PIERRE, S.D. (KELO) — Dakota Southern Railway gets to borrow indirectly up to $3 million for flood repairs along the state-owned line west of Mitchell.
The South Dakota Railroad Board approved the loan earlier this month.
80% to 90% of the work is west of the Missouri River, according to Heath Haden, a Dakota Southern official.
He said much of it is in Lyman County. Currently there isn’t service beyond the river.
Loan terms are 2 percent interest, amortized over 20 years, with a balloon payment due in seven years.
A key provision calls for federal emergency management payments to Dakota Southern to be dedicated to re-pay the loan principal.
The borrower technically is Mitchell-Rapid City Regional Railroad Authority that leases the line from state government. The authority in turn sub-leases the line to Dakota Southern.
Haden estimated repairs could be completed in mid to late July.
State Transportation Secretary Darin Bergquist said it would be important to have the line running again by fall harvest.
Bergquist said he informed Aaron Scheibe, a senior policy advisor to Governor Kristi Noem, that the loan was sought.
Track was removed between Kadoka and Rapid City after the Milwaukee Road went bankrupt nearly 40 years ago. Pennington County pulled out of the authority in 2018.