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    Maybe we need to get Elon involved: Just an interesting read for some who may have the time

    New York to Washington in 29 minutes certainly would be a game changer, but there’s something more pedestrian going on here, too. Musk likes to portray himself as an engineer and a dreamer—that’s what underlies the Hyperloop talk—but his real business play is taking on the exorbitantly high cost of infrastructure in the US.
    Consider: New York City’s newest subway line, the Second Avenue extension in Manhattan, hums along underground at 15.4 miles per hour, or about 22.6 feet a second. And in each second of your luxurious $2.50 ride under the Big Apple, you cruise past $518,160-worth of tunnel.
    That’s not a typo. Each one of the two miles of extension cost an astounding $2.73 billion. Tunnels are never cheap, but per mile the new subway line is the most expensive in the world. For comparison, digging all the way across the English Channel, a full 23.5 miles, cost around $30 billion in today’s dollars, or $1.3 billion per mile. Madrid managed to complete a subway expansion in 1999-2003 for a mere $104 million a mile (although it was not all underground).
    The high cost of tunneling under America

    Building tunnels in the US is more expensive than anywhere else in the world by a huge margin. (Although Australia isn’t cheap either.) For the majority of us that might at most be an interesting fact for some truly lame cocktail party conversation, but if you’re a billionaire industrialist, a cost differential of 10x between industrialized countries for a basic service smells like money. Which is why Elon Musk is currently dreaming about ways to build tunnels under LA.
    The Boring Company arrived in April, launching with a video announcement on YouTube. The short clip showed a car (a Tesla, of course) darting through Los Angeles traffic, only to pull into what looks like an oversized window-washing cart, which is then sucked into an underground tunnel, and whisked to its final destination, unimpeded by gas-consuming dinosaurs.

    Musk’s electric sleds are the vision part of his transportation-business plan—something that looks like a Jetson’s-level technological advance and would probably blow away a potential investor. But the real engine of this project, the place where Musk can actually make a ton of money, is in figuring out how to reduce the bloated cost of digging a tunnel in the US. If someone could figure out how to dig a tunnel in the US at the same cost they can do it anywhere else in the world, they’d make a fortune, and win contracts for any tunnel project in the country.
    This is the exact type of market inefficiency that investors and hedge fund operators look for. If, for example, investors notice that oil costs 10 times more in Canada than anywhere else in the world, they’ll see it as a safe bet that oil there is overpriced, and will fall in the long run. But most of those bets are just that—a gamble on something outside investors’ control. It’s rare to have the gravitas and resources to actually change how a market or an industry works, like actually repricing the oil in Canada. And that’s what Musk hopes to do to tunnel digging in the US.
    One reason tunnel digging in the US is so pricey is that labor costs there are much higher than in most other parts of the world. Productivity is also higher in the US, and major strides are being made on making burrowing machinery more efficient; Musk has talked about increasing the power of drilling machines and automating tunnel reinforcements, all of which would increase speed.
    But to be successful, Musk doesn’t have to do any of that. He merely has to avoid what is actually causing the exorbitant costs in the US market: a combination of how few drilling companies there are in America, the inefficiencies of governments (the only real buyers when it comes to tunnels), expensive union contracts, and onerous governmental regulations.
    Musk has already done this once, to massive success.
 
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