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CHICAGO AND NORTH WESTERN, DAKOTA, MINNESOTA & EASTERN SIGN TRACK PURCHASE AGREEMENT

 CHICAGO AND NORTH WESTERN, DAKOTA, MINNESOTA
 & EASTERN SIGN TRACK PURCHASE AGREEMENT


DM&E subsidiary to buy 175-mile Colony, Wyo. to Dakota Junction, Neb.
 line; New railroad will be based in Rapid City, S.D.
 BROOKINGS, S.D., Feb. 5 /PRNewswire/ -- The Dakota, Minnesota & Eastern Railroad Corporation, Brookings, S.D., said today that it has signed an asset purchase agreement with the Chicago and North Western Transportation Company, Chicago, permitting DM&E to acquire 175 miles of North Western line extending from Colony, Wyo. to Dakota Junction, Neb. for approximately $6.3 million. The transaction, which is subject to regulatory approval by the Interstate Commerce Commission, also grants DM&E 21 miles of trackage rights from Dakota Junction to Crawford, Neb.
 DM&E plans to acquire and operate the line through a subsidiary company, to be headquartered in Rapid City, S.D. The new railroad will be headed by a general manager and have its own employees, although some staff services may be shared jointly with the DM&E.
 DM&E's president, J.C. "Pete" McIntyre, said, "We are looking forward to this expansion of our system and the opportunity to provide customers with more frequent, cost-effective service -- especially for shipments moving south of Rapid City."
 Robert Schmiege, president of the North Western, said, "The agreement coincides with our long-standing effort to establish and foster strong links with regional railroads like DM&E. The result is more efficient rail service for our many mutual customers in the Black Hills area, while lessening the financial burden associated with operating and maintaining nearly 200 miles of remote, light-density track."
 The new railroad plans to expand the volume of traffic moving over the line. "We will be aggressively pursuing new business opportunities in the Black Hills area," McIntyre said. Major commodities carried by the line include bentonite clay, cement, grain and grain products, wood chips, aggregates and lumber products -- much of which currently moves over the DM&E from Rapid City to connecting railroads at Mankato, Minn.; Mason City, Iowa and Winona, Minn.
 When fully operational, the new railroad expects to have approximately 25 to 30 employees. DM&E said that most of the freight cars used by the new railroad will continue to be provided be the North Western under a car supply arrangement. Additional locomotives will be leased by the new railroad.
 The transaction includes an option granting DM&E the right to purchase the North Western's track between Dakota Junction and Crawford. DM&E