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2/1/2008



Rail News: M&A

Mayo Clinic seeks mitigation for Rochester as condition of CPR/DM&E merger


Today, the Mayo Clinic asked the U.S. Surface Transportation Board (STB) to require mitigation for the city of Rochester as a condition of Canadian Pacific Railway’s pending acquisition of the Dakota, Minnesota & Eastern Railroad (DM&E).

Unveiled in September 2007, the proposed merger “currently ignores the significant environmental impacts created by combining the two railroads, including the consequences of increased shipments of ethanol and other hazardous materials on what are universally considered to be unsafe tracks,” according to a statement issued by The Rochester Coalition, which represents the city of Rochester, Olmsted County, the Rochester Area Chamber of Commerce and Mayo Clinic.

The STB previously ruled that it will require mitigation only if the CPR elects to proceed with DM&E's Powder River Basin (PRB) expansion proposal. Under the agreement, CPR would acquire the 2,500-mile DM&E and its subsidiaries — including the Iowa, Chicago & Eastern Railroad Corp. — for $1.5 billion.

"We remain committed to working with the Canadian Pacific and we look forward to it assuming ownership of the DM&E, but at the same time we need to protect the interests of our patients, staff and community," said Dr. Glenn Forbes, chief executive officer of Mayo Clinic Rochester. "Any increase in hazardous material shipments through Rochester without adequate mitigation poses an unacceptable risk."

The DM&E's rail tracks bisect the city of Rochester and pass within a few hundred feet of Mayo Clinic, which records more than 1.4 million outpatient patient visits annually. Currently, two to three “slow-moving DM&E trains” pass through Rochester daily, according to the Rochester Coalition. The proposed PRB expansion would create a “major railway through downtown Rochester with more than 34 trains bisecting the city daily while carrying vast amounts of coal and hazardous materials at speeds in excess of 50 mph,” the coalition says.

"Until this merger is approved, it feels like we are in a bit of a 'good cop, bad cop' situation," said Rochester Chamber of Commerce President John Wade. "The Canadian Pacific maintains it wants to work with us while the DM&E is out condemning lands and promising everyone who will listen that a major rail thoroughfare is about to come through the heart of our city — whether we like it or not."

STB is scheduled to issue a final decision on the CPR-DM&E deal Sept. 30.



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