SIOUX FALLS - 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."
