(The Associated Press circulated the following on June 22.)
SIOUX FALLS, S.D. — Private investors are stepping forward and the Dakota, Minnesota & Eastern Railroad expects to begin construction next year on about 200 miles of new rail line, chief executive officer Kevin Schieffer said.
The company failed to get a $2.3 billion federal loan to rebuild existing track and add new line to Wyoming’s Powder River Basin coal mines.
The work that went into project design and securing contractors’ bids is now being presented to private investors, and the amount of private capital available has substantially increased in the past three years, he said.
Schieffer said pursuing the federal loan “has given the project a financibility that even in this hot market it probably wouldn’t have had. … It made it a very strong project to bring out in a very strong market.”
While “I would never say never” to beginning construction this summer, “next year will be the first major year of construction,” Schieffer said.
He downplayed a recent trade journal article that said the DM&E is dealing with about 10 potential financiers, including the Canadian National railroad and the Canadian Pacific Railway.
“First of all, I would caution there is too much speculation in that area,” he said. “There are a lot of noncarrier funds extremely ready, willing and able to invest in this.”
As part of a $100 million capital program, the DM&E will upgrade 110 miles of the rail line in Minnesota and South Dakota this year.
“That’s a record for us,” Schieffer said.
The $6 billion Powder River Basin project 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.
Schieffer said the coal train expansion was conceived as a way to develop sufficient traffic for the DM&E to pay for rebuilding its decrepit line.
Since then, the DM&E acquired a sister line to the east, the Iowa, Chicago & Eastern, and the combined line has become the largest Class II carrier in the U.S.
“This company has grown into a very different kind of company than it was 10 years ago, and there is an awful lot to put at risk today,” Schieffer said.
“I am absolutely committed, some days almost maniacally, to get the PRB (Powder River Basin) project built. But I will never put this railroad at risk to do it,” he said. “It’s an incredible success story, the baseline railroad. It has been a home run.”