Buyer of DM&E west end to keep all parts open
By Chet Brokaw
PIERRE (AP) — The company buying the west end of the Dakota, Minnesota & Eastern Railroad line will keep all parts of the track open, a company official said Friday.
Canadian Pacific Railway Ltd. announced Thursday it is selling the line to Genesee & Wyoming Inc. for about $210 million.
The deal includes 660 miles of track between Tracy, Minn., and Rapid City, north of Rapid City to Colony, Wyo., and south of Rapid City to Dakota Junction, Neb. Also included are connecting branch lines and track from Dakota Junction to Crawford, Neb., currently leased to the Nebraska Northwestern Railroad.
The sale, subject to U.S. Surface Transportation Board approval, is expected to close by mid-year.
Genesee & Wyoming spokesman Michael Williams said the company will continue to provide freight service on all parts of the line it is purchasing.
"We're a long-term owner and operator of local freight railroads. We invest for the long term and seek long-term relationships with our customers," Williams said.
Canadian Pacific said customers on the line ship about 52,000 carloads a year of grain, bentonite clay, ethanol, fertilizer and other products. The new operation will be able to link to the national rail freight system through interchanges with CP, Union Pacific, BNSF and NNW. That will allow shipments to continue to reach markets across the nation.
South Dakota Gov. Dennis Daugaard said he wants to be assured that the buyer will maintain and operate the line between Pierre and Rapid City, provide a high level of service over the long term and maintain healthy competition in shipping rates and access to markets.
Williams said Genesee & Wyoming plans to meet all the terms listed by the governor.
"We're known for our customer satisfaction, which is key to short-line railroading," Williams said.
Daugaard noted that Genesee & Wyoming is the nation's largest operator of short-line rails, which he said is an indication the sale could be a step in the right direction.
"I'm glad that the announced buyer is an experienced operator. That's good news," Daugaard said.
The governor said South Dakota officials plan to meet next week with Canadian Pacific officials. He said he wants to make sure interchange agreements with the large railroads don't include tariffs or fees that would limit such connections.
"I'm very hopeful and look forward to meeting with Canadian Pacific and Genesee & Wyoming toward an outcome that will be good for all parties, particularly South Dakota producers and shippers," Daugaard said.
Pat Foley, manager of Dakota Mill and Grain in Midland, said he hopes the new owner maintains service along the line. The elevator, about 60 miles west of Pierre, ships about 1.5 million bushels of grain a year by rail, he said.
"I guess that's our hope, that everything continues as usual, if not better," Foley said.
Daugaard said he also hopes that Canadian Pacific will soon answer the state's questions about how much it has spent to improve the line since it acquired it in 2007. After Canadian Pacific indicated more than a year ago that it might sell the line west of Tracy, Minn., Daugaard asked that the company show that it had met its obligation as part of the 2007 purchase to invest $300 million upgrading the line.
The Surface Transportation Board recently decided that Canadian Pacific must provide that information.