Latest / Elon Musk Podcast / Can Elon Musk's The Boring Company Rescue Amtrak’s $8.5 Billion Disaster?

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Can Elon Musk's The Boring Company Rescue Amtrak’s $8.5 Billion Disaster? · Elon Musk Podcast

• 0:00
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  tremendously. Thank you so much.
• 1:26
  The federal government is exploring new ways to rein in
• 1:29
  costs on one of Amtrak's biggest infrastructure projects, Elon
• 1:33
  Musk's tunneling venture. The Boring Company is now in
• 1:36
  talks with transportation officials to potentially take
• 1:39
  over or advise on the troubled Frederick Douglass Tunnel
• 1:42
  between Baltimore and Washington.
• 1:44
  The Frederick Douglass Tunnel was originally expected to cost
• 1:46
  $6 billion. Today, the government believes
• 1:49
  it could balloon to $8.5 billion before it's finished.
• 1:53
  That increase has alarmed the Department of Transportation and
• 1:56
  Amtrak leadership, who have failed to find ways to lower
• 1:59
  costs after years of planning. This failure led the Federal
• 2:03
  Railroad Administration FRA to bring in the Boring Company for
• 2:07
  discussions. Last month, officials from the
• 2:09
  agency met directly with Musk's employees to explore alternative
• 2:13
  tunnel construction methods. The project is meant to replace
• 2:16
  the one or 52 year old Baltimore and Potomac Tunnel, a choke
• 2:20
  point along the busy Amtrak corridor connecting the
• 2:22
  Northeast. As the single largest
• 2:24
  infrastructure effort in Amtrak's history, the tunnel
• 2:27
  spans just 1.4 miles but is crucial to connecting Baltimore
• 2:31
  with Washington DC and points southward.
• 2:33
  Delays in that stretch slow down the entire Amtrak NE corridor,
• 2:37
  which serves millions of riders annually.
• 2:39
  The Boring Company claimed during talks that it could
• 2:42
  execute the tunnel faster and cheaper than current
• 2:45
  contractors. These promises appealed to dot
• 2:48
  leaders who are trying to bring the project back within its
• 2:51
  budget. Musk's firm has long pitched
• 2:53
  itself as a low cost tech forward tunneling operation that
• 2:57
  can outperform traditional builders.
• 3:00
  The existing contractor is a joint venture between Kewitt and
• 3:03
  JF Shea, 2 massive infrastructure companies with
• 3:06
  decades of experience. Amtrak awarded them the job in
• 3:09
  2023, but the work has progressed slower than expected.
• 3:13
  The companies did not issue any public response to news of the
• 3:16
  Boring Company's involvement. Federal officials have not yet
• 3:19
  finalized any new engineering contracts.
• 3:22
  The Boring Company is one of several being evaluated,
• 3:25
  according to the Department of Transportation.
• 3:27
  Nathaniel Sizemore, a spokesman for the department, confirmed
• 3:30
  these consultations and said they are part of a broader
• 3:33
  strategy to find cost saving opportunities.
• 3:36
  Elon Musk's growing proximity to federal infrastructure planning
• 3:40
  has raised questions about conflicts of interest.
• 3:43
  Musk leads six companies, including Tesla, SpaceX,
• 3:47
  Neurolink, XAI, Twitter X and the Boring Company.
• 3:52
  He also chairs the Department of Government Efficiency DIOG, an
• 3:55
  informal advisory group formed under the Trump administration
• 3:59
  to cut federal spending. Musk's influence over government
• 4:02
  decisions has already triggered scrutiny.
• 4:05
  In March, President Trump featured Tesla cars on the White
• 4:08
  House lawn as part of a push for electric vehicle adoption.
• 4:12
  Around the same time, federal officials advocated for broader
• 4:15
  deployment of Starlink, Musk's satellite Internet venture under
• 4:19
  SpaceX, in government operations.
• 4:21
  Musk has also publicly criticized Amtrak, calling it
• 4:24
  inefficient and suggesting that it be privatized.
• 4:27
  At a bankers conference in March, he warned foreign
• 4:29
  visitors not to use the US rail service because it would give
• 4:32
  them a negative impression of America.
• 4:35
  This speech came just weeks before the Department of
• 4:37
  Transportation met with his tunneling company.
• 4:40
  In a separate effort, Musk pushed the FAA to cancel a
• 4:43
  multibillion dollar contract with Verizon for air traffic
• 4:46
  control upgrades. He argued that Starlink could
• 4:49
  provide a better alternative. Shortly after a January crash
• 4:52
  involving an Army helicopter and a commercial plane, SpaceX
• 4:55
  employees were brought into FAA's air traffic headquarters
• 4:58
  to consult on safety improvements.
