(The Associated Press circulated the following article by Mary Clare Jalonick on March 10.)
WASHINGTON — The head of the Dakota, Minnesota & Eastern Railroad says the company may look for private investors if it doesn’t get a $2.5 billion loan from the Federal Railroad Administration for its massive coal train project.
Kevin Schieffer, the company’s executive officer, said the company could also go public, regardless of the loan.
“I suppose we could take the traditional Wall Street approach,” Schieffer said in an interview with The Associated Press, adding that is only one option.
He said that he has “certainly” received some interest from investors, though he declined to name them.
The DM&E is seeking the low-interest government loan to cover the costs of a major expansion and renovation plan that includes rebuilding the DM&E’s 600 miles of track through South Dakota and Minnesota; upgrading about 250 miles on its sister line, the Iowa Chicago & Eastern Railroad; upgrading 150 miles of track from Wall, S.D., to Colony, Wyo.; and building 280 miles of new line into Wyoming’s Powder River Basin coal fields.
The Sioux Falls, S.D.-based railroad says it could haul 100 million tons of coal a year from Wyoming to eastern power plants.
The loan would come from a little-used program that Sen. John Thune, R-S.D., had amended to be tailored to the railroads’ needs.
Schieffer declined to elaborate on possible plans to take the company public.
“At this point I think it is premature to even know whether such a thing would make any sense at all,” he said. “The endgame here is getting the project built and whatever it takes to get that accomplished is what will drive the strategy.”
The government loan is the “preferred alternative” to private investment, he said, because it would give the railroad the most independence in making decisions.
The project has some detractors. While supporters say the expansion would help business, opponents say it will disrupt neighborhoods, increase traffic and harm the environment.
The project’s biggest opponent is the Mayo Clinic in Rochester, Minn., which is located along the rail line. Clinic officials say they worry a derailment or chemical spill could harm their patients.
Schieffer says the clinic has “steadfastly refused” to negotiate with the rail company.