BIKE: Re: Las Vegas monorail shut down

[Nawdry]

** NOTE: I originally sent this last night, but it seems not to have been 
posted...**

Comments below... (also see news and comments on a different but related 
topic, further below)...

At 09/10/2004 08:51 , Nick Dalton wrote:
>All an automatic monorail is trying to do is emulate what a elevator/lift 
>does vertically.
>We have been running these things without bell boys since the 50s? Why is 
>it so difficult to reproduce horizontally what we do vertically in huge 
>numbers of office buildings. I don't see lift controls as behind that high 
>tech ? Whats the hitch ?   Longer distances just mean longer bits of wire.

Elevators operate in a simple, straight vertical alignment reliably pulled 
by cables with counterweights.  The cars are exceedingly simple - a tiny 
fraction of the complexity of an urban transit system.  There are next to 
no onboard moving parts - mainly the door mechanism- and no onboard motors 
and drive equipment.  They are isolated from weather conditions.  They 
typically operate in a relatively security-controlled environment.  Even 
so, there seem to be lots of breakdowns - but this is often not a big 
problem where more than one elevator shaft is available.  I could probably 
think of more differences, but that's enough for starters.

Thirty or so years ago, automated transit systems were being proposed as 
"horizontal elevators".  This was mainly applied to the "Personal Rapid 
Transit" concept, which was mutating somewhat into a "peoplemover" or 
Automated Guideway Transit concept.  The idea was that the small 
"horizontal elevator" cars would come on demand, much like the elevator 
cars do in the vertical environment.  This has never panned out for a wide 
variety of reasons - capacity constraints being one of them.  Inherent 
limitations in automation technology, vis-a-vis the level of complexity 
required, has been another reason.


>Theoretically the big running cost of a urban transport system is the 
>ongoing wages cost. Its normally sighted as the reason most public 
>transportation systems need ongoing subsidy. If you can eliminate the 
>driver without overly inflating the cost of capital or maintenance ( as in 
>an elevator ) then this would be a considerable change. If anyone does 
>know of the on running costs please let me know.


Reducing ongoing operations & maintenance (O&M) costs was, and continues to 
be, a major claim of proponents of PRT and AGT.  This seems not to have 
materialized in reality, mainly because the elimination of drivers is 
apparently offset by the need for additional technicians and security (or 
"passenger-relations") personnel.  This does not mean there are no benefits 
to automation, but in my view they're more operational than economic.  I 
believe there are some advantages to manual operation, over and above the 
tremendous capital cost savings of from eliminating the need for a totally 
grade-separated, technology-heavy  environment.

There's an interesting discussion on the O&M issue, with some relevant 
data, in the following article:

Transit Automation and Operating Cost - Where Are the Huge Savings?
http://www.lightrailnow.org/facts/fa_monorail002.htm

**************************************************************

I will continue to a different subject, to conform to the constraints of my 
posting allowance.

After returning to operation briefly on Wednesday, the Las Vegas monorail 
experienced yet another incidence of dropping a piece of hardware, 
resulting in a more serious shutdown.  A large driveshaft washer apparently 
detached and struck the high-voltage power conduit on its way down, causing 
arcing and taking a small chunk out of the beamway.

This latest shutdown, following on the heels of an inspection after the 
first incident (loss of a guidewheel), apparently is stirring a 
considerably greater level of alarm, and may be more prolonged.  As the 
following news items relate, here are some of the main consequences of this 
latest incident:

* The current status is now being described as an "indefinite shutdown".

* The planned 2.3-mile extension is now considered "in jeopardy" and the 
project has been put "on hold" as officials and planners evaluate whether 
the technology is reliable enough for the extension project to proceed.

* A major bond rating company is now evaluating whether to downgrade the 
status of the Las Vegas monorail bonds now at a relatively low BBB-) to an 
even lower level.

See articles below.

