Plans for coal trains haltedadmin
The coal industry took another hit when the U.S. Federal Railroad Administration denied Dakota Minnesota & Eastern Railroad’s loan request.
DM&E had requested a $2.3 billion federal loan for its Powder River Basin project, originally proposed in 1998, the Argus Leader reported. Federal Railroad Administrator Joseph Boardman said the loan was too high-risk for taxpayers.
“It’s obviously a disappointment, but not the first we’ve had in the last nine years, and I’m sure it’s not the last,” said Kevin Schieffer, president and chief executive officer of the Sioux Falls-based railroad.
The project would rebuild DM&E’s rail line and extend it 280 miles to reach Wyoming’s Powder River Basin coal mines. The project’s estimated cost is $6 billion.
Executives may consider resubmitting a loan application on a smaller project since the Federal Railroad Administration’s decision cannot be appealed.
Boardman said the FRA had concerns the loan size compared to DM&E’s existing operations and the possibility the DM&E might not be able to ship enough coal to generate the repayment money.
Rep. Stephanie Herseth, D-S.D., said she was disappointed the Federal Railroad Administration failed to recognize the loan’s potential to help alleviate the serious and harmful shortage of rail infrastructure in the country.
“With this decision, we have missed a unique opportunity to invest in increased rail competition that would benefit South Dakota’s rural economy,” Herseth said.