DM&E: The Saga Continues
by Leigh Pomeroy
Speculation continues as to what the next steps for the Dakota, Minnesota & Eastern Railroad will be after the Federal Railroad Administration turned down its request for a $2.3 billion loan to finance an expansion into Wyoming's coal-rich Powder River Basin.
Apparently, the Rochester Coalition and the Mayo Clinic have received approximately 12 pounds of DM&E records in answer to a Freedom of Information Act request made about a year ago by lawyers for the two groups. The records weren't released until after the groups sued the FRA to enforce the FOIA request and the FRA rejected the loan.
Meanwhile, the railroad has suspended development work on the so-called "southern bypass" alternative route around Mankato, Minn. The city and Blue Earth County have stated their preference for an in-city route currently owned by the Union Pacific should the DM&E project move forward. But the UP has not shown any interest in negotiating with the DM&E or the city to allow for a DM&E expansion on its right-of-way.
Contractors for the DM&E had been approaching landowners about doing soil borings and survey work for the alternative route. They had also asked Blue Earth County for permission to perform soil borings on county-owned land, but the county refused citing environmental reasons, according to the Mankato Free Press.
The Rochester Post-Bulletin speculated today today that three recent railroad stock purchases by billionaire investor Warren Buffet's Berkshire Hathaway holding company might have a bearing on the DM&E. Berkshire now owns almost 11% of Burlington Northern Santa Fe, making the holding company its largest stockholder. The BNSF is one of the two railroads that currently haul coal from the Powder River Basin, the other being the UP.
While Berkshire specifically named BNSF in its press release about the railroad stock purchases, it declined to name the other two. This has led the Post-Bulletin's Jeff Kiger to speculate: Could one of those be the DM&E?
Speculation continues as to what the next steps for the Dakota, Minnesota & Eastern Railroad will be after the Federal Railroad Administration turned down its request for a $2.3 billion loan to finance an expansion into Wyoming's coal-rich Powder River Basin.Apparently, the Rochester Coalition and the Mayo Clinic have received approximately 12 pounds of DM&E records in answer to a Freedom of Information Act request made about a year ago by lawyers for the two groups. The records weren't released until after the groups sued the FRA to enforce the FOIA request and the FRA rejected the loan.
Meanwhile, the railroad has suspended development work on the so-called "southern bypass" alternative route around Mankato, Minn. The city and Blue Earth County have stated their preference for an in-city route currently owned by the Union Pacific should the DM&E project move forward. But the UP has not shown any interest in negotiating with the DM&E or the city to allow for a DM&E expansion on its right-of-way.
Contractors for the DM&E had been approaching landowners about doing soil borings and survey work for the alternative route. They had also asked Blue Earth County for permission to perform soil borings on county-owned land, but the county refused citing environmental reasons, according to the Mankato Free Press.
The Rochester Post-Bulletin speculated today today that three recent railroad stock purchases by billionaire investor Warren Buffet's Berkshire Hathaway holding company might have a bearing on the DM&E. Berkshire now owns almost 11% of Burlington Northern Santa Fe, making the holding company its largest stockholder. The BNSF is one of the two railroads that currently haul coal from the Powder River Basin, the other being the UP.
While Berkshire specifically named BNSF in its press release about the railroad stock purchases, it declined to name the other two. This has led the Post-Bulletin's Jeff Kiger to speculate: Could one of those be the DM&E?
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1 Comments:
Interesting article in today's Tulsa World newspaper
http://www.tulsaworld.com/news/article.aspx?articleID=070412_5_E4_spanc77621
that puts in to perspective the BNSF hypocrisy regarding the FRA loan denied to DM&E in February. Now, BNSF (and the Class I's) want huge tax breaks to add capacity. According to David Strom at the Taxpayers League and Steve Forbes (neither of which is a rail industry expert and we have to seriously question the judgement of Steve Forbes after his magazine named Kevin McHale of the Wolves the best GM in all of pro sports...yikes!) we have plenty of capacity - after all BNSF and UP already haul coal from the PRB, we don't need another, right? Not so fast! Apparently, the 18% decline in rail capacity and skyrocketing BNSF/UP revenues due to the resulting captive shipping of the duopoly west of the Mississippi since 1990 has come back to haunt the very STB who approved all these railroad mega-mergers creating the BNSF and UP behemoths. Now, some of the same politicians who railed against the DM&E loan want to give tax breaks and grants to the Class Is.
Of course, the FRA/DM&E loan debate is over, but the fight against DM&E will go on even if DM&E is able to secure private financing for their upgrade project, even though it has been well-established how critical the DM&E upgrade is to the financial well-being of the upper midwest.
These are indeed interesting times in the rail industry.
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