Tuesday, June 26, 2007

DM & E Goes After Private Equity

The fact that I have not posted has not meant that there is no news of interest to report. For example, there is an item about the continued efforts to force the Class One Rails to scrap their Fuel Surcharges.

But the item of interest that has caught the attention of many, both on the line haul side and on the supply side, is that the Dakota, Minnesota and Eastern is not taking the Federal Railroad Administration's rejection of their Loan Application lying down. In a proactive move, the DM&E is going after private financing. This is a move that is no surprise; even Rip figured it would happen, too.

Several had speculated that the Canadian National would be interested in making access to the Powder River Basin a "Three Railroad" affair. But two other rail players have also allegedly asked to add their ante-up into the game as well. One, the Canadian Pacific, is not that big of a surprise. The other, an unnamed Short Line Operator, is a surprise.

Both the CN and the CP have connections with the DM&E at Minneapolis/St. Paul. Both carriers, on the surface at least, would love access to the Coal-rich Wyoming Mines. Add to that the support of several Electric Utilities who feel that the BNSF/UPRR duopoly needs some competition, and support for lending money for DM&E's access into Wyoming looks alot stronger.

But it is hard to see through the applications of the "Venture Capitalists" as to who really is willing to lend the money.








Sometimes, it just looks easier to build than it really is!





Even the BNSF and UPRR could be hoping for construction of the line, in a clandestine way of course. Why? If the cost of the loan becomes such a burden to the DM&E that liquidation at pennies on the dollar of the new line becomes necessary, either carrier would be only too happy to get in line to pick up the pieces.

But the best part is that, for once, private enterprise would be able to thumb their nose at the Feds. For that reason alone, many hope that the DM&E is successful.

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