PIERRE, S.D. (KELO) — The Dakota, Missouri Valley and Western Railroad received clearance Wednesday to install a switch and access track on a line that state government owns in northeastern South Dakota.
The South Dakota Railroad Board approved putting in the switch and additional track.
Officials from DMVW and AGP came to the teleconference seeking a grant of nearly $464,000, for what they described as state government’s share of the project.
They wanted the board to pay for work up to AGP’s property line.
Board members suggested a loan instead.
DMVW and AGP decided they would rather fully fund the $1.4 million project.
State government owns a variety of rail lines, including the 78-mile segment from Aberdeen to Geneseo Junction, North Dakota.
The Marshall Regional Railroad Authority leases that line and subleases it to DMVW.
The plan calls for DMVW to deliver two million bushels of soybeans from the Britton terminal to AGP — approximately 2,238 truckloads that would be hauled by 600 train cars instead.
DMVW and AGP want to have the connector in place by fall harvest.
State railroad administrator Jack Dokken explained Wednesday that a grant would be governed by many state laws and regulations, while a loan would be subject to an agreement between the Marshall authority and the state board.
One of the state board members, Greg Carmon of Brandon, said DMVW’s pending ownership of a 0.26-acre parcel on the proposed connector complicated the situation.
Joel Jundt, the deputy secretary for the state Department of Transportation, agreed.
DMVW plans to use a sister company to build the connector. Dokken said a government grant would require a public bidding process.
“To just go out and hire a company would not be eligible,” Dokken said. “If you do go through a loan, it’s different.” He added, “There wouldn’t be any public procurement requirements on a loan.”
Officials for the railroad and the cooperative decided to do the work themselves.
Board chairman Jerry Cope of Rapid City praised their plan.
“It’s a great project. It’s a great idea. I hope you can appreciate the rules the state has to abide by,” Cope said.
The state board also gave Ringneck Energy of Onida more time to pay $200,000 of principal and $85,000 of interest that was due April 1 on a $3 million loan. The new deadline for the ethanol plant to pay is October 1.