in return for reaching
out further to connect suburban areas with the urban core.  Dallas and
most other US cities appear to be conforming to the latter model, and
Houston evidently has followed their lead.

Another consideration is qualifying for FTA aid, which requires meeting a
stringent value-per-dollar threshold.  An elevated project, like monorail,
immediately spikes up the cost component relative to ridership and
benefits to riders (the main thing the Feds look at), making it exceedingly
difficult to qualify unless you have an unusually high-density, high-traffic
corridor (as in the Vegas Strip).  That's undoubtedly one of the major
reasons why so many cities, interested in realistic urban rail transit
development, have opted for LRT rather than full rapid transit options
including monorails.

LH

=PTP============================================

http://www.lasvegassun.com/sunbin/stories/gaming/2003/nov/06/5158271
85.html


LAS VEGAS SUN
November 06, 2003

Contracts awarded for next LV monorail phase

By Richard N. Velotta
<velotta>

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."