S.D. rail panel puts ‘for sale’ sign on all state-owned lines

Capitol News Bureau
KELO railroad signal light

PIERRE, S.D. (KELO) — Every last mile of railroad the state of South Dakota owns should be offered for sale.

The South Dakota Railroad Board decided that Wednesday.

The state Department of Transportation will publish rules for the sale on its website Monday.

Offers are due by 10 a.m. CT November 21 in the department’s confidential electronic system.

The board made minor changes Wednesday to a draft copy.

It contains detailed mileage and financial descriptions of the six routes, the board’s objectives from the sale and the digital address where offers can be submitted.

South Dakota state government bought hundreds of miles of track in the late 1970s when the Milwaukee Road went bankrupt.

“Forty years ago we were looking at the death of railroads,” Karla Engle, a lawyer for the department, told board members Wednesday. “So now we’re looking at it coming full circle.”

She said a prospective buyer should submit one offer in portable digital format — PDF — covering all of the routes or pieces of interest.

The board will review all offers at a special meeting December 4 and can start negotiations with any prospect December 18 or after.

State law requires that any sale have the consent of Governor Kristi Noem. The federal Surface Transportation Board also must clear any sale.

The state board or the governor could reject any offer. Selling any line would provide a one-time infusion of cash for state government’s budget, at a time when state officials aren’t optimistic about strong revenue growth.

The department will take questions from possible buyers of the lines, but the answers will be published at the bidding site, where anyone could see them, as a matter of fairness and transparency.

“There won’t be any private responses to questions,” Engle said. “We will not identify who the questioner is.”

The regional railroad authorities that lease the lines from state government, and the companies that operate over them, can decide if they want to answer questions, department officials said.

“It’s obvious a lot of work was done on this,” said Jerry Cope of Rapid City, the board’s chairman.

Joint tours of lines will be arranged, with the schedule to be published by September 20.

Burlington Northern Santa Fe has purchased hundreds of miles of lines that state government previously owned.

The department has a map and a history on its website showing all private and public rail lines.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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