The Illinois-Iowa Railfan

June 21, 2007
SIOUX FALLS, S.D. - The Associated Press quoted Dakota, Minnesota & Eastern Railroad President Kevin V. Schieffer today as saying private investors are stepping forward and the railroad expects to begin construction next year on about 200 miles of new line to Wyoming's Powder River Basin coal mines. Earlier this year the company failed to get a $2.3 billion federal loan to rebuild existing track and add new line to reach the PRB. DM&E first announced the PRB expansion in 1997.

"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," Schieffer told the AP. 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 but did not deny the June 12 Trains News Wire report 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 non-carrier funds extremely ready, willing, and able to invest in this."

This year, as part of a $100 million capital program, the DM&E will upgrade 110 miles of line in Minnesota and South Dakota. "That's a record for us," Schieffer said. He said the $6 billion Powder River Basin expansion was conceived as a way to develop sufficient traffic for the DM&E to pay for rebuilding its decaying line. Since then, the DM&E acquired 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 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."