DM&E, partner to build girder plant in Rapid City

By Dan Daly, Journal Staff Writer | Saturday, November 18, 2006

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RAPID CITY -- Even though it hasn’t received approval for its controversial $2.4 billion federal loan, Dakota, Minnesota & Eastern Railroad announced that it is proceeding with one part of the project.

The company has entered into an agreement with Corselab Structures of Omaha, Neb., to build a new bridge component manufacturing plant in Rapid City.

Officials said the plant will supply the railroad with prestressed and precast concrete bridge components for DM&E’s proposed upgrade and extension to the coalfields of Wyoming’s Powder River Basin.

The bridge components, 60- to 80-foot concrete girders, will be used in bridge spans. Each bridge span requires two to four girders, and bridges typically have several spans.

The bridge girders, of which DM&E said it will need more than 750 -- will be manufactured in Rapid City and transported by rail or truck to worksites along the line.

“The execution of this agreement represents another significant calculated risk for us,” said Kevin Schieffer, DM&E president and chief executive. “In a perfect world, the project would be fully approved and committed before we made this kind of investment. But because of the size of the Powder River Basin project and the number of component parts required to build the project, plant construction has to begin now in order to be able to produce enough parts to build the line. So, we run the risk of spending several million dollars developing this plant that will be lost if the project is not built.”

GCC Dacotah Cement in Rapid City will supply the cement. Rock, gravel reinforcing rods and other materials will be bought from various suppliers in the area.

DM&E and Coreslab have begun buying machinery and equipment for the facility, such as cranes and cement batch plant equipment. Officials said construction will begin this year, and they hope to have the plant operational by June. Coreslab expects to have a work force of as many as 35 employees by then.

“We’re excited to expand our reach with Black Hills area businesses to help make the DM&E rail upgrade a reality,” Mario Franciosa, president of Coreslab Structures, said.

DM&E has been working to get federal approval for its coal line project since 1997. The company wants to tap the lucrative coal-hauling business from the more than a dozen surface mine in the Powder River Basin.

DM&E hopes to begin construction in 2007 and to be operational by 2010.

Its $2.4 billion loan application is under consideration by the Federal Railroad Administration. DM&E wants to rebuild 600 miles of existing rail and add 260 miles of new rail to reach Wyoming's coalfields.

Nine years ago, the project was pitched as a $1 billion project. Since then, costs have risen dramatically. In its news releases now, DM&E says the entire project, including trains and other equipment, will be $6 billion.

Opposition to the railroad project has come from both ends of the proposed line.

A broad coalition of ranchers, landowners and environmental groups fought the project through the long regulatory process that began shortly after the project was announced in 1997.

The Mayo Clinic in Rochester, Minn., has led a very public campaign to force DM&E to bypass its city. And on Nov. 7, voters in Brookings repealed the city’s Community Partnership Agreement.

And a growing number of government watchdog groups and members of Congress are questioning Sen. John Thune’s little-noticed changes to the federal highway bill that made the unprecedented loan possible.

But the project has support among a number of business and economic development groups in South Dakota.

“The DM&E rail upgrade holds incredible potential for the whole Black Hills region -- not just in terms of the construction phase, but longer term,” said Bob DeMersseman, president of the Rapid City Economic Development Partnership.

He said the Coreslab announcement is one of the benefits that Rapid City would see if the project is built.

“We’re excited to have Coreslab locate this facility here in Rapid City instead of brining finished product from out of state. This is what value-added manufacturing is all about. We look forward to more developments like this that will help the Hills tap more of our economic potential.”

 

Contact Dan Daly at 394-8421 or dan.daly@rapidcityjournal.com