That number sounds bogus to me too. Even a water tunnel through the Coast Range (smaller, single bore, with less other stuff involved) would cost more than that. Smells like something Elon Musk would come up with: we can do tunnels great, cheaper than anybody else (they're smaller than you want, though, and all I'm quoting you is the cost of running the boring machine that far in plain, easy ground, no hard rock, no weird water, no undocumented utilities or other things that have to be moved out of the way, whatever; everything that you need to actually USE the tunnel is extra).