(The Associated Press circulated the following on December 28.)
SIOUX FALLS, S.D. — Two U.S. House members want the House to investigate a proposed $2.3 billion federal loan for the Dakota, Minnesota and Eastern Railroad’s coal train project.
The Federal Railroad Administration is expected to make a decision early in 2007 on a loan that would help pay for a $6 billion DM&E project to expand to Wyoming’s coal fields and haul coal east across refurbished track in South Dakota and Minnesota.
The request for a House review of the loan came from Rep. Tim Walz, D-Minn., and Rep. Carolyn Maloney, D-N.Y., in a letter to Rep. Henry Waxman, incoming chairman of the House Committee on Government Reform.
Their Dec. 11 letter suggests that the DM&E may be a poor credit risk unable to cover its debt service and that an environmental analysis for the project may be outdated.
The letter also questions “whether at a time of squeezed national priorities this loan warrants such a large expenditure of taxpayer monies.”
The letter also questions the involvement of Sen. John Thune, a DM&E lobbyist before his election to the Senate, in securing changes in the 2005 federal transportation bill that make the DM&E more attractive for an FRA loan.
Rep. Stephanie Herseth, D-S.D., in a letter to Waxman Dec. 20, countered Walz’s claims. She said a House hearing before a decision is made on the DM&E loan would be premature.
She also told Waxman there is no indication procedures for applying for a loan and analyzing such an application have been violated, and she called Walz’s characterization of the proposed loan as wasteful “absurd hyperbole” and said if the loan is approved “it would make an invaluable contribution to (the) economic infrastructure of my state and the region, and promote increased rail competition throughout the country.”
DM&E President Kevin Schieffer said the company spent $40 million in the first eight years of project development and has committed another $100 million this year.