7 September 2007
Supporters, Opponents of Coal Project Welcome Rail Sale
Pierre South Dakota USA - The Canadian Pacific Railway's
purchase of the Dakota, Minnesota & Eastern Railroad was welcomed Wednesday by both friend and foe of the DM&E's expansion plan
to haul coal from Wyoming east to Midwest power plants.
The deal should help provide the financing needed to build the DM&E's $6 billion expansion project, which will upgrade track and
assure rail service to small communities, said Philip Mayor John Hart.
"I think it's a good move. I think it's the only way this line is ever going to get built," said Hart, a staunch supporter of
the project. "It's very important for a small community like Philip and other small communities that we keep that line open."
Those who have opposed the project or sought changes said they also were pleased by news of the sale because it offers the chance to
negotiate with someone other than DM&E President Kevin Schieffer, whom they have accused of being secretive and unwilling to make
changes in the expansion project.
"We would hope that if Canadian Pacific becomes the owner, they would be far more reasonable to deal with than Kevin Schieffer has
ever been," said Dwight Adams of Brookings, a member of a group seeking to persuade the DM&E to build a bypass around the
eastern South Dakota city.
Former Gov. and U.S. Rep. Bill Janklow, a lawyer representing landowners along the route, said the deal will help the Midwest economy
because Canadian Pacific will increase rail competition. "I think there's a tremendous opportunity in that deal, a tremendous
opportunity."
The sale also will likely change the way the rail line deals with landowners who would be affected by the proposed expansion project,
he said.
"The DM&E had a philosophy of pretending they care about people. They talked about caring, but all of their actions were about
running over people with a bulldozer," Janklow said.
"New faces mean new opportunities. Let's hope there are new opportunities," Janklow said.
DM&E wants to rebuild 600 miles of track across South Dakota and Minnesota and add 260 miles of track around the southern end of
the Black Hills to reach the Powder River Basin coal fields in Wyoming. The rebuilt railroad would haul low-sulfur coal
east to power plants, providing competition to Union Pacific and BNSF Railway, which now haul coal from the basin.
DM&E has been seeking private financing for the project since it failed earlier this year to get a federal loan.
The deal calls for Canadian Pacific to pay $1.48 billion in cash for the DM&E, with future payments of up to $1 billion depending
on progress on the expansion project.
People in many communities along the line have supported the expansion project because they believe it would boost the economy by
hauling coal, grain, ethanol, and other products. Many in Pierre, Brookings, and Rochester, Minnesota, have opposed the project or
sought changes because it would run more trains at higher speeds through the middle of those cities.
A coalition in Rochester has argued that the project could lead to dangerous spills of hazardous materials along the line, which is
only a few blocks from the Mayo Clinic.
When asked whether gaining access to Canadian Pacific tracks in Minnesota provides additional options for the Rochester area, DM&E
President Schieffer said traffic is routed based on efficiency and what customers want, not on politics.
"So the traffic is going to run whatever way the marketplace dictates the traffic ought to run," Schieffer said. "Having
said that, though, certainly this combination gives us a lot of additional marketing options, and we feel very good about that."
Janklow said he hopes the sale will lead to discussions of ways to reduce the impact of faster, additional trains in Pierre, Brookings,
and Rochester.
"I'm not against progress. I absolutely have never been against the railroad's project. I've been against the way it's
handled," Janklow said.
Supporters of the project praised Schieffer for his efforts to get the project built, and they said he has been sensitive to the views
of those along the line.
"I just congratulate Kevin Schieffer in looking out for the best for people in small towns in South Dakota," said Hart, the
mayor of Philip.
Huron Mayor Dave McGirr said he is pleased with the sale because it will allow the expansion project to be built. Huron, which will get
maintenance operations and other facilities if the project is built, would gain 400-500 jobs that pay between $60,000 and
$80,000 a year, he said.
"It would probably be the biggest single economic development in Huron since town was incorporated," McGirr said.
But Larry Melvin, owner of a flower shop located 27 feet away from the track in Pierre, said he hopes Canadian Pacific officials will
pay more attention to safety issues and the rights of property owners along the route. "Time will
tell."
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