Thursday, February 18, 2010

Las Vegas Monorail seeks Chinese Backing

From the Las Vegas Sun

(maglev news note)... With the Las Vegas monorail seeking bankruptcy protection, they are currently in hearings as to which section the monorail will fall under, Chapter 9 or 11.  (were not going to figure out which is good or bad for both the monorail or nevada, were the bonds are held)  During these hearings some new items became public knowledge.

"After the hearing, Myles brushed aside rumors that the monorail would attempt to sell its assets to the Regional Transportation Commission, where he served as assistant general manager before taking his current position in 2005.
Instead, he disclosed a multi-prong strategy that includes applying for Federal Transit Administration funds and pursuing a partnership with Chinese investors and government agencies, all for the purpose of expanding the monorail to McCarran International Airport.
To apply for the federal funds, though, Myles said the monorail likely would have to be sponsored by Clark County or another government agency in Nevada.
The China connection began with a five-day trip he took to Beijing in June with representatives of the proposed DesertXpress high-speed train project that would link Las Vegas with Southern California.
Myles said the Chinese officials he met included senior executives with a state-owned bank and a state-owned railway company."

"Myles also defended his $331,000 salary and the $5,000-a-month stipends paid to the monorail’s five board members. His salary in particular, he said, is about equal to what the heads of public transit systems make when benefits packages are considered.
Markell also heard arguments between the monorail and Wells Fargo Bank, which had exclusively managed the transit operator’s accounts until last fall. The bank had began rejecting requests for certain reimbursements — including the $6,700 Myles spent to go to China — arguing that they did not fall under necessary operation and maintenance expenses.
But the monorail, which had begun exploring a restructuring of its debt, opened an account with Bank of America to cover expenses it said Wells Fargo refused to pay.
Wells Fargo, which has been involved since the bonds were issued, stepped up its role as a trustee of the monorail’s funds in 2007 after the monorail defaulted on the bonds.
Markell is being asked to decide whether the bank’s trustee role was violated by the monorail and whether any sanctions are appropriate.
The monorail filed for bankruptcy last month, revealing at the time that it owed $500 million to $1 billion.
Although monorail officials say it makes enough money to pay for ongoing maintenance and operations, it does not earn enough from ridership fares and advertising to pay off the bonds.
The four-mile transit route that runs east of the Las Vegas Strip has carried more than 40 million passengers, but its ridership has fallen far short of initial projections.
Miles told Markell that in recent years, the percentage of tourists who use the monorail has dropped from 20 percent to 16 percent because the transit operator has been spending less money on marketing and because fewer people are flying into Las Vegas.
Traditionally, 80 percent of the monorail’s riders are individuals who fly into town."