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Surface Transportation Board gives final blessing to DM&E's Powder River Basin project


The Dakota, Minnesota & Eastern Railroad Corp.’s (DM&E) eight-year quest to build a rail line into Wyoming’s Powder River Basin — and, ultimately, become a Class I — is closer to becoming a successful journey. Yesterday, the Surface Transportation Board (STB) announced it has granted final approval to the 1,100-mile regional’s $1.5 billion plan to build a 262.3-mile line through western South Dakota and eastern Wyoming, and upgrade 600 miles of other potential coal-hauling lines in South Dakota and Minnesota.

The board initially approved the DM&E’s plan in 2002, but project opponents appealed the decision to the U.S. Eighth Circuit Court of Appeals. The court’s ruling required the STB to re-review the plan’s environmental, noise and vibration impacts.

“As directed by the court, the board reweighed the merits of the DM&E’s underlying proposal … and concluded that, despite certain potential adverse environmental impacts, not all of which can be fully mitigated, the proposed project has demonstrated transportation benefits and would further the public interest,” STB officials said in the decision, which stipulates that the DM&E meet 147 environmental mitigation conditions.

Although it’s taken a long time to win board approval, the DM&E is pleased with the end result, said President and Chief Executive Officer Kevin Schieffer in a prepared statement.

“This project will have a tremendous positive impact on agriculture, grain prices and economic development in [South Dakota], and will help lower energy costs and expand rail capacity nationally,” he said.

Now, the DM&E will await the Federal Railroad Administration’s decision on the railroad’s application to obtain a $2.5 billion Railroad Rehabilitation and Improvement Financing (RRIF) program loan to finance the project and other trackwork. The DM&E also plans to rehabilitate 150 track miles between Wall, S.D., and Colony, Wyo., and upgrade 280 track miles on 1,400-mile sister regional the Iowa, Chicago & Eastern Railroad Corp.

FRA officials, who are reviewing the DM&E’s application, were awaiting the STB’s final decision before beginning the loan approval process. Under revised RRIF program regulations implemented last year, the FRA now has 90 days to issue a decision.