Monday, May 10, 2004
Copyright © Las Vegas Review-Journal

Fines, missed deadlines add up

Monorail builders promised to have line open Jan. 20

The 4.4-mile monorail line will run behind the east side of the Strip from Sahara Avenue to Tropicana Avenue. Regional Transportation Commission officials said about $120,000 in daily fare box revenues will be needed for the monorail to break even after it starts running. Photo by John Gurzinski.

Las Vegas Monorail contractors racked up nearly $8 million in fines by late April and are being docked another $85,000 per day because of the rapid transit line's late opening.

"There is a total that's running," said Todd Walker, a spokesman for monorail manager Transit Systems Management.

The threat of fines began Jan. 20, the date the monorail's builders, Bombardier Transportation of Montreal and Granite Construction of Watsonville, Calif., promised to have the line open to the public.

After a 45-day grace period, the assessment of fines began, Walker said.

As of April 20, roughly $7.8 million in fines had been levied, of which more than $2 million has been paid by Bombardier and Granite to the monorail's owner, the Las Vegas Monorail Co., Walker said.

The amount of the fine is roughly split between Bombardier and Granite, Walker said.

Bombardier said it has been paying fines on a weekly basis and had bought an insurance policy to cover them.

"Right now, we're really focusing on getting the testing done and getting the system open," said Helene Gagnon, a spokeswoman for Bombardier.

That's been a challenge, as it has proved trickier than originally thought to outfit, test and open Southern Nevada's first rapid transit line, using high-tech driverless trains.

After January, officials aimed for a March 1 opening, then hoped for a service start before the end of March.

Now, officials expect to have the system opened to fare-paying riders sometime before the end of the summer. The contract for Bombardier and Granite to build the monorail included bonuses if the rail line opened prior to Jan. 20, Walker said.

The penalties were put in place to protect bondholders who bought $450 million in bonds that helped underwrite the $650 million project.

The delay has not affected the bonds or the project's overall finances. "We're still under budget," Walker said.

Regional Transportation Commission officials said about $120,000 in daily fare box revenues will be needed for the monorail to break even after it starts running.

In recent weeks, monorail engineers have been handling software glitches on the driverless train system.

"All of those have been resolved. We're moving forward," Walker said. "We're confident the system is opening this summer."

Officials expect a demonstration period to start soon, Walker said. "We'll operate the system as if it was open to the public," he said.

After the system is open, monorail owners and builders probably will meet and decide whether the fine total is fair, Walker said.

"We're confident any financial considerations will be discussed and settled between the parties after the opening," Gagnon said.

The 4.4-mile monorail line will run behind the east side of the Strip from Sahara Avenue south to Tropicana Avenue. Extensions are planned north to downtown Las Vegas and south to McCarran International Airport.