BNSF, South Dakota agree $40.3 million settlement for Core railroad
BNSF Railway Co. last week reached a $40.3 million settlement with the State of South Dakota for the purchase of the state-owned Core railroad line.
The 368-mile Core line runs from Aberdeen to Mitchell, Mitchell to Canton, Canton to Sioux Falls and Mitchell to Sioux City.
The two parties originally agreed upon a sale price of $42.5 million. The settlement figure was adjusted by the value of the properties sold by the state, track improvements that will be made by both BNSF and the state, as well as additional rental payments for 2005 owed by BNSF. Proceeds from the sale will be deposited in the state’s Railroad Trust Fund.
Under terms of the final agreement, both the state and BNSF agreed to undertake railroad infrastructure improvements, including BNSF building sidings at Alpena, Redfield, and North Sioux City. The state and BNSF will improve the Wolsey interchange, as well as reconstruct the interchange at Napa Junction, north of Yankton. The state will construct a siding north of Aberdeen. The state’s investment in the infrastructure improvements will be approximately $6.5 million over the next several years.
In addition to the purchase of the Core line, BNSF has agreed to allow certain access rights to the Core line by smaller, South Dakota based railroads.
“South Dakota producers and shippers will benefit by enhanced transportation access to markets,” said South Dakota Gov. Mike Rounds. “As a condition of the sale, we negotiated a settlement protecting and expanding access to the Core line for our South Dakota shippers. This is access to worldwide markets that our smaller carriers have never before had.”
“The purchase of the Core line continues our successful partnership with and commitment to the state and freight rail shippers over the last two decades to revitalize and upgrade these once abandoned rail lines. We look forward to continuing to grow business in South Dakota and to investing in this line as an integral part of our extensive western rail network,” said Peter J. Rickershauser, BNSF’s vice president, network development.
The final settlement of the sale is subject to dismissal of all litigation and approval by the Surface Transportation Board.