Delays in opening of monorail could be costly

Monday, March 22, 2004 | 9:35 a.m.

Officials say they don't know how much the latest postponement of the long-awaited Las Vegas monorail opening will cost.

Executives with the company contracted to run the monorail announced Friday that the monorail probably won't start carrying passengers until late June at the earliest.

The system had initially been slated to open in January, but it still has bugs that need to be worked out before it will run smoothly for the millions of visitors that are expected to ride the monorail, officials said.

"We're still in the testing and commissioning phase," said Jim Gibson, chairman of Transit Systems Management, the private partner and manager of the monorail system for the nonprofit Las Vegas Monorail Co. "There's fine tuning of the ride quality. There's fine tuning of the noise issues."

And the work continues on software that controls the 3.9-mile, $650 million system.

"The most important point of all is the automated train control system," said Gibson, who also is mayor of Henderson.

One aspect of the delays could impact at least the monorail company and bondholders -- primarily the eight hotels that the system connects, said Srinivas Pulugurtha, assistant director of the Transportation Research Center at the University of Nevada, Las Vegas. More than 1.5 million visitors a month were expected to ride the system, and those tickets now cannot be sold.

Another potential financial impact could be on the consortium of companies, including Montreal-based Bombardier Transportation, building the system. Gibson said the potential "liquidated damages" for failure to open the system on time are $85,000 a day.

The contract for the system specified a Jan. 20 opening day, but Gibson emphasized that the deadline did not take into account design-change orders or other factors that could affect the liquidated damages.

The final penalties, if any, would be determined after negotiating with the construction partners, he said.

"Those are the things that you work on last," Gibson said.

Helene Gagnon, a spokeswoman for Bombardier, said the company is not now focused on the prospect of damages.

"Our focus is really on opening the system," she said. "We're not concerned with other outstanding issues.

"If there are outstanding issues, we will deal with that later," she said.

Mary Riddel, associate director of UNLV Center for Business and Economic Research, said the monorail will appeal to visitors but the short-term economic impact would be limited.

"The economic impact is not going to be large," she said. "Really, it's more about shifting dollars than creating dollars."

The impact might be bigger, in a negative way, if the system did not work well and tourists were disappointed with their experience, Riddel said.

Clark County Commissioner Bruce Woodbury, who also serves as chairman of the board of the Regional Transportation Commission, said the frustration of some people to get the system into service is natural.

The RTC is a partner with the Las Vegas Monorail Co., and plans to extend the system to downtown Las Vegas within a few years.