PIERRE, S.D. (KELO) — The South Dakota Railroad Board is giving its support to two projects looking for federal grants.
The state board on Wednesday formally backed a $31 million plan by Sisseton Milbank Railroad to reconstruct 37 miles of track between the two communities in northeastern South Dakota.
The board also endorsed a $28.65 million plan by Rapid City, Pierre & Eastern Railroad to build a new roundhouse at Huron to service larger locomotives and to buy eight newer locomotives.
Sisseton Milbank Railroad will ask for a $24,761,728 grant and the RCP&E project will seek a $14.325 million grant from the federal government’s Consolidated Rail Infrastructure and Safety Improvements (CRISI) Program, which has a record $1.4 billion available this year.
The next steps call for the railroads to work with the state Department of Transportation to submit the applications to the Federal Railroad Administration by December 1.
Twin Cities & Western Railroad owns the Sisseton-Milbank line. Mark Wegner presented the project to the state board. Board members questioned whether the cost estimate adequately accounted for inflation on a project that needs to win a grant and likely won’t go to bid until some time in 2024. Said Wegner, “I am confident in those numbers.”
The board also modified some of the wording in a previous state loan that will provide the Sisseton-Milbank project with $6.25 million at 1.5% interest.
Genesee & Wyoming Inc. owns the RCP&E line that covers South Dakota east to west. Jerry Vest, the company’s senior vice president for government and industry affairs, outlined the project to the state board. Replacing the 120-year-old roundhouse with a three-stall service center for locomotives will cost an estimated $23.25 million, according to Vest.
But Vest also told the board the company is finishing a deal to buy 41 newer 1990s-era locomotives to replace 35 of the 1970s-era ones now in use and to provide six of the newer ones for a new shuttle-train customer.
He wanted the board to give him more time, because the project’s consultants had recommended adding some of the newer locomotives into the grant application to make it more attractive. The grant’s eligibility provisions include subsidizing locomotives that reduce emissions.
Vest suggested that the state board consider a total project of roundhouse and an unspecified number of newer locomotives that would total up to $40 million, with half to be covered by the grant. He said putting all 41 locomotives into the package would make the grant request too large.
But several board members said they weren’t comfortable with verbally adding to a written application or were confused about it. Vest eventually suggested eight locomotives at $675,000 apiece and the roundhouse as a total package of $28.650 million, with a grant request for half at $14.325 million.
The board’s chair, Jerry Cope of Rapid City, asked state Transportation Secretary Joel Jundt what he thought about that middle ground. “Sounds good,” Jundt said.
Vest also asked the board Wednesday for state financial support and mentioned $100,000 to $200,000. Jundt said that would need to wait until the board’s next meeting October 19 because it wasn’t on the agenda.
Dan Kippley, representing Ellis & Eastern Railroad, told Vest that the project had a good chance of receiving a grant. “You have to be optimistic,” Kippley said. Vest declined to share his opinion. “I have to win, is what I have to do,” Vest said.