(DM&E issued the following news release on August 17.)
SIOUX FALLS, S.D. — The Federal Railroad Administration (FRA) today issued its environmental impact review, known as a 4(f), of the DM&E Railroad’s $6 billion upgrade project, putting in place one of the last pieces of the DM&E’s federal loan application.
“The FRA’s environmental review is one of the final steps toward approval of the DM&E’s $2.4 billion FRA Railroad Rehabilitation and Improvement Financing loan application,” Kevin Schieffer, president and CEO of DM&E, said. ”We appreciate the thorough work on this review and, and that the FRA is moving forward. If approved, this loan will give DM&E the resources it needs to upgrade the railroad. That means improved safety, efficiency and opportunities for the farmers and communities that depend upon it.”
The DM&E upgrade project already has undergone an environmental review by the federal Surface Transportation Board (STB). At the conclusion of that review, issued in February 2006, STB approved the project based on its positive public benefits for transportation and safety. STB recognized DM&E would address impacts on quality of life, environmental and safety concerns through the voluntary agreements the railroad reached with 55 of the 56 communities on the line, landowners and 147 compliance conditions.
In its statement issued today, FRA verified the significant public benefits of the project and rationale for the loan:
“The Board found and FRA agrees that current and future shippers on DM&E’s existing lines would benefit from the rehabilitating and rebuilding of existing infrastructure to the higher standards that would be required by its use as a major route for coal transportation. The benefits would be in the form of reduced transit times, more reliable service and improved safety. Increased rail system safety, reliability, and efficiency could also produce rural economic benefits such as increased farm income, increased economic development, and less burden on the rural road network.”
Those feelings were echoed by supporters of the project.
“We, along with agriculture producers and the 55 other communities on the route, are counting on this improvement” said Kevin Paap, President of the Minnesota Farm Bureau Federation, of Blue Earth County, MN. “Our railroads are an important part of the economic lifeline for our rural communities. This upgrade will provide better movement not only for our farm commodities, but also for the products from our value-added renewable energy industry.”
“The DM&E rail upgrade project would give us access to better, safer, more reliable rail service,” said Reid Jensen of Burbank, SD, President of South Dakota Corn Growers Association. “The benefits of this rail investment go well beyond the borders in helping deliver ethanol from the processing plants here to the gas pumps in cities.”
The DM&E submitted an application for the RRIF loan in 2006. The FRA is required to conduct an environmental review on certain aspects of the project. When the environmental review is completed, FRA will make a final determination on the loan application.
“The FRA has a 30-year record of issuing loans for railroads to improve service. In all of that time, the taxpayers of the United States have been fully protected,” said Schieffer. “This loan would have the full backing of our financially strong company and would be paid in full with interest.”
The FRA’s RRIF program is a $35 billion program. Because the program requires loan insurance premiums and interest, the Congressional Budget Office determined that it has no cost to the federal budget.
Project Background
The DM&E Railroad’s upgrade project will rebuild 600 miles of DM&E track and add 260 new miles of main line construction to clean, low-sulfur coal mines in the Powder River Basin of Wyoming. DM&E will privately fund two-thirds of the project, and has applied for a loan from the Federal Railroad Administration – fully backed by the railroad’s assets – to finance the remaining portion, or $2.4 billion. The $6 billion project would create an estimated 10,000 direct and indirect jobs. The DM&E plans to begin construction in 2007 and to be operational by 2010.
The loan will be used to modernize DM&E’s track by replacing 80-year-old tracks with a new continuous welded rail that is quieter and will greatly reduce the risk of train accidents. The loan also will help DM&E pay for a new signaling system that will enable train operators to quickly identify broken rails or misaligned switches.
The Federal Surface Transportation Board (STB) granted DM&E regulatory approval to proceed with the upgrade and expansion process. The eight-year Environmental Impact Statement process concluded that the upgrade would improve safety across the line, including in Rochester.
To help alleviate concerns of communities along the route, DM&E has agreed to 147 compliance regulations including reducing train and whistle noise, implementing emergency response plans, adhering to strict environmental protections, and helping farmers address any track issues that affect their land. Fifty-five of 56 cities along the route – every city except Rochester – have made agreements with the DM&E to address community-specific needs. Each of the 55 communities supports the DM&E project.