• 5:01
  Musk has made similar promises before.
• 5:03
  In 2017, he claimed on Twitter that he had verbal government
• 5:07
  approval to build a Hyperloop between New York, Philadelphia,
• 5:11
  Baltimore and Washington, Washington.
• 5:12
  He said it would move passengers between New York and DC in under
• 5:16
  30 minutes. That project never advanced past
• 5:18
  early paperwork and vanished from his company's websites by
• 5:21
  2021. The Boring Company also once
• 5:24
  proposed a 35 mile underground car tunnel between Baltimore and
• 5:28
  Washington. Musk's team claimed it could
• 5:30
  complete that work in two years. That proposal also disappeared,
• 5:34
  with no updates or construction ever occurring.
• 5:38
  The company's leader, Steve Davis, has worked closely with
• 5:40
  Musk to implement the cost cutting directives at DOGE.
• 5:43
  Davis has no background in transportation engineering but
• 5:46
  has long been part of Musk SCORE team.
• 5:49
  Musk named him CEO of The Boring Company in 2018 and tasked him
• 5:54
  with accelerating progress on the company's stalled projects.
• 5:57
  Musk has grown frustrated with Davis's lack of results,
• 6:00
  according to people familiar with internal discussions.
• 6:03
  Although Davis has defended his efforts, saying his government
• 6:06
  work is driven by a desire to reduce waste, critics argue that
• 6:09
  he lacks the technical experience to lead national
• 6:11
  scale transportation efforts. He declined to comment for this
• 6:14
  story. The cost overrun on the
• 6:17
  Frederick Douglass Tunnel has triggered national attention.
• 6:20
  Republican lawmakers, including Senator Ted Cruz and Vice
• 6:24
  President JD Vance, have accused the government of directing
• 6:28
  disproportionate funds toward northeastern infrastructure.
• 6:31
  They argue that southern and western states receive far less
• 6:34
  support for their transportation needs.
• 6:36
  The tunnel itself remains A vital component of national
• 6:39
  travel. Thousands of trains run through
• 6:42
  the existing structure each year.
• 6:44
  Despite the tunnels outdated design and poor condition.
• 6:48
  Engineers have warned for years that its failure could lead to
• 6:51
  major service disruptions from Boston to Virginia.
• 6:54
  Despite the Boring Company's lack of completed US projects,
• 6:58
  it's low cost tunneling methods continue to attract interest.
• 7:02
  The company raised over $900 million in venture capital and
• 7:06
  completed a short tunnel under the Las Vegas Convention Center,
• 7:09
  but failed to scale that model elsewhere.
• 7:12
  Its other proposals, including citywide systems in Chicago and
• 7:15
  Los Angeles, stalled or disappeared entirely.
• 7:18
  This renewed interest in Musk's tunneling company comes at a
• 7:21
  moment when federal infrastructure projects are
• 7:24
  under enormous pressure. Inflation and labor shortages
• 7:27
  have driven up costs nationwide. Rail and Hwy. projects across
• 7:31
  the country face delays, redesigns or cancellations.
• 7:35
  Due to funding constraints, the Department of Transportation has
• 7:39
  not committed to awarding any new contracts to Musk's firm.
• 7:42
  It is still reviewing the results of its consultations
• 7:45
  with The Boring Company and other engineers.
• 7:48
  Any future agreements would require approval from Amtrak and
• 7:51
  likely congressional oversight, given the size of the federal
• 7:55
  investment. The Frederick Douglass Tunnel is
• 7:57
  currently projected to finish by 2035.
• 8:00
  That timeline could change if new contractors are brought in
• 8:03
  or if major engineering decisions are reversed.
• 8:06
  For now, Amtrak continues with the current plan while federal
• 8:09
  officials consider alternatives. The growing overlap between
• 8:12
  Musk's companies and federal infrastructure is already
• 8:16
  reshaping policy decisions. Whether or not the Boring
• 8:19
  Company takes over the Frederick Douglass Tunnel, Musk's
• 8:22
  influence on the direction and cost of American transportation
• 8:26
  is expanding. As his business has become more
• 8:29
  embedded in federal decisions, the separation between private
• 8:32
  innovation and public service continues to shrink.
• 8:35
  The government is weighing whether Elon Musk's tunnel
• 8:38
  company can save billions on a failing Amtrak project or
• 8:42
  whether it adds more risks than rewards.
• 8:45
  I want to say thank you so much for tuning into the show today.
• 8:49
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  please take care of yourselves and each other and I'll see you
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  tomorrow.