Secretary of Transportation Mary Peters has just announced that the loan application to the DM & E will not be going through.
We've received the following press release from Walz's office:
DM&E LOAN APPLICATION REJECTED BY DEPT. OF TRANSPORTATION CREDIT COUNCIL
Walz calls decision "victory for good government"
(Washington, D.C.) - Today, Rep. Walz announced that the Department of Transportation Credit Council has rejected the loan application submitted by the Dakota, Minnesota & Eastern Railroad. Walz spoke with Transportation Secretary Mary Peters earlier today who confirmed that the Credit Council denied the $2.3 billion loan application.
"This is a victory for good government and accountability," said Walz. "The citizens of this district demanded close scrutiny of this loan and they got it. This loan proposal brought people from all walks of life together to insist that members of Congress better monitor taxpayer funds. I believe that today's decision is a direct result of congressional and citizen inquiry and oversight."
"Let me reassure the citizens of southern Minnesota that I support expanded rail service. My objective has always been to ensure proper oversight of this loan occurs," said Walz. "Today we can start moving forward. We can work together to expand rail access in a responsible way that protects citizens and communities while expanding economic opportunity for agricultural producers and energy providers."
"Despite the fact that this loan is no longer under consideration, I will continue to move forward with the legislation I recently introduced. The "Congress Must Co-Sign Act" requires that the Congress exercise appropriate oversight, should a similar situation arise in the future," said Walz.
Walz, a freshman member of Minnesota's congressional delegation campaigned on the lack of congressional oversight with regard to the proposed DM&E Railroad Expansion project. Walz has consistently called for increased accountability, transparency and attention to safety concerns.
The DOT announcement:
RA Administrator Denies DM&E Powder River Basin Loan Application
Citing Unacceptable Risk to Federal Taxpayers
Federal Railroad Administrator Joseph H. Boardman today denied a $2.3 billion Railroad Rehabilitation and Improvement Financing (RRIF) loan application from the Dakota, Minnesota, & Eastern (DM&E) railroad concluding it posed an unacceptably high risk to federal taxpayers.
In a decision released today, Boardman found that while the Powder River Basin project met some of the RRIF program's statutory requirements, there remained too high a risk concerning the railroad's ability to repay the loan even with an appropriate combination of credit risk premiums and collateral.
He said he was concerned by several factors, including the DM&E's current highly leveraged financial position; the size of the loan relative to the limited scale of existing DM&E operations; and the possibility that the railroad may not be able to ship the projected amounts of coal needed to generate enough revenue to pay back the loan.
In addition, Boardman cited concerns that the application did not sufficiently address how the railroad would handle potential cost overruns and schedule delays with the Powder River Basin construction project.
Boardman reached his final decision after reviewing the DM&E application using the criteria set by Congress for the RRIF loan program and following an environmental review of the proposed project.
DM&E had applied for the RRIF loan to finance construction of a new 280-mile rail line to Wyoming's Powder River Basin coal mines and to reconstruct approximately 600 miles of existing track in South Dakota and Minnesota.
Looks like that Rothenberg rating for MN-01 might favor the Democratic incumbent even more after this afternoon. (Hat tip to Polinaut).
And a Huge Sigh of relief flows in from Evil Bobby.
Posted by: Dav | February 26, 2007 at 04:43 PM