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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 /PRNewswire-FirstCall/ -- 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.


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.

SOURCE Rochester Coalition
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