LH


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http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2004/09/08/state21 
39EDT0195.DTL

San Francisco Chronicle
Wednesday, September 8, 2004

Las Vegas monorail closes one day after it reopens

ADAM GOLDMAN, Associated Press Writer


(09-08) 18:39 PDT LAS VEGAS (AP) --

The Las Vegas monorail was closed one day after it reopened when a
piece of a train's undercarriage fell off Wednesday and landed in a busy
street.

A system spokesman said no one was injured.

The incident happened about 10 a.m. as the fully automated train was
heading south on its elevated tracks, monorail spokesman Todd Walker
said.

Walker said a slip disk -- similar to a large washer -- that was connected
to the drive train came loose. The 6-inch disk weighing one to two pounds
hit a power rail, which supplies electricity to the train. The contact caused
electrical arcing but no serious damage to the track before it fell about 25
feet to the street.

Walker said the monorail, which travels along a 3.9-mile route, will reopen
when Clark County inspectors and system officials say it's safe.

"The monorail is closed indefinitely until safety concerns are satisfied,"
Walker said.

Ron Lynn, head of the county building division, said the system would
undergo intense testing and every train's undercarriage would be
completely dismantled and inspected.

The monorail had just reopened Tuesday morning after being closed for
six days following a Sept. 1 incident in which a 60-pound wheel fell off one
of the trains. Nobody was hurt. Walker said the wheel was installed
improperly at an assembly plant.

The closure cost the private venture an estimated $480,000 in revenue.

The $650 million system was already six months behind when it began
operating in July.




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http://www.reviewjournal.com/lvrj_home/2004/Sep-09-Thu-2004/news/24725925.html

Las Vegas Review-Journal
Thursday, September 09, 2004

Falling debris closes system

Incident behind Paris Las Vegas is second in month

By OMAR SOFRADZIJA
REVIEW-JOURNAL

-----------------------------------------------------------
[PHOTO]
Ron Lynn, an official with the Clark County Development Service
Department's Building Division, talks about actions to be taken to ensure
the safety of the monorail system. A Monster Energy train sits at the
Bally's/Paris station after it lost a metal object.
Photo by John Gurzinski.
-----------------------------------------------------------

-----------------------------------------------------------
[PHOTO]
Damage caused to the monorail from a metal object that disconnected
from a train is seen in the photo at right.
Graphic by Mike Johnson.
-----------------------------------------------------------


A two-pound metal object fell from the Las Vegas Monorail Wednesday,
closing the fledgling system for the second time this month.

No one was injured in the 10 a.m. accident along Audrie Street behind
Paris Las Vegas. It was the third time debris fell to the ground since the
monorail opened July 15.

On Sept. 1, a 60-pound tire plummeted into a Strip parking lot, sparking a
six-day closure that ended Tuesday.

"Anything falling from the train, especially two events so close to one
another, is absolutely unacceptable," said Todd Walker, a spokesman for
monorail manager Transit Systems Management. "It's unacceptable that
the system that has been given to us is operating like this."

Walker said a restart would be a day-to-day decision based on monorail
operator Bombardier Corp. being able to reliably run the system.

"We want to ensure that the contractor and operator delivers the system
that we paid for," Walker said. "Until they prove to us that this system is
ready to begin carrying passengers, I don't want to guess the number of
days or how long the system will be closed for."

If the previous six-day shutdown is any indication, it may be a while before
paying passengers take a monorail ride.

"It will be some days," Ron Lynn, an official with the Clark County
Development Service Department's Building Division, which has
regulatory authority over the monorail.

"We'll be inspecting the complete undercarriage of all the trains," Lynn
said. "Right now, there's a credibility issue, so we'll look at the complete
system. We're deeply concerned, and we're going to take all the
necessary steps to be prudent on this issue."

Bombardier vowed to fix whatever needs fixing on the balky $650 million
centerpiece of the valley's mass transit system.

"We definitely want to investigate and resolve this issue," said Kathryn
Nickerson, a spokeswoman for Bombardier. "We certainly appreciate the
disappointment and frustration of our customer."

"We, as a company, are totally committed to ensuring the system is
reliable and safe. Where there are deficiencies, we'll investigate in a
thorough manner," Nickerson said.

