By David Shepardson

WASHINGTON, June 28 (Reuters) - Chicago Mayor Rahm Emanuel met with senior U.S. Department of Transportation officials this week to discuss a plan by Elon Musk’s Boring Co to build a $1 billion underground transit system, officials confirmed on Thursday.

The hour-long meeting on Monday in Washington at the department's headquarters, which has not been previously reported, focused on the plan to send people from Chicago’s downtown Loop district to O’Hare International Airport at 150 miles (241 km) per hour, a spokesman for the U.S. Transportation Department said.

The system will travel the 17 miles (27 km) from downtown to O’Hare, one of the world’s busiest airports, in 12 minutes, Emanuel said on June 14. The trip currently takes 30 to 45 minutes.

"Mayor Emanuel provided DOT officials with an update on the Chicago Loop project. Chicago reaffirmed that there will be no federal funds involved. All parties agreed to work together and stay in close communication," a spokesman for the Transportation Department told Reuters Thursday.

Emanuel met with Federal Railroad Administrator Ron Batory, Under Secretary of Transportation for Policy Derek Kan and other officials. Among the issues discussed were what specific type of environmental review the project will need, what Transportation Department agency will oversee the project and if the department would tap a specific person to oversee permitting approvals, officials said.

Matt McGrath, a spokesman for Emanuel, decline to comment.

The project is expected to cost around $1 billion, Reuters reported on June 14, citing sources. Emanuel said the project will funded by the company with no taxpayer subsidies, and added that in conjunction with O’Hare’s planned $8.5 billion expansion, it will fuel Chicago’s economic growth.

Drilling for the project, pending regulatory and environmental approvals, could begin in as soon as three to four months, said Musk, who also founded and heads luxury electric car maker Tesla Inc and rocket maker SpaceX. It could be operational 18 to 24 months after that.

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The Boring Co has been promoting its plans for Hyperloop tunnels that would allow high-speed travel between cities, such as travel from New York to Washington in less than 30 minutes.

Musk unveiled a plan last month in Los Angeles to build tunnels beneath the city for a high-speed network of “personalized mass transit,” promising to build it without disturbance or noise at the surface.

The Chicago and Los Angeles projects come as Musk wrestles ramping up production of the Tesla Model 3. Some investors are concerned his leadership roles at Boring and SpaceX have spread him too thin. (Reporting by David Shepardson Editing by Marguerita Choy)