Railroad receives $233 Million loan for infrastructure upgrades in North Central States
The U.S. government loaned two related short-line railroads $233 million for track and other infrastructure improvements, marking the largest chunk of assistance doled out under a troubled rail assistance program established in 1998.
The Federal Railroad Administration granted the loan to Dakota, Minnesota & Eastern Railroad and its subsidiary Iowa, Chicago and Eastern Railroad, both headquartered in Sioux Falls, S.D.
The DM&E serves 130 companies along its 1,103-mile network, while the IC&E serves about 750 customers on a 1,403-mile system. The money will be used to acquire additional rail lines, rehabilitate existing track and bridges, and refinance existing debt on better terms. The savings in debt payments will be used for capital improvements and deferred maintenance.
The railroad group was approved for the loan through the Railroad Rehabilitation and Improvement Financing Program, which provides loans, and loan guarantees, to help railroads finance capital investments. The Railroad Rehabilitation and Improvement Financing program has been plagued by bureaucratic red tape. Extensive application procedures and slow approvals have limited the number of railroads seeking assistance through the program. In April, the Federal Railroad Administration approved an $11-million loan for the Arkansas & Missouri Railroad. Quasi-governmental railroad Amtrak received a $100-million loan in 2002.