Wednesday's incident was sparked by the failure of a vertical metal pipe
called a "flange" that helps support the horizontal drive shaft on the trains.

The flange apparently snapped on Train No. 1, an unthemed southbound
train which had just left the Bally's/Paris station. A 6-inch, disc-shaped
piece of the flange fell away and struck an electrified rail alongside the
monorail track, authorities said.

That 750-volt rail supplies power to the train. A small electrical explosion
resulted from the live wire being struck by the piece, which then fell to the
sidewalk 20 feet below, authorities said.

The tiny blast left a gouge and coating of ash, looking like an ugly black
bruise, along the monorail track's white concrete side.

All trains in operation at that time soon pulled into the nearest stations and
were emptied of passengers without incident. The wounded No. 1 train
ended up at the MGM Grand station.

Authorities are looking for links to a Jan. 5 incident in which a 40-pound
drive shaft fell from a train during system testing. "That's what we're going
to investigate," Lynn said.

Since then, another brace was added to the drive shaft, and that brace
kept the drive shaft from falling away this time, Lynn said.

The January incident was caused by stress put upon the drive shaft in
repeated day-to-day operations, Lynn said.

"It happens occasionally. This type of failure (Wednesday) is kind of
puzzling," said Antonio Garcia, a county associate engineer. "It failed in a
way that's very puzzling at this moment."

Garcia said the county will look at whether a faulty part, poor assembly,
improper maintenance, shoddy operations or a design flaw contributed to
this week's incident. "We're going to look at everything," he said.

Lynn said if the type of stress endured by the drive shaft is unavoidable,
he may mandate more frequent replacement of drive-shaft parts.

Wednesday's incident added to a growing list of miscues by Bombardier,
one of the world's leading transportation companies, whose clients include
the famed London subway.

In addition to last week's wheel failure and January's drive-shaft drop, on
Aug. 16 a Bombardier worker inadvertently opened a set of passenger
doors that faced a steep drop-off from an elevated track to the street
below. The worker was suspended.

The day before the Sept. 1 wheel failure, workers ignored an alarm
indicating trouble with the rail line and failed to follow up on the alert.

And the system's launch was delayed from early 2004 because of a series
of glitches with the system's driverless steering computers.

Bombardier and system co-builder Granite Construction of Watsonville,
Calif., were assessed more than $11 million in fines for missing a Jan. 20
deadline to have the system ready for public use.

"The last thing we want to do is frustrate our customer," Nickerson said.
"We hope to recover from this very, very quickly and get the system back
up and running and resolve these problems."

While monorail officials may be able to deflect blame to Bombardier, it will
be a challenge to buff away the tarnish that's settled on the monorail's
reputation.

Last week's shutdown kept tourists from riding the train during the busy
Labor Day holiday, and system officials have said they're counting on
word-of-mouth to attract new riders.

"There's always a concern how people will perceive the system," Walker
said. "We know long-term this system will be successful."

Lynn said he's weighing whether some sort of shield needs to be placed
between the monorail's elevated tracks and the ground below along the
system's entire 4-mile route to protect passers-by.

"No place else in the world do they have that; nonetheless, we have a
high degree of pedestrian traffic in this area," he said.

At this week's incident site, tracks are almost directly above a sidewalk
and mere yards from the street.

Passengers holding monorail tickets can arrange for a refund by calling
699-8299.


http://www.lasvegassun.com/sunbin/stories/sun/2004/sep/09/517482805.html

LAS VEGAS SUN
September 09, 2004

System closed until latest glitch fixed

By Stephen Curran


County inspectors Wednesday afternoon were looking into whether an
industrial-strength washer that fell from the Las Vegas Monorail on
Wednesday and prompted the system's second extended closure in one
week may be related to a glitch that caused a drive shaft to fall from a
train in January, a county building official said.

The monorail will be closed until investigators determine what caused the
problem and are satisfied that it has been fixed; that is expected to take at
least several days, the county official said.

