German investment in maglev train questionable

Friday, May 26, 2000 | 10:12 a.m.

German government leaders were impressed with Nevada's bid to build a magnetic levitation train between Las Vegas and Primm.

But they stopped short of saying they wanted to invest in it. And that's the guarantee the California-Nevada Super Speed Train Commission (CNSSTC) wants in order to press ahead on the first 40 miles of a 272-mile, $6.8 billion system linking Las Vegas with Anaheim, Calif.

Speaking through an interpreter, Gerhard Rubenkonig, a member of Germany's parliament and a representative to the budget committee, said the government couldn't directly invest in an overseas project. He said the government's involvement would be in facilitating meetings between Germany's private sector and American project developers.

That's a disappointment to Jack Libby, chairman of the CNSSTC, which played host to four German parliament members and two government administrators this week. Libby was hopeful that some of the more than $3 billion the German government plans to spend on maglev technology could be invested in the Nevada project.

Rubenkonig said he and his colleagues were impressed with the CNSSTC's plan to break ground by January 2002 and have a train in operation by May 2005. The German delegation was well enough informed in advance on the Nevada proposal that it scrapped a planned field trip to Primm Tuesday morning and instead heard briefings from the contractors who plan to build the system that could whisk riders from Los Angeles to Las Vegas in an hour and a half.

A series of videos, slide presentations and speeches -- many of them translated to German -- dominated the Tuesday business meeting. Monday night, the German delegation was honored at a reception by mayors and council representatives from cities along the train route, then taken to the Siegfried & Roy production show.

The message was clear to the Germans -- as an entertainment hub, Las Vegas hosts millions of visitors, many of whom would enjoy getting a look at the maglev technology developed by the Germans.

Speaking at the close of Tuesday's meeting, Rubenkonig said a maglev demonstration project in Germany was shot down earlier this year because officials believed there wouldn't be enough riders to make the project financially viable.

But the Nevada project, he said, offers a number of positives -- high exposure and minimal right-of-way and environmental conflicts. As one of the videos on the project, "The First Forty Miles," pointed out, one of the attributes of Southern Nevada is that it has plenty of nothing -- undeveloped land that could accommodate an elevated track energized with electromagnetic fields that could propel a train at 300 mph.

Another company that made a presentation at the meeting was MGM Grand Inc., which owns the three resorts at Primm. Those properties are key to the success of the first leg of the track, since Primm is at the terminus of the route. Two golf courses the company owns near Primm would suddenly be 20 minutes away if the maglev were in place.

Other partners involved in the venture are the American Magline Group, a team of companies with different roles in the project. They include Transrapid International, the German company developing the vehicles, General Atomics, San Diego, which is building the propulsion system, and Hirschfeld Steel Co., San Angelo, Texas, which would manufacture the guideways.

Libby also said the commission will seek partnerships with casino properties and is talking with the Howard Hughes Corp. for land to develop a train station near the Beltway interchange at Interstate 15.

Libby also outlined the project financing. The CNSSTC listed $855 million in federal funds the project would get if it is the successful applicant among seven U.S. cities seeking funding. The project also plans $238 million in bonding authority to be secured by farebox revenues, which are estimated at $85 million a year.

That's less than half of what the commission needs to build the first leg, which would have a total overall cost of $16 million per mile. That's why the CNSSTC was so interested in getting the Germans to participate in the effort.