Raytheon PRT Prospects Dim but not Doomed

by Peter Samuel

October, 1999



Posted with the permission of the author

Raytheon’s PRT 2000 project manager Steve Gluck says markets they hoped to

find for their automated people mover system have not materialized. Contrary

to some reports, he says, the company has not made any decision to terminate

the program, though he says this is quite likely around the end of the year,

if they cannot find a "strong, early prospect" within the next ten weeks or


(PRT stands for Personal Rapid Transit and describes elevated guideway

carried driverless cars holding 2 to 4 persons each which are designed to

transport passengers non-stop to their destination. Other automated people

movers as used mainly at larger airports operate more like public transport

or transit in that they use bus or train sized cars and stop at all stations.)


[For background on the PRT 2000 project, see a previous article by Peter Samuel]


"We are coming to a critical point, where we have to make a tough

decision. It is not looking very promising, but we remain in dialog with

potential customers," said Gluck, whose title is Manager Surface

Transportation, Raytheon Company Electronic Systems Division. "We are

disappointed but not discouraged. We are still working on this. Interest from

potential customers remains very high. We keep getting requests to see it."

He said that Rosemont, Illinois near to Chicago’s O’Hare International Airport remains

the best prospect for a PRT 2000 initial system.


Raytheon announced it is writing off $6m of the costs of the PRT project

as a loss in its latest quarterly accounts.[see Raytheon press release]


"We remain in discussions in the hope we can come up with an acceptable

financial model that would support construction and operations at Rosemont,"

Gluck said. The Chicago area Regional Transport Authority (RTA) entered into

an agreement with Raytheon several years ago to develop the PRT 2000 system

and contributed $21m towards development. Raytheon has also spent $45m of its

own money to develop the system, which involved a large software writing job,

construction of three full-scale prototype cars and a test track with many of

the curves, slopes and other features of an operational track, and two years

of operations and testing using the three prototype cars. RTA’s contract with

Raytheon provides that it will get 1.3% of any future sales revenues. If the

project is abandoned it gets property rights to the technology.


Gluck admits that cost has been a difficulty. Raytheon originally hoped

to be able to develop a system that complete with guideway, vehicles,

stations and all, could sell for less than $20m per km ($30m/mile) - roughly

half the cost of conventional technologies such as light rail.

"We think the system we have now gives greater functionality (than light

rail) at about comparable cost," said Gluck acknowledging that the cost now

runs closer to $30m/km (over $40m/mile). At these costs prospective farebox

revenues would not support bond financing of construction.


"With further development, and value engineering it will probably be

possible to get the cost down somewhat in the future," said Gluck but he

acknowledged it was difficult to see projects being viable without some

degree of support beyond fares, as once envisaged.


The Village of Rosemont and the RTA have said cost has been a factor in

their inability to reach an agreement with Raytheon. Rosemont is prepared to

foot the bill for right-of-way, utility relocations and construction of

stations, but has not been prepared to take on any of the operating or

financial risk. The RTA’s chairman Thomas McCracken once an enthusiastic

advocate of the project has grown more reticent about it in the past year. He

told associates late last year that he would not propose a further commitment

of money to the RTA board because he did not think he could get the votes.


Plans have been for a 5km (3.5 mile) long track connecting the Rosemont

Blue Line rail station, a convention center, a theater and two office

complexes. There would be seven or eight stations. The cars which seat four

passengers are designed for a speed of 48km/hr (30mph) and stop at off-line

stations allowing other cars to zip by without being held up. Raytheon has

said the cost of this system would be $124m.


Veteran PRT designer and former engineering professor at the University

of Minnesota, Ed Anderson, who had patented his own PRT design (see TAXI 2000), criticized

Raytheon for allowing their system to grow in size, weight and cost as far

back as 1996, predicting this would make it difficult to develop a marketable

system. He argued for 2 or at maximum 3-person cars and a lighter guideway.


But Raytheon officials said the 4-person cars were necessary to meet

wheelchair carrying requirements and that the longer and wider wheelbase was

needed to provide a smooth comfortable ride and meet safety standards.

Everyone involved seems to agree that the Raytheon system performs as

promised. A 600m (2,000’) long test track with one off-line station was built

in the Raytheon grounds in Marlborough Massachusetts, and began operations in

July 1996. Various single car operations including emergency stops and bad

weather tests followed. Small changes were made to improve the ride. The

single car operations were followed by multiple car operations in which

merging and headway controls were tested and refined. Gluck said the present

system operates to a 5 second headway between cars. Development was declared

accomplished late summer last year (August 1998) after five consecutive days

of continuous 16-hours/day operations were successfully performed.


The test track continues to be used for demonstrations but Gluck says

that the company will consider decommissioning it when it reviews sales

prospects around the turn of the year.


Gluck told us Raytheon is willing to license or sell the PRT 2000

technology to any company that is capable of following through with it. But

it is also willing to reconsider its likely withdrawal from the business "if

any prospects rise to the level of imminence" in the next couple of months.

In Amsterdam, Holland and at the Seattle-Tacoma airport in Washington

state authorities have expressed great interest in PRT 2000, Gluck says, but

are firm that they will not be the first to deploy the technology. In South

Korea there are also prospective purchasers of the system, but nothing firm

enough at this point. Gluck says the economic downturn of last year was a

major setback to Korean companies that might have partnered with Raytheon to

develop systems there.


In Irvine, California and at Boston’s Logan airport the authorities were

interested in PRT but eventually passed. Boston will make do with shuttle

buses and Irvine will do old-fashioned light rail. Gluck says there a couple

of other prospects that he cannot reveal.


At the Village of Rosemont chief engineer Chris Burke says PRT is a great

concept for the area. In terms of potential ridership he says the PRT project

is "more viable than ever." Expansion of the convention center, new offices

and a proposed casino all offer the prospects of larger passenger loads than

when the PRT studies were done.


"This is becoming a very dense area, quite suitable for a (PRT) system."

But, Burke says, Raytheon has to take responsibility for maintenance

costs "They are the only ones who know how strongly it is built, how

reliable the system software is. The position of the mayor, the Village Board

and all of us here in Rosemont is that we can’t quantify the costs of

maintenance and operations. We aren’t prepared to take those risks with an

unproven technology. It could well be a lifetime of aggravation and expense

for us. Many of these new systems cost a very significant amount to keep in



Burke said that the Matra people mover system at O’Hare airport has been

an "ongoing nightmare" for the city of Chicago to maintain and that other

people mover systems that he has been in contact with in Texas and elsewhere

often cost "an order of magnitude" more to keep working than was expected.

He said the cost of Raytheon PRT had gone up significantly "I am sure

that as with a Patriot missile or some other thing they make that Raytheon

really did hope and believe they could make the PRT for the price they

originally quoted. But things often don’t work out, and like a Patriot

missile it ends up much more expensive."


Burke says that Rosemont and the RTA have not been in touch with Raytheon

for many months "We haven’t heard from them. They just haven’t been back

with any proposals. We read in the newspaper here that they were pulling out,

but if they are not, and if they can come up with something new, we’ll

certainly be interested to look at it."


The city engineer said the situation is "most frustrating" because the

PRT concept is good, but there have to be much better cost and performance

warrantees from the manufacturer. Burke said the RTA's position is the same

as the that of Rosemont.


Gluck at Raytheon told us if there is a go ahead on an operational system

another $10m to $20m would be needed to refine the design of the guideway and

the mechanical components of the cars to take them from the prototype to the

manufacturing stage. Another subsidiary Raytheon Engineers and Constructors

would probably take on much of this work.


It seems unlikely the company will commit that money without an assured

sale, and it won’t make that sale without a more attractive operations,

warranty, and construction deal for the first customer. Given the financial

pressures on the company in its core defense and radar business this seems a

long shot. (Contacts: Steve Gluck, Raytheon, 508-490-1421, GluckS@raytheon.com;

Chris Burke, Village of Rosemont, 847-823-0500, cburke@cbbel.com), Peter Samuel can be

contacted by phone at 301-631-1148.


Last modified: May 27, 2001