Colorado Economic Models 
Even low ridership will produce a small profit and
large ridership will produce a "cash cow"   
Here is our business case:

 

PLATTE VALLEY
SALES MODEL

 

Skyways will finance $88 million to build a 5 mile operating demo somewhere (preferably in the Platte Valley) and use it for future sales. Returns from this one operating demo  are estimated at $2 million per year to start and growing @3.5% p/y to $12 million.

 

 

DENVER TECH CENTER

 

Costs $75 million for 5.5 mile one lane Guideway with DTC. This one has an example (BID) District Financing.

INTERSTATE 70

 

Cost $1.8 billion for 120 miles of dual track  with earnings of 10 -15% possible  over 25 years


Political Approval Feasibility 

The decision makers are a large part of today's gridlock. Our strategy is to invite the local transit agencies to participate but still go straight to the people for voting on our project's  "Public Franchises" to build private sector operating systems for the following: 

1. Sales Model  
2. CDOT-Statewide links on both Interstates.  

This public consensus building can be faster and more affordable through the use of our web site to inform and interact with the public. In our $500,000 marketing budget from the venture capital phase, we allocate significant funds to educating the public through advertising and print materials describing our web site. Our web site will tell the story, interact with users in discussion and polling buttons, store all records, and market the funding. The public will have access to as much information as they can digest and decide quicker. The Franchises will give the project an entitlement and speed up governmental supporting services such as  Rights-of-Way station zoning, building permits, building inspections, public safety, insurance and road access.

 

Market Feasibility  (See Marketing)

Automation Offers Profits

In a typical government funded system there is little incentive to reduce the labor costs. Up to 75% of the operating costs can be reduced through automation to 20%.  All this savings flows down to the bottom line and can be passed on to investors. With lower construction costs in the $10  million per mile range, smaller systems can be profitable with ridership in the range of 10,000 per day average.

Economic Feasibility  Modeling

This section models the various legs of a conceptual Colorado Network. The first leg is a Metro connector to DIA followed an I-70 leg  from downtown Denver to Beaver Creek and finishing with an I-25 leg. These spreadsheet models calculate the magnitude of business necessary for a market rate return on investment (ROI) from 10 to 15% after taxes.  Our conclusion is that even low ridership will earn a small profit. The major breakthrough proposed in this project comes from both the use of computer assistance to automate the controls that operate the cars and from the low cost to build.   This project demonstrates an affordable erector set of Guideway components that can be used in a variety of solutions and eventually linked together. Because of our switching capability these linkages can eventually grow into a metro web offering greater coverage and service to your door.  Because of automation,  the cars are driverless, thereby saving the high cost of labor in other transit systems. In contrast RTD in Denver spends the majority of its budget on labor such as drivers who handle 30 passengers at a time. That is a major factor in pushing for conventional light rail where the drivers handle hundreds of passengers at a time. But conventional light rail equipment is very expensive and potentially interferes with automobile traffic. Whenever light rail is elevated above automobile traffic, the massive support structures drive up costs to $ 20 to $30 million per mile (e.g. Miami). The other breakthrough is the lower cost of constructing a new light weight Guideway which are significantly smaller and less costly than conventional or light rail. Small cars of 6 to 15 seat cars are automobile weight and can be supported with Guideways which cost only $ 2 to $3 million per mile. This is model is not an indication of how much money such a project will earn. Instead, it illustrates the magnitude of business necessary to earn a 10 to 15% return on investment (ROI) per year average over 25 years after taxes.. This is considered the threshold necessary to attract private capital. Bonds are always an alternative, but they limit the amount of return to the investor. Our calculations show why equity will earn much more for investors in the long run from a combination of increasing ridership and fares.


 

 
 

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