The latest closure was prompted by a six-inch washer, used to secure the
drive shaft to the train. The washer fell from the train about 10 a.m.
Wednesday near the Bally's/Paris platform. The two-pound piece of metal
hardware touched a track before landing, causing a spark that left a small
part of the elevated track scorched Wednesday afternoon, Todd Walker, a
spokesman for the monorail, said.

The train was able to continue to the MGM Grand station, where
passengers had to disembark, Walker said. No property damage or
injuries were reported, he said.

This most recent closure came barely a day after the $650 million
monorail system re-opened following a six-day closure. That closure was
prompted by a 60-pound tire assembly's fall from the train. Investigators
this week determined the tire assembly had been improperly installed by
the manufacturer, Canada-based Bombardier Transportation, Walker said
Tuesday.

"Something has happened twice in the same week," he said. "Either one
is unacceptable."

The two incidents appear to be unrelated but inspectors from the County
Building Division, which oversees the monorail, are looking into whether
Wednesday's failure may be related to a January incident in which a drive
shaft fell from the train while it was still in its testing phase, Ron Lynn,
Clark County Building Official, said.

The washer was part of a phalange system used to secure the drive shaft.
A bolt held in place by the washer also broke but the phalange kept the
drive shaft from falling again, he said.

Engineers are expected to carefuly scrutinize each train's undercarriage to
determine whether the failure was caused by faulty parts used to secure
the drive shaft or an inherent design flaw within the system. The process
will likely take several days, Lynn said.

The assemblies, which require periodic replacement, were supposed to
require annual testing, Lynn said.

"These types of assemblies you would expect to be replaceable but you
wouldn't expect it to happen this quick," he said. "We're going to go
through the entire undercarriage. It's not a tomorrow issue by any means."

The closure left scores of would-be passengers like Seattle couple Fawzi
and Cindy Khoury perplexed as to why the system, touted as a low-cost
alternative to taxis, was suddenly out of commission.

The Khourys, who tried to board at the Bally's entrance, said they were
particularly interested in riding the Las Vegas monorail after following
controversies in their hometown stemming from a proposed 14-mile
extension to the Seattle monorail.

That city's monorail will likely be operated by Bombardier rival Cascadia
Monorail Co., the sole bidder after Bombardier failed to bid by a deadline
set by the city, according to The Seattle Times.

"We were anxious to see it," Fawzi Khoury said. "We were just curious.
It's pretty controversial (in Seattle)."

Relations had grown strained between Transit System Management, the
company that runs the privately funded monorail, and Bombardier after
monorail officials claimed monorail operators missed warnings leading up
to last week's failure and threatened disciplinary action against
Bombardier.

Also, a Bombardier employee was suspended Aug. 16 after he mistakenly
opened a set of doors facing a 25-foot drop while passengers were on
board. The passengers inside were transferred to another car while it was
inspected.

Kathryn Nickerson, a spokeswoman for Bombardier, said the company's
CEO had contacted Jim Gibson, CEO of the Las Vegas Monorail Co. and
mayor of Henderson, on Wednesday to discuss the breakdowns.

Nickerson will also join the teams coming in from Montreal and Pittsburgh,
she said.

"We are cooperating fully with the Las Vegas Monorail Company," she
said. "I feel we have always had a great relationship but we do regret the
inconvenience to our passengers."

When confused tourists are turned away from the monorail, John
Morrison is often their first stop for information. Morrison operates a kiosk
near the monorail entrance for Hilton Grand Vacations, which operates a
timeshare complex near the monorail line, and has openly criticized the
system since it opened earlier this summer.

"I haven't heard enough good news to put our faith and trust in a product
that's not even American," Morrison said of the Canadian-built trains. "I
don't want to hear the good things beause there are no good things. It's
not worth it."

The monorail is unlikely to face any fines levied by the county, as it does
not appear company managers attempted to cover up the flaws, Lynn
said. The trains will, however, be subject to daily inspections after the
system reopens until engineers are confident the trains are safe.

Transit System Management will be billed $75 an hour for each engineer
who inspects the trains, Lynn had said.

