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(The following story by Dan Linehan appeared on The Free Press website on April 11.)

MANKATO, Minn. — The Dakota, Minnesota and Eastern Railroad’s work on building a southern bypass around Mankato has been “temporarily placed on hold,” according to a letter from a contractor that was advancing the project.

The DM&E, which did not comment on the letter, is continuing negotiations with the Union Pacific Railroad to use a route through Mankato.

The railroad was denied a $2.3 billion federal loan in February, but has said it still intends to complete its expansion to haul coal from the Powder River Basin in Wyoming.

Blue Earth County Engineer Al Forsberg acknowledged that the railroad’s decision is probably reversible but said, “This is basically what we’ve wanted.”

He said the DM&E requested permission to take soil borings in county land a few months ago, but the request was turned down.

That’s because of the county’s interpretation of a 2002 ruling by the Surface Transportation Board, which directed the DM&E to build on “environmentally preferable” routes. Forsberg said the in-city route, not the southern bypass, is better for the environment, but the DM&E hasn’t shown that it isn’t able to use that route.

It appears unlikely that any of the major players would be upset by this announcement.

The city of Mankato, Blue Earth County and the railroad itself have said they’d prefer the DM&E increase its traffic on Mankato’s rail corridor, rather than build an expensive, environmentally disruptive bypass.

And Skyline residents have long feared a southern bypass, which would necessitate the relocation of homes there.

The problem has always been the Union Pacific’s reluctance to allow a competitor to build rail on right of way it owns.

The letter, sent to the county highway department on April 6, represents a departure from the DM&E’s previous position, which was that it preferred the in-city route but would build the southern bypass if it had to. The DM&E had stepped up soil borings, surveying and other preliminary work on the bypass this winter.