Re: What's the latest with the DM&E?
Author: Mark Meyer
Date: 12-05-2010 - 18:32
The line will never be built, and it never was going to be built. The fact that the DM&E couldn't get the funding to build it proved that a lot of people didn't see any merit in the project, and there really never was.
The problem with the DM&E plan was that their railroad would only serve a narrow market. The only places that would logically receive coal off the DM&E have been utilities in places like Wisconsin, Illinois, Iowa, Minnesota, and east of Chicago through interchange with other railroads. But BNSF and UP send lots of coal to places like Southern Illinois, Mississippi, Georgia, Louisiana, Texas, Oklahoma, Arkansas, Kansas, and everywhere in between and to places southwest and northwest like Arizona, Washington, and to export near Vancouver, BC. Therefore, there are huge markets that DM&E would have no access to, so they would have been forced to try to steal whatever business they could from UP and BNSF, who probably wouldn't have just let them have it without a fight. In other words, there was little business to be had, and all the investors knew it.
The reason the CP bought the DM&E/IC&E was for the IC&E portion, not the DM&E part. The IC&E gives CP its own route to Kansas City, and direct interchange (they even share the same yard) to Kansas City Southern and therefore their subsidiary in Mexico.
My guess is that in order to "save face" for all parties involved - since there was so much hoopla (all of this generated by the DM&E) over this - the CP is never going to say that the expansion plan was a non-starter and is never going to happen. But it was and it isn't.