When the monorail is closed, the estimated loss to the Las Vegas
Monorail Co. is $85,000 per day.

This week's closure is the latest in a string of glitches that have continued
since the system opened July 15, after problems during testing pushed
the opening back more than six months.




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http://www.klas-tv.com/Global/story.asp?S=2273964&nav=168YQhSw

KLAS-TV News - Las Vegas
September 9, 2004

Las Vegas Monorail Not Running

-------------------------------------------------------
[PHOTO]
Monorail train stopped on tracks (picture from Stratosphere web cam)
-------------------------------------------------------

-------------------------------------------------------
[SIDEBAR]
  Also on klastv.com
   History of Las Vegas Monorail's Mishaps
-------------------------------------------------------

(Sep. 8) -- Just one day after re-opening from a week-long shutdown, the
Las Vegas Monorail is closed once again. County building officials say a
metal washer fell off of one of the cars. Now every train will be inspected,
which means the monorail will be shult down for days -- if not weeks.

The system was shutdown Wednesday morning when a washer fell off of
one of the cars near the south end of the Strip. The monorail had only
resumed operations Tuesday after being closed due to a wheel falling off
of one of the trains. Investigators checked the system and deemed it safe
to operate again.

Frustration is what passengers, the county and the monorail company are
feeling right now. Contracted engineers just went home after inspecting
the cars following the incident when the wheel fell off. Now those
engineers are heading back to Las Vegas to inspection the cars once
again. And county building inspectors are also getting involved.

County inspectors say what happened is that a bolt broke that was
holding a metal piece, called a flange, on the undercarriage of one of the
cars. That's when a washer, 6 inches in diameter, fell onto the track
arching the electricity.

The monorail operator instantly shut down the system. Todd Walker, who
works for the company who manages the monorail, says the problems
plaguing the monorail are unacceptable, but these types of problems are
not uncommon with other similar transportation systems in other cities.
Walker says the good news is no one was injured.

At this time, it's unclear how long the monorail will be shut down. In
addition to the engineers, the county is also going to inspect the
undercarriages of all 9 of the monorail cars, which could take at least
several days.

Another concern is that the washer that fell onto the track also fell to the
ground and it could have hit someone. That's why the county is now
considering re-designing portions of the monorail.




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http://www.klas-tv.com/Global/story.asp?S=2275427&nav=168YQhSw

KLAS-TV News - Las Vegas
September 9, 2004

History of Las Vegas Monorail's Mishaps

Dayna Roselli, Helo Reporter


(Sep. 8) -- The first few months of the monorail's operation have not gone
smoothly. But Wednesday's shutdown is just the latest in a list of monorail
mishaps. The monorail's troubles began during the testing phase at the
beginning of this year.

Back in January, an 18-inch drive shaft dropped off the bottom of one of
the trains, falling 15 feet to ground at the MGM Grand station.

Last month, an employee for a monorail contractor was suspended after
opening a set of doors about 25 feet above the ground. The employee
was sent to the Hilton station after crews reported a maintenance light
was on. The technician overrode the system's automated controls,
allowing him to open the doors manually on the wrong side of the
platform.

Then just a week ago, a 60-pound tire assembly fell from one of the
trains, as it was moving. The pieces slammed into a parking lot near Koval
Lane, behind the Venetian. That mishap forced the system to shutdown
until just Tuesday.

No one was injured in any of those accidents.



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http://www.reviewjournal.com/lvrj_home/2004/Sep-10-Fri-2004/news/24735244.html

Las Vegas Review-Journal
Friday, September 10, 2004

INDEFINITE SHUTDOWN: Monorail extension on hold

Four-mile system to stay closed until safety problems are solved

By OMAR SOFRADZIJA
REVIEW-JOURNAL


The Las Vegas Monorail won't carry passengers anytime soon, and the
rail line's downtown extension is on hold until officials succeed in fixing
problems that have bedeviled the new rail line.

The $650 million, four-mile system has been closed since Wednesday,
when a metal part connected to a drive shaft fell from a train. That was
the third time this year debris has fallen off one of the trains.

"We will not open this system until we have confidence and verification
that the system is safe for passenger service," Jim Gibson, CEO of
monorail manager Transit Systems Management LLC, said Thursday. "I
can safely say we'll be down for several days, for sure. Beyond that, we
don't know until we look at the results of the investigation."

One official suggested the testing of the system might require its closure
for weeks.

Gibson said the indefinite shutdown was tough to accept, but necessary.
"Since we recognize the public demands a safe system, we have no other
course."

Officials had hoped to break ground on a $450 million, 2.3-mile extension
to Fremont Street as soon as next summer. That target date will be
missed, and the entire extension is in jeopardy due to the initial segment's
woes.

"For a transit system to work, it has to be reliable and it has to be safe.
Until those concerns are dealt with, there is no downtown extension," said
Jacob Snow, general manager of the Regional Transportation
Commission.

Snow said the monorail system needs to demonstrate the most
fundamental traits of a transit system.

"I'd definitely start with no things falling out of the train at all," Snow 
said.
"Until you see that type of reliable service you'd expect with a transit
system, you'll have more questions than answers."

Central to those answers is monorail builder and operator Bombardier
Corp. In the coming days, Bombardier engineers, along with local
monorail officials, Clark County inspectors and outside consultants will
scrutinize how Bombardier builds trains, maintains and operates the line,
and trains its workers.

Bombardier already has been contracted to build and operate the
extension, known as Phase II, which will rely on about $320 million in
federal grants and $130 million in bond sales.

Those pending bond sales are dependent on the financial and operational
success of the initial Phase I. The first phase is leaning on farebox
revenues to pay back a hefty chunk of its price tag to bondholders.

While the line is down, it's losing an estimated $100,000 a day in fares,
and problems in keeping the line open is hardly reassuring to bond buyers
considering a purchase of Phase II bonds.

"We've said all along, for there to be an extension, Phase I is going to
have to demonstrate that it has the financial capability to pay for itself,"
Snow said.

"The federal government said they'll have to see good financial capability
and technical capability before they put money into it.

"If they can't bring the projected dollars into this project, there's no way
taxpayers can make up the difference. The thing that made it so attractive
to us was that we could have a transit system that can be paid for by
itself."

Institutional flaws are suspect behind most of the monorail's problems,
which prior to Wednesday's failure included the following:

• A wheel that fell from a moving train on Sept. 1, prompting a six-day
shutdown. The wheel was found to have been improperly installed during
manufacture, and Bombardier workers ignored 149 alarm warnings
indicating a problem with the system one day before the incident.

• On Aug. 16, a door to a steep drop-off from elevated tracks was
inadvertently opened by a worker.

• On Jan. 5, a drive shaft fell from a moving train during testing. That
incident has strong similarities to Wednesday's failure.

• Chronic glitches in the train's computerized steering system pushed back
a targeted Jan. 20 rollout date to July 15. For that, Bombardier and co-
builder Granite Construction Co. of Watsonville, Calif., were assessed $11
million in fines.

"These events are unacceptable to the monorail company, and we're
looking to Bombardier to resolve them," Gibson said. "In all candor, we
couldn't help but have serious questions about Bombardier under these
circumstances. It's their responsibility to demonstrate we should have
confidence in them."

Michael Shaman, Bombardier's vice president for operations, expressed
regret over the problems and vowed a fix would come, though he admitted
he was puzzled over the broad failures in his company's monorail division.

Those failures might be the biggest mystery for a company with a strong
reputation in transportation, with high-profile products and clients that
include Lear Jet corporate planes, Sea-Doo watercraft, subways in
London and Montreal and airport monorails in San Francisco, Dallas and
Atlanta.

"There's a lot of concern on my part. We have to get away from the
reactionary mode and get to the proactive mode," Shaman said.
"Bombardier has never walked away from its obligation to deliver a
product that meets customer satisfaction. We're going to get this right.
We're not going to walk away from this."

Bombardier is paid based on its ability to run a working system each day,
with the contract being worth more than $10 million annually if all
conditions are being met. Daily payments are suspended.

That, along with a $20 million-plus contingency fund, is helping local
monorail officials weather a lack of revenue. So far, bondholders,
advertisers and resort corridor hotel "partners" have not bailed from the
rail line, Gibson said.

What may be harder to overcome is any harm to the reputation of the
system as a result of the problems, which have been reported nationwide
and might affect the future ridership needed to keep the system fiscally
afloat.

"Of course, we're concerned about the reputation of the system," Gibson
said. "Our hope is, in the same way the word has gotten out that the
system has problems, the word will get out that we've fixed them."

Dumping Bombardier is not on the table, for now.

"We haven't moved to discussions like that at this point," Gibson said.



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BUSINESS WIRE
Sept. 10, 2004

Fitch Places Las Vegas Monorail, NV 1st Tier Bonds on Rating Watch
Negative

NEW YORK--(BUSINESS WIRE)--Sept. 10, 2004--Fitch Ratings places
the $451.4 million in outstanding Director of the State of Nevada
Department of Business and Industry Las Vegas Monorail project revenue
bonds, 1st tier, series 2000, on Rating Watch Negative. The underlying
rating on the bonds is rated 'BBB-' by Fitch. The bonds are insured by
Ambac Assurance Corporation, whose insurer financial strength is rated
'AAA' by Fitch.

Fitch's action reflects equipment problems that have led to the closing of
the Las Vegas Monorail on two separate occasions since its delayed
opening in July. After a wheel fell off a monorail train on Sept. 1, the
system was shut down for inspection for a period of six days. The
monorail reopened on Sept. 7 and then was closed down the following
day after it was discovered that a flange fell off one of the trains. At this
point, the extent of the problem is unknown. The Las Vegas Monorail Co.
(LVMC), the non-profit public corporation responsible for the project, is
investigating the nature of the problem to determine whether it is an
isolated event or a systemic issue. LVMC has indicated that Bombardier,
the manufacturer of the trains and monorail operator under contract to
LVMC, is strongly committed to solving the on-going equipment problems.
An opening date for the monorail is currently unknown. Even if the
monorail returns to operation soon, Fitch will look for an extended period
of reliable operations given a pattern of system equipment problems that
go back to late last year.

The availability of about $30 million in uncommitted construction funds,
the debt service reserve fund, and $12 million in collected liquidated
damages provide an important near term offset to the monorail's
equipment problems. The availability of capitalized interest to cover debt
service payments through January 2005 is also an important rating
consideration. Nevertheless, an extended closure of the monorail and/or a
continuing pattern of service interruptions could lead to a downgrade of
the 1st tier bonds.

LVMC reports that average daily ridership while the monorail was
operating during its first 17 days was 30,811. Although this is about 55%
of levels forecasted for the first full year of operations, it is not 
necessarily
inconsistent with Fitch's expectation for ramp-up of demand for this
facility. Fitch will continue to monitor the monorail's ridership. The rating
on the 1st tier bonds may also be negatively affected to the extent
ridership levels do not ramp-up adequately or perceived safety concerns
constrain ridership growth.

The 1st tier bonds are limited obligations of the director of the department
of business and industry, payable from and secured by a pledge of senior
loan repayments, derived from monorail fare and other operating
revenues after operations and maintenance expenses and prior to the
payment of second-tier and third-tier bonds (neither of which are rated by
Fitch). The monorail project consists of the upgrade of an existing 0.8 mile
monorail between the MGM Grand Hotel and Casino to Bally's Hotel and
Casino and construction of three miles of new guideway from Bally's north
to the Sahara Hotel and Casino. Seven stations are located along the
alignment serving major hotels, attractions, and the Las Vegas
Convention Center along the Las Vegas Strip.

Fitch Press Release: Fitch Ratings, New York
Scott Trommer, 212-908-0678
Cherian George, 212-908-0519
Kenneth Reed, 212-908-0540 (Media Relations)