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Canadian Pacific Announces Sale Of Former DM&E Line After Surface Transportation Board Decision

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The Canadian Pacific railway announced today that it will sell the former Dakota, Minnesota & Eastern rail line, west of Tracy, Minn., to Genesee & Wyoming, a New York-based rail company that is the nation’s largest operator of short line rails. (KELO File)
The Canadian Pacific railway announced today that it will sell the former Dakota, Minnesota & Eastern rail line, west of Tracy, Minn., to Genesee & Wyoming, a New York-based rail company that is the nation’s largest operator of short line rails. (KELO File)

PIERRE, S.D. (KELO AM) – The Canadian Pacific (CP) railway announced today that it will sell the former Dakota, Minnesota & Eastern (DM&E) rail line, west of Tracy, Minn., to Genesee & Wyoming, a New York-based rail company that is the nation’s largest operator of short line rails.

The announcement comes shortly after the Surface Transportation Board (STB) issued a decision on the state of South Dakota's Canadian Pacific petition requiring CP to produce documentation of capital investments made to improve the line.

“I am hopeful this sale to a short line operator is in the best interest of the state,” said Gov. Dennis Daugaard. “With the recent decision from the Surface Transportation Board, I am also hopeful that our questions about the Canadian Pacific’s obligations to improve the line will be answered. As I’ve said before, South Dakotans deserve to know whether CP kept its promises. The line is too important to our state for our questions to go unanswered.”

Last year, Gov. Daugaard set forth four values that he would use to determine whether or not to support any future sale of the line.  Those values are:

  1. The buyer’s ability and willingness to maintain and operate the line between Pierre and Rapid City.
  2. The buyer’s ability to maintain healthy competition, both as to shipping rates and access to markets.
  3. The buyer’s ability to provide a high level of service to South Dakota shippers and producers.
  4. The buyer’s commitment to providing long term service in South Dakota.

“The fact that the proposed sale is to a well-known short line operator appears to be a good step in the right direction,” the Governor added.

 The STB rendered their decision on Dec. 19, 2013, which will also require the Canadian Pacific to answer written questions and produce further documentation requested by the state.

After CP indicated that it may sell the line west of Tracy, Minn., the Governor filed a petition with the STB. The petition requested that the STB look into whether CP fulfilled the representations it made while seeking to acquire the line. Based upon CP’s representations, the STB approved the company’s purchase of the DM&E Railroad in 2008. 

After filing the petition, the Governor traveled to Washington, D.C, to discuss the importance of the line with U.S. Agriculture Secretary Tom Vilsack and U.S. Transportation Secretary Anthony Foxx.

Since the fall of 2012, Gov. Daugaard and members of his administration have been in contact with CP to examine whether CP had fulfilled its promises to the STB. Though there has been some communication with CP, the Governor’s questions have still largely gone unanswered.

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