(The Associated Press circulated the following by Dirk Lammers on June 14.)
SIOUX FALLS, S.D. — The head of the Dakota, Minnesota and Eastern Railroad said Thursday he’s focused on moving forward with a $6 billion expansion derailed by a denied federal loan.
Kevin Schieffer, chief executive of the DM&E and parent company Cedar American Rail Holdings, responded to a published report that the company is listening to offers for all or part of the company.
Obtaining private financing for the project “is driving everything,” he said.
“Whether in the process we end up partnering with somebody else or whether we end up buying somebody or selling somebody or selling something or buying something, there’s a lot of things that can happen,” Schieffer said. “We’ve got a lot of options that we’re exploring.”
Trains Magazine, in an article posted on its Web site this week, reported that investment bankers representing Cedar American Rail Holdings approached potential suitors and invited 10 to hear presentations by Schieffer during the past two weeks.
Canadian National Railway Co., Canadian Pacific Railway Ltd. and an unnamed shoreline company are among the 10 finalists, according to the article.
Schieffer said anyone on the outside of the process who thinks they have an inside scoop is wrong.
“I read the Trains article and there’s an awful lot of speculation in it, and I guess I’ll leave it at that,” Schieffer said. “We’re just not at the stage where we’re ready to make any announcements.”
Schieffer said he communicates regularly with employees and told them the process would take a while.
The DM&E project, first pitched about 10 years ago, would rebuild 600 miles of track across South Dakota and Minnesota and add 260 miles of new track around the southern end of the Black Hills to reach Wyoming’s Powder River Basin. It would haul low-sulfur coal eastward to power plants.
DM&E, a regional carrier with an east-west line across Minnesota and South Dakota, had sought a $2.3 billion federal loan to help finance the project, but the Federal Railroad Administration rejected the application in February.
The DM&E once hoped to be hauling coal by 2007, but getting environmental and regulatory approvals had proven tougher than it expected.
The project also faced opposition from the city of Rochester, Minn., and its Mayo Clinic, which argued that the additional high-speed trains could threaten the safety of patients at the clinic located a few hundred yards from the track.
Asked about any changes in the scope or model of the project since the denial of the FRA loan, Schieffer said he didn’t want to get into characterizing that one way or another.
“I would just say our focus is getting this project built,” Schieffer said. “We think it’s very important for the entire country and for the state of South Dakota and for our company.”