LAS VEGAS -- Drilling began Friday for a $52.5 million underground people mover being built by a company backed by billionaire Elon Musk to whisk passengers between exhibit halls at an expanded Las Vegas Convention Center.

Officials showed reporters a tunneling machine that was assembled in recent weeks 40 feet (12.2 metres) below ground to create twin horizontal tunnels for a transit system offering conventioneers an approximately one-minute trip in self-driving electric vehicles between three exhibit hall and parking stations.

Steve Davis, president of Musk's The Boring Co., called the project the first commercial application of a tunneling system that he said was just an idea a year ago.

Vehicles are expected to carry up to 16 people each -- up to 4,400 passengers per hour. Work is expected to be complete by January 2021. Rides will be free.

The system is being called a key to an ongoing $1.5 billion convention centre expansion and renovation that includes adding a three-story, 1.4 million square-foot (0.13 million square-meters) building across the street from the existing single-story convention centre.

The current facility, with 3.2 million square feet (0.3 million square meters) of exhibit space, is already among the largest in the U.S. It has more than 1.3 million attendees annually.

Officials said the people mover will have station elevators and escalators, video surveillance systems and cellphone and internet connectivity.