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Governor Daugaard Questions Intent of Canadian Pacific Railroad

FILE: Railroad Crossing, Train
Anthony Wright/KSOO-AM

Gov. Dennis Daugaard has filed a petition with the federal Surface Transportation  Board (STB) raising questions about the acquisition by the Canadian Pacific Railway (CP) of the Dakota, Minnesota & Eastern (DM&E)  Railroad.

“I am asking the  Surface Transportation Board to determine whether or not the Canadian Pacific has met its obligations to the people of South Dakota,” said Daugaard. “This examination is imperative, because past support for the Canadian Pacific’s  purchase was based chiefly on promises it made to the STB.”

The petition serves as an official inquiry with the STB to determine if the CP lived up to the representations it made while seeking to acquire the DM&E. The Governor has  asked the state Attorney General’s Office to assist in filing the  petition.

The DM&E Railroad started years ago in South Dakota with the some of the worst rail in the country and the dreams of a few visionaries to make rail viable again. The company and the system grew to become one of the largest small railroads in the country, with lines in South Dakota, Minnesota, Iowa, and Illinois.

The biggest dream was to haul coal from Wyoming to power plants in the East. That dream was never realized.

However, the company was successful in rehabbing most of it’s rail lines, and provided dependable service by hauling grain and other products. The company strategically acquired other small rail companies which expanded territory and revenue.

It was sold to Candian Pacific in 2008.

“Rail infrastructure is critical to businesses in South Dakota, especially agriculture. We must do everything we can to ensure proper rail service for  our state,” said Daugaard.

Based upon the CP’s  representations, the STB approved the company’s purchase of the DM&E Railroad in 2008. Prior to the acquisition, the DM&E provided shipping  service from South Dakota to critical transportation hubs, including Minneapolis, Chicago and Kansas City.

The CP indicated recently that it may sell the line west of Tracy, Minnesota. That meana the new buyer of the line would have limited or no opportunity to ship cargo beyond Tracy unless the cargo is shipped using the CP.

Since last fall, Governor Daugaard and members of his administration have been in contact with CP to examine whether the CP had fulfilled its promises to the STB. Despite some  ommunication from the CP, the Governor’s questions have largely gone  unanswered.

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