DM&E in the twilight zone...

[Murphy Siding]

MidlandMike

 

 

Murphy Siding

...Would Uncle Sam be out $2.3B?

 

 

They might have gotten a bike path out of it.

 

 

As a South Dakota resident, who once lived in the Powder River Basin of Wyoming, I can say that would be a really boring bike path.

[Murphy Siding]

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.

 

That was futuremodal. His theory was that two railroads in a market could conspire to keep rates high, but somehow three railroads could not. 

I sent him a DM&E hat that I found at a rummage sale. We agreed he could give me back the hat when he rolled into my state on an Amtrak train running on the DM&E line. I'm not holding my breath.

[Convicted One]

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]

     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?

[PNWRMNM]

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

[Convicted One]

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/

[SD60MAC9500]

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.

[Murphy Siding]

     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?