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Las Vegas Approves Boring Tunnel Deal

Friday, May 24, 2019

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The Las Vegas Convention and Visitors Authority approved a $48.6 million contract with The Boring Company earlier this week for construction on the LVCC Loop. The Boring Company was originally approved for construction by the Authority’s board of directors in mid-March.

According to TechCrunch, this is the company’s first commercial contract. The final cost of the project is slated to total $52.5 million.

Project History

The Boring Company completed its first test tunnel in November 2018, located in Hawthorne, California, for $10 million. The tunnel is a 1.14-mile-long test track that began at the parking lot of Space X’s Hawthorne, Los Angeles, headquarters, and ended at what will eventually become O’Leary Station.

The tunnel is expected to transport passengers 155 miles per hour. Once a vehicle is lowered onto an electric skate by elevator, it will be entered into Hyperloop—a reduced pressure tube that could shoot pod-like vehicles faster than an airliner.

The Pitch

The LVCVA selected The Boring Company as one of the firms to enter into exclusive contract negotiations to design, construct and operate a Loop system for the Las Vegas Convention Center. The loop is to provide a fast and convenient transportation option for convention and trade show attendees on the LVCC campus.

According to The Boring Company, a typical walk from the New Exhibit Hall to the existing North/Central Hall averages about 15 minutes; the same trip through the LVCC loop will take approximately one minute. Once inside an AEV, which are Tesla Model X and Model 3 vehicles, the modified chassis will be able to transport up to 16 passengers with sitting and standing room at 155 miles per hour.

The company goal is for the system to debut by January 2021, before the Consumer Electronics Show.

Contract Award

The Campus Wide People Mover, the project’s initial design, is focused around the convention center. The Authority estimated that visitors would have to travel 2 miles from one end of the convention center to the other, a distance that warranted the transportation solution.

The approval comes with caveats, however: According to The Guardian, two-thirds of payment will be provided only once construction is complete. If the system does not carry enough passengers, there is also the chance for penalties to be incurred. The contract includes building two 0.8-mile tunnels and three underground stations at the convention center.

The Boring Company’s fixed-price contract clocked in at a fraction of the $215 million bid for an elevated rail system. More funding will be made available as the company continues to hit milestones: $2.5 million for excavation of the first station and $3.2 million for completing the first 100 feet of tunnel. All system infrastructure will have to be built on payments that total less than $14 million. If the system cannot support full passenger capacity during the first year and a half of operation, The Boring Company faces a penalty of $300,000 per event, which caps at $4.5 million.

“The backbone of Las Vegas is tourism and convention center business,” said Las Vegas Mayor Carolyn Goodman. “Don’t put anything at risk that risks tourism and conventions."

   

Tagged categories: Contractors; Contracts; Government; Infrastructure; NA; North America; Program/Project Management; Tunnel

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