South Dakota says railroad hasn’t spent promised funds

Farm Forum

RAPID CITY (AP) – Canadian Pacific Railway hasn’t spent a promised $472 million to improve a rail system that includes the only direct east-west line that serves western South Dakota, state officials say.

Canadian Pacific disputes the state’s claims and says it has met financial obligations for the line.

The Rapid City Journal reported that Gov. Dennis Daugaard met with the secretary of transportation, the secretary of agriculture and the Federal Railroad Administration in Washington, D.C., on Sept. 12 to ask the agencies to support efforts to have Canadian Pacific disclose its investments in the former Dakota, Minnesota and Eastern Rail Corp., which Canadian Pacific purchased in 2008.

Matt Konenkamp, a policy adviser for the governor’s office, said the company promised it would spend $300 million in the first three years after it acquired the DM&E network and then another $172 million for previously budgeted capital improvements for the entire network, which runs through Wyoming, Nebraska, Missouri, Illinois, Minnesota, Iowa, Wisconsin and South Dakota.

He said the company appears to have spent little on the section of the line that includes Rapid City.

“As near as we can tell, the line that most affects West River has had no substantive upgrades other than maintenance-type improvements,” Konenkamp said.

Canadian Pacific spokesman Ed Greenberg said the company believes it has met its commitments.

“In fact from 2008 to July of 2013, Canadian Pacific has invested more than $400 million to improve the safety and efficiency of the former DM&E network,” he said.

South Dakota officials have sent a petition to the federal Surface Transportation Board calling for proof that the money has been spent on promised upgrades. Rapid City and Pennington County have both prepared resolutions to support the state’s request.

South Dakota officials also fear the railroad will sell the South Dakota section of the line, which they claim would make it more difficult to ship products.

“It should be made clear if a decision was made to sell the 660-mile section, it would only be with a party that can provide quality service to shippers and grow the business,” Greenberg said.