SLOW Delayed project may open this summer but could add to rail car supplier’s woes. (Photo courtesy of Bombardier)
D

The $650-million, 3.8-mile-long elevated dual-lane fixed-guideway was to begin service on Jan. 20, carrying 8,000 passengers hourly between the city’s convention center and eight resorts. But the date was postponed after a driveshaft fell off a Bombardier train during a test run. Technicians then experienced computer problems with the automated guidance system that have since been fixed.

The line must operate at 98% of its intended capability for 30 days before it can carry passengers, says a spokesman for Las Vegas Monorail Co., the project’s private for-profit owner. Service is now expected to begin this summer, he adds.

A design-build-equip team led by Granite Construction Co., Watsonville, Calif., with Bombardier Transit Corp., a unit of Bombardier Inc., has a $354-million fixed-price contract for monorail construction. The team purchased a 45-day insurance policy against a late opening but now faces $85,000 a day in liquidated damages—$9.26 million to date.

Bombardier, which supplied 36 of its Mark M-VI trains for the project, may be forced to pay most of the penalties. The company’s contract portion, valued at $200 million, entails responsibility for the line’s electrical and mechanical systems. It also has a separate five-year, $56-million operations-maintenance contract.

advertisement
...

“After the opening, we will have to sit down and discuss financial considerations for the design-build team,” says Helene Gagnon, a Bombardier spokesperson. “There are various items that need to be taken into account.” David J. Malutich, Granite’s area manager for the project, had no comment. The problems come at a bad time for publicly traded Bombardier, which recorded a $174-million loss for the quarter that ended April 30. It posted a $54-million profit in the same quarter last year. In March, Bombardier said it would lay off 6,600 employees at its underperforming rail division, about 20% of its work force, and close seven European plants.

Despite troubles, Granite and Bombardier have been awarded a $336.6-million fixed-price, design-build-equip-finance contract for a 2.25-mile-long ex- tension to the monorail, set to finish by late 2007. Bombardier’s contract is valued at $178 million. It has an additional five-year, $87-million operate-maintain contract with two five-year options.

“Obviously the delay does not help the situation, but it doesn’t make us overly concerned,” says Curtis L. Myles, deputy general manager for the Regional Transportation Commission, the agency overseeing the project. “We’re not considering changing the agreement.”

elays on the Las Vegas Strip’s newest attraction, a futuristic-looking high-speed monorail, could spell trouble for Canadian supplier Bombardier Inc.