Imagine if you will... That the Dakota, Minnesota & Eastern Raiload had succeeded in 2007 in getting the $2.3 billion loan to build into Wyoming's Powder River Basin to haul coal. In hindsight, how would that have played out and where would things be today?
Thanks to Chris / CopCarSS for my avatar.
More than likely abandoned today. Not sure what a 3rd player would get out of operating excess capacity. Which would not pay the cost of operation or financing of the lines construction. Not to mention BNSF and UP already serve the same region with existing capacity.
I believe that if Schieffer's plan truly had merit, there is no good reason why CP could not have made it work.
Note that when CP eventually sold the property, they did not convey* the rights to build into the Wyoming Coal fields. And in view of the fact that CP has never pursued those rights, I'd conclude it didn't appear worth the while?
*https://www.argusleader.com/story/news/2014/01/06/railroads-new-owners-reassure-sd/4335337/
Murphy,
Think MILW Pacific Coast extension. Late to the market. Only traffic would be what the STB forced UP and BNSF to give up.
BNSF and UP weakened. Stranded asset to owner, shareholders damaged, bankruptcy pending? Bondholders getting a big haircut??
CP was wise to withdraw when they did.
Mac
If DM&E had found investors,I think they would basically have lost everything they had invested by now. In 2007, the FRA decided not to loan DM&E $2.3 billion. If the FRA had made the loan, how would that have played out, given the way things turned out? Would Uncle Sam be out $2.3B?
Murphy Siding...Would Uncle Sam be out $2.3B?
They might have gotten a bike path out of it.
If my memory serves me right, a former member of this forum was really big on the idea of DM&E getting to the Powder River Basin. His thought was that you needed a "triopoly" to provide real competition in the PRB. I'm not sure what the economic justification (if any) was for this concept.
The way I recall it, Trains magazine ran a blurb or a newswire story hyping Schieffer's gambit as "the birth of a class one" for the first time in decades...and consequently a lot of railfans picked up the torch, out of a (IMO) desire to reverse the status quo of consolidation and rationalization.
I was in that group too, at first. But the more I learned about it, the more skeptical I became. Initially it made a good story, but I don't think there was much genuine potential. Reminded me in many ways of the zero-sum nuisance railroads that were created in already overbuilt corridors during the late 19th century, mostly to be a strategic thorn in the sides of the established players.
CSSHEGEWISCH If my memory serves me right, a former member of this forum was really big on the idea of DM&E getting to the Powder River Basin. His thought was that you needed a "triopoly" to provide real competition in the PRB. I'm not sure what the economic justification (if any) was for this concept.
MidlandMike Murphy Siding ...Would Uncle Sam be out $2.3B? They might have gotten a bike path out of it.
Murphy Siding ...Would Uncle Sam be out $2.3B?
Our community is FREE to join. To participate you must either login or register for an account.