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Rail News Home Rail Industry Trends

8/25/2006



Rail News: Rail Industry Trends

Rochester clinic, coalition contact FRA a second time to oppose the DM&E's RRIF loan


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For the second time in the past month, the Mayo Clinic and Rochester Coalition have approached the Federal Railroad Administration (FRA) to voice opposition to the Dakota, Minnesota & Eastern Railroad Corp.’s (DM&E) application for a $2.5 billion federal loan to help finance its Powder River Basin project.

Yesterday, the clinic and coalition — which comprises the clinic, city of Rochester, Minn., Olmsted County and Rochester Area Chamber of Commerce — filed a legal brief with the FRA urging the agency to deny the Railroad Rehabilitation and Infrastructure Financing (RRIF) program loan. In mid-July, the two project opponents sent a letter to the FRA strongly suggesting the agency turn down the loan.

“While the public has been denied the opportunity to review the DM&E’s loan application and its ‘proprietary’ financial capabilities, a review of the DM&E’s … voluntary public statements about its proposed coal project, its financial condition and its safety record reveals a troubling picture,” clinic and coalition officials wrote in the brief. “Such misrepresentations matter in determining the fitness and eligibility of the DM&E to receive further public financing and should clearly disqualify the DM&E for receiving the massive publicly-funded loan it is now requesting.”

Clinic and coalition officials believe the DM&E would be unable to repay the loan and has a poor safety record.

DM&E executives dispute those claims and invite the clinic and coalition to engage in a public dialogue to discuss the issues.

“We have been arguing for over eight years and no one has even agreed on what the problem is,” said DM&E President and Chief Executive Officer Kevin Schieffer yesterday during a speech at the Rochester Rotary Club. “Those affected deserve to hear both sides in an honest, reasonable dialogue so we can sort out fact from fiction and get to a cooperative solution.”

The coal-line project would save energy consumers more than $3 billion annually, create ethanol and biofuel production opportunities along the new and upgraded lines, take thousands of trucks off the highway, improve the DM&E’s safety because track would be upgraded, create more than 10,000 jobs and stimulate rural economies, Schieffer noted. The DM&E plans to build a 262.3-mile line through western South Dakota and eastern Wyoming, and upgrade 600 track miles in South Dakota and Minnesota.

“This is an important project for the country and for our immediate service area, but we also recognize there will be impacts,” Schieffer said. “Our concern is that the Rochester Coalition will unnecessarily turn their baseless claims into a self-fulfilling prophecy in Rochester by not agreeing to sit down to work out a mitigation plan.”


Contact Progressive Railroading editorial staff.

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