A Boring Project

Is Elon Musk boring?

TBM that tunneled under Mont Blanc, from Switzerland to Italy. Photo: Cooper.ch. Source: Wikimedia

That’s what I wondered when I read that the tech billionaire just won the bidding to build a high-speed link from downtown Chicago to O’Hare Airport. A year ago Musk announced that digging holes in the ground – using a Tunnel Boring Machine (TBM), the type of excavating equipment that built the 30-mile under the English Channel – had become a personal hobby. He soon proposed building a hyperloop tunnel between New York and Washington, DC. He’s also suggested that tunnels could clear some of the congestion between LA’s airport, Santa Monica, and Westwood.

The concept is appealing – a deep tunnel that could be built below existing infrastructure and would use modern engineering to move passengers at hundreds of miles per hour. Musk suggested that a trip from city-center to city-center on an East-Coast hyperloop tunnel between New York and Washington would take only 30 minutes; the trip from LAX to UCLA would take just 5 minutes.

I’ve always regarded Musk’s ideas with a fair dose of skepticism. His hyperloop seems particularly fanciful, the proposed travelling times unrealistic. But just last week the City of Chicago announced that Musk’s Boring Company won out over several other well-established engineering firms to build a high-speed express train between downtown Chicago and O’Hare Airport. Final details of the contract have yet to be negotiated, but it looks like Musk’s tunneling enterprise has a chance to prove itself. This is The Boring Company’s first attempt to do something big. Currently, it takes about an hour for Chicagoans to catch a CTA train to O’Hare. The goal is to cut that down to 20 minutes.

The project is unusual in that no government money or credit is involved. Musk will need to secure his own funding. This also means that many existing rules about the process can be expedited, since public money isn’t at risk. But Musk will still need to comply with permitting, accommodations, sub-contractor rules, and intricacies of Chicago politics. Real estate and infrastructure development are always and everywhere a political business.

Photo: Curimedia. Source: Wikimedia

Still, the prospect of making O’Hare closer to Chicago is significant. Chicago is a major center for finance, commerce, and technology. Making nonstop flights to Asia and Europe more convenient could just add to its appeal as a sophisticated midwestern city with affordable real-estate and world-class potential.

If Musk can pull this off, he might help change the meaning of “flyover country.”

Douglas R. Tengdin, CFA
Charter Trust Company
“The Best Trust Company in New England”

By |2018-06-19T09:52:00+00:00June 15th, 2018|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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