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

Saturday, February 2, 2008 General News J E 4
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ROCHESTER, Minn., Feb. 1 Mayo Clinic today askedthe U.S. Surface Transportation Board (STB) to require mitigation for the cityof Rochester as a condition of the Canadian Pacific's pending acquisition ofthe Dakota, Minnesota & Eastern Railroad (DM&E). The proposed mergercurrently ignores the significant environmental impacts created by combiningthe two railroads, including the consequences of increased shipments ofethanol and other hazardous materials on what are universally considered to beunsafe tracks. The STB has previously ruled that it will require mitigationonly if the Canadian Pacific decides to proceed with DM&E's controversialPowder River Basin (PRB) expansion proposal.

Mayo Clinic submitted its comments today as part of the STB's formalreview of the proposed Canadian Pacific-DM&E merger.

"We remain committed to working with the Canadian Pacific and we lookforward to it assuming ownership of the DM&E, but at the same time we need toprotect the interests of our patients, staff and community," said GlennForbes, M.D., CEO of Mayo Clinic Rochester. "Any increase in hazardousmaterial shipments through Rochester without adequate mitigation poses anunacceptable risk."

Right now there are more questions than answers about how this merger willaffect us," added Forbes. "We need answers."

The merger is expected to create a new single service rail option that hasthe potential for significant growth regardless of the viability of PRBexpansion. If current Canadian Pacific projections hold, DM&E's Iowa, Chicago& Eastern line has the potential to originate more than 36,000 carloads ofethanol annually by 2010. Increased traffic generated by the merger isexpected to move through Rochester on its way to and from the CanadianPacific's interchange point at Minnesota City.

"We fully expect the Surface Transportation Board will eventually approvethe merger," said Rochester City Council President Dennis Hanson. "We don'tobject to the Canadian Pacific owning DM&E, we just want the board torecognize that mitigation is necessary with or without the PRB expansion."

The Canadian Pacific has suggested that it will initially spendapproximately $300 million over the next several years on making improvementsto the existing DM&E rail line, but it is unclear where or how that money willbe spent, or whether it will benefit Rochester in any way. It also is unclearwhether $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 addresssignificant deficiencies in its track and structures.

"Public safety remains the primary concern," said Rochester Mayor ArdellBrede. "It gives us little comfort to know the Canadian Pacific has a goodsafety record if proper mitigation and adequate infrastructure investment arenot part of the deal."

Combining these two railroads as proposed -- one the safest and the otherthe most dangerous -- does little to lessen the threat a sharp increase inrail traffic or major rail expansion would pose to the people of Rochester andthe patients and staff of Mayo Clinic," added Brede. "Even one major accidentby a moderately safer railroad would be one too many."

Powder River Basin Contradictions

Today's Mayo Clinic filing also brought to light contradictory statementsfrom DM&E's current and future owners about the proposed PRB expansion. Sinceannouncing its decision to purchase the DM&E, the Canadian Pacific hasmaintained 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 DakotaLegislature urging swift action to pass a bill that would accelerate thecondemnation of private land for the PRB expansion.

"The Canadian Pacific maintains a full env
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