Mayo Clinic Seeks Mitigation for Rochester as Condition of Canadian Pacific - DM&E Railroad Merger



    
    Concerns Raised Over DM&E's Continued Pursuit of Powder River Expansion
    Despite CP's Declared Uncertainty
    

    ROCHESTER, Minn., Feb. 1 /CNW/ -- Mayo Clinic today asked the U.S.
Surface Transportation Board (STB) to require mitigation for the city of
Rochester as a condition of the Canadian Pacific's pending acquisition of the
Dakota, Minnesota & Eastern Railroad (DM&E).  The proposed merger currently
ignores the significant environmental impacts created by combining the two
railroads, including the consequences of increased shipments of ethanol and
other hazardous materials on what are universally considered to be unsafe
tracks.  The STB has previously ruled that it will require mitigation only if
the Canadian Pacific decides to proceed with DM&E's controversial Powder River
Basin (PRB) expansion proposal.
    Mayo Clinic submitted its comments today as part of the STB's formal
review of the proposed Canadian Pacific-DM&E merger.
    "We remain committed to working with the Canadian Pacific and we look
forward to it assuming ownership of the DM&E, but at the same time we need to
protect the interests of our patients, staff and community," said Glenn
Forbes, M.D., CEO of Mayo Clinic Rochester.  "Any increase in hazardous
material shipments through Rochester without adequate mitigation poses an
unacceptable risk."
    Right now there are more questions than answers about how this merger
will affect us," added Forbes.  "We need answers."
    The merger is expected to create a new single service rail option that
has the potential for significant growth regardless of the viability of PRB
expansion.  If current Canadian Pacific projections hold, DM&E's Iowa, Chicago
& Eastern line has the potential to originate more than 36,000 carloads of
ethanol annually by 2010.  Increased traffic generated by the merger is
expected to move through Rochester on its way to and from the Canadian
Pacific's interchange point at Minnesota City.
    "We fully expect the Surface Transportation Board will eventually approve
the merger," said Rochester City Council President Dennis Hanson.  "We don't
object to the Canadian Pacific owning DM&E, we just want the board to
recognize that mitigation is necessary with or without the PRB expansion."
    The Canadian Pacific has suggested that it will initially spend
approximately $300 million over the next several years on making improvements
to the existing DM&E rail line, but it is unclear where or how that money will
be spent, or whether it will benefit Rochester in any way.  It also is unclear
whether $300 million is nearly enough to improve DM&E's dilapidated rail line.
Ten years ago DM&E claimed more than $800 million was needed to address
significant deficiencies in its track and structures.
    "Public safety remains the primary concern," said Rochester Mayor Ardell
Brede.  "It gives us little comfort to know the Canadian Pacific has a good
safety record if proper mitigation and adequate infrastructure investment are
not part of the deal."
    Combining these two railroads as proposed -- one the safest and the other
the most dangerous -- does little to lessen the threat a sharp increase in
rail traffic or major rail expansion would pose to the people of Rochester and
the patients and staff of Mayo Clinic," added Brede.  "Even one major accident
by a moderately safer railroad would be one too many."
    
    Powder River Basin Contradictions
    
    Today's Mayo Clinic filing also brought to light contradictory statements
from DM&E's current and future owners about the proposed PRB expansion.  Since
announcing its decision to purchase the DM&E, the Canadian Pacific has
maintained that it has not yet decided to move forward with the PRB expansion.
However, the DM&E continues to aggressively advance the project.  In January,
GOTRAC, an organization supporting DM&E, sent a letter to the South Dakota
Legislature urging swift action to pass a bill that would accelerate the
condemnation of private land for the PRB expansion.
    "The Canadian Pacific maintains a full environmental review isn't
necessary until it decides whether to move forward with the PRB expansion, but
that isn't stopping DM&E from trying to advance the project anyway," said
Olmsted County Commissioner Ken Brown.  "DM&E seems to want it both ways --
progress without consequence."
    "Until this merger is approved, it feels like we are in a bit of a 'good
cop, bad cop' situation," said Rochester Chamber of Commerce President John
Wade.  "The Canadian Pacific maintains it wants to work with us while the DM&E
is out condemning lands and promising everyone who will listen that a major
rail thoroughfare is about to come through the heart of our city -- whether we
like it or not."
    The DM&E's rail tracks bisect the city of Rochester and pass within just
a few hundred feet of Mayo Clinic, a leading international medical destination
with more than 1.4 million outpatient patient visits annually.  Currently, two
to three slow-moving DM&E trains pass through Rochester daily.  The proposed
PRB expansion would create a major rail way through downtown Rochester with
more than 34 trains bisecting the city daily while carrying vast amounts of
coal and hazardous materials at speeds in excess of 50 miles per hour.
    The federal Surface Transportation Board is scheduled to issue a final
decision on the Canadian Pacific's DM&E acquisition by Sept. 30, 2008.
    
    Background
    
    For nearly a decade, the DM&E has pursued a major rail expansion though
parts of southern Minnesota and South Dakota in order to haul large amounts of
coal from Wyoming's Powder River Basin to distribution points in the East.
Unable to secure private financing for the project, DM&E sought the largest
federal loan to a private company in American history -- a $2.3 billion loan
from U.S. taxpayers to finance a major rail expansion project through the
Midwest.  On Feb. 26, 2007, the Federal Railroad Administration (FRA) denied
the DM&E's $2.3 billion loan application citing that the loan would have posed
an unacceptably high risk to federal taxpayers.
    In early September 2007, the Canadian Pacific announced its acquisition
of the DM&E.
    The Rochester Coalition is committed to protecting the people of
Rochester and the patients and staff at Mayo Clinic as well as other affected
communities.
    The Rochester Coalition represents the city of Rochester, Olmsted County,
the Rochester Area Chamber of Commerce and Mayo Clinic.




For further information:

For further information: Jake Reint, +1-952-346-6190, 
jreint@webershandwick.com, for Rochester Coalition

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