Dakota, Minnesota and Eastern Railroad

DME locomotivesDM&E locomotives 4000 City of Dodge Center and 4004 City of St. Lawrence resting between assignments at Davis Junction, Illinois, in 2007.

The Dakota, Minnesota & Eastern Railroad was originally formed in 1986 through the purchase of Chicago & North Western branch lines in South Dakota and Minnesota.  It and the Iowa, Chicago & Eastern Railroad, formed the bulk of the rail operations of Cedar American Rail Holdings.  Together, the system grew to be the largest Class II railroad company in North America.  In the late 1990s, DM&E made the bold announcement that it was going to build a new line to Wyoming's Powder River Basin so it could be a third rail carrier to haul coal from the area.  Construction of the line was delayed by many court cases from the communities along the line until 2007.  The DM&E and IC&E were purchased by Canadian Pacific Railway in 2008 with the purchase completed on September 30.  DM&E and IC&E operated their last trains on October 31, 2008.



 

DM&E flag falls

DM&E locomotives at Davis Junction

The news is out, America's largest Class II railroad is officially a fallen flag. The Surface Transportation Board announced its approval today of Canadian Pacific's plan to purchase Dakota, Minnesota and Eastern Railroad, Iowa Chicago and Eastern Railroad and Cedar American Rail Holdings. The purchase was first proposed a year ago, and the last day of independent operations for DM&E and IC&E is currently scheduled for October 30, 2008. Already, CP power is showing up more frequently on DM&E/IC&E tracks. Now, how long will it take CP to finish the job DM&E started and get new track built into the Powder River Basin? We're still not sure, but that was one of the reasons that was given a year ago for the purchase in the first place, so my guess is that it won't be too much longer.

DM&E sale may be imminent

Here's something interesting for those in the Midwest. Trains magazine is reporting that the Dakota, Minnesota and Eastern Railroad may be sold by Cedar American Rail Holdings, its current parent company, to raise the funds needed for its Powder River Basin extension. The short list, according to Trains, is now narrowed down to three likely bidders: CN, CP and an undisclosed shortline operator (ed. could this be RailAmerica or maybe Railroad Development Corporation [current owners of Iowa Interstate]?). The bidders have until the end of the week to respond, so we should know more about this transaction next week. The Associated Press has picked up this story now, so check your sources when you look into this one.