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South Dakota governor no longer opposes DM&E line sale to Genesee & Wyoming

Three South Dakota congressmen recently sent a letter to the Surface Transportation Board (STB) expressing support for Genesee & Wyoming Inc.'s (GWI) purchase of the Dakota, Minnesota and Eastern Railroad (DM&E) west-end line from Canadian Pacific.

Now, the state's governor, who previously voiced opposition about the deal, has sent a letter to the board stating he's no longer against the sale.

"After an extensive review … I have determined not to oppose the Canadian Pacific’s sale to the GWI,” wrote Gov. Dennis Daugaard in the letter dated Feb. 12. “I have great hope for the GWI’s future in South Dakota, and I want to express a warm welcome to them.”

On Jan. 2, CP and GWI announced they executed an agreement through which the Class I will sell the DM&E line to GWI for $210 million. The west end encompasses about 660 miles of track between Tracy, Minn., and Rapid City, S.D.; Rapid City and Colony, Wyo.; and Rapid City and Dakota Junction, Neb. The route also includes branch lines and other trackage between Dakota Junction and Crawford, Neb. The sale is expected to close by mid-2014, subject to STB approval and other customary closing conditions.

After the deal was announced, Daugaard and state officials reviewed the sales contract, visited Union Pacific Railroad’s facilities in Mankato, Minn., and spoke extensively with GWI’s top executives, the governor wrote.

Daugaard plans to continue pursuing the state’s petition to the STB that questions whether CP upheld its promises to improve the line, because those inquiries "still need to be answered," he wrote. The petition asks the STB to look into whether CP fulfilled the representations it made to the board while seeking to acquire the DM&E in 2008.

Daugaard has traveled to Washington, D.C, to discuss the importance of the west-end line with U.S. Agriculture Secretary Tom Vilsack and U.S. Transportation Secretary Anthony Foxx, he wrote.

Contact Progressive Railroading editorial staff.

More News from 2/18/2014