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The Chunnel was also built by governments with contractors, subcontractors, sub-sub contractors and so on.

With SpaceX Elon has demonstrated an ability to reduce costs by a factor of 10 in large part by eliminating the use of contractors. If you look on the PandoDaily interview, just before the Hyperloop is discussed he was railing on about how inefficient the 405 highway expansion is. I wouldn't be surprised if he thinks that he could save an even bigger factor in that kind of public work than he did with SpaceX.

I'm not saying that he's right. I'm saying that his cost projections are extremely unlikely to start with existing construction projects as a base line.

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