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Rail shippers eye new projects on SD lines

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news Mitchell, 57301
The Daily Republic
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Mitchell South Dakota 120 South Lawler 57301

PIERRE — Haulers want premiums for grain cars this summer at prices that don’t make financial sense for shippers and producers, according to several members of the state Railroad Board.

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In turn, the shortage of cars raises questions about how many more shipping points can be added in South Dakota by carriers such as BNSF Railway, they said.

At least three significant projects are near decision points.

A new elevator is under discussion at Britton in Marshall County. New agri-centers including loading facilities are sought at Napa Junction in Yankton County and between Kennebec and Reliance in Lyman County.

The Yankton and Lyman projects would be positioned to collect grain from areas where state-owned rail lines have been in hibernation awaiting economic revival.

Railroad Board member Jerry Cope said there are ongoing concerns about ability to handle harvest this year. He is with Dakota Mill and Grain in Rapid City. The Railroad Board’s chairman, Todd Yeaton, of Kimball, said shippers and elevators couldn’t afford the premiums necessary to lock in trains.

“It’s unreal,” Yeaton said.

At the governor’s request, the Legislature transferred bonding authority to the state Railroad Board this year.

The board already had responsibilities to lease state-owned lines and provide loans and grants for rail projects.

Cope wants a presentation on rights, responsibilities and mechanics of bonding because there are some large projects on the horizon. He said he’d like to get direction from the governor’s office.

Another board member, Sheldon Cotton, of Volga, seeks a presentation on federal railroad tax credits. Cotton stressed that he wants an unbiased presenter.

The state railroad offi ce is seeking a $28 million federal grant to continue rehabilitation work west from Oacoma on the state-owned Mitchell to Rapid City line.

More than $14 million in additional funding has been raised in pledges from farmers, commodity groups and local governments and through potential grants and loans from state government.

The immediate goal is to reach central Lyman County where Wheat Growers would like to build its agri-center.

Board member Dan Baker, of Rapid City, noted there was a state bond issue in 1995 for what was then known as the Dakota, Minnesota and Eastern Railroad. It was for $20 million.

The bonding authority was established in the late 1970s so that state government could purchase the South Dakota properties of the bankrupt Milwaukee Road.

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