This news is not surprising and well illustrates the nonsense pandered by the light-metro lobby that grade separated, automatic transit systems themselves attract ridership. Monorails are in fact proprietary light-metros and once one invest with monorail, it is stuck with both monorail and the supplier, which is very bad for future transit planning, with Vancouver well illustrating the many problems that come with our SkyTrain gadgetbahnen.
Despite the hype and hoopla with the 6.3 km Las Vegas monorail, it just did not meet its promoters expectations and with its expensive construction costs and lack of customer popularity, there will be little appetite to fund a much needed $500 million, 5.6 km extension to McCarran International Airport, despite the positive spin in the news item.
The Las Vegas monorail could very well be the harbinger of things to come for the proposed Honolulu elevated light metro!
From Mass Transit website:
Las Vegas Monorail Files for BankruptcyAdrienne PackerLas Vegas Review-Journal (Nevadahttp://www.masstransitmag.com/web/online/Top-Transit-News/Las-Vegas-Monorail-Files-for-Bankruptcy/3$10460
NEVADA – The Las Vegas Monorail Company filed for Chapter 11 bankruptcy Wednesday, one month after representatives of the rail system announced such a move could allow a future $500 million expansion to McCarran International Airport.
Monorail officials said last month that they had three options: negotiate an agreement with bondholders without filing for bankruptcy; file for bankruptcy with the bondholders’ blessing; or file without a new agreement in place.
In 2000, the state’s Department of Business and Industry awarded the company the tax-exempt bonds in a three-tier structure with the company promising revenue after the monorail met the start-up costs.
Monorail representatives told the state it anticipated about 20 million passengers a year who would pay a fee of $2.50 per trip. Its Web site says it has carried 27 million passengers in five years.
Last year, the train carried 6 million passengers and brought in $27 million in fare box and advertising revenues. In prior years, ridership figures hovered between 7 million and 8 million. Company officials blame the sluggish economy for the drop. Las Vegas hosts fewer conventions and attendance has decreased at events in town.
The company was forced to dip into its reserve funds in 2008 in an effort to meet more than $19 million in principal and interest due for the bonds issued by the Business and Industry division. At that time, Fitch Ratings, a New York City-based credit rating firm, estimated the company had $69 million in reserves on hand, down $20 million from 2006.
Curtis Myles, chief executive officers of the company, would not elaborate on a deal forged with bondholders.
“We have been in discussions with bondholders. We have some agreements with some of them; some are pretty confidential,” he said. “They are definitely aware we are filing.”
Chapter 11 bankruptcy means reorganizing the financial structure; a plan developed throughout court proceedings is ultimately approved by a judge or a vote of the creditors. The company’s intent is to lower its payments to bondholders.
Myles said the filing will not effect monorail services.
“We’ll open tomorrow,” Myles said.
Ridership has never met expectations since 2004, when the elevated train began providing service between the Las Vegas Convention Center and Strip hotels. Because the train’s popularity was underestimated, the company has failed to pay off the $650 million in construction and start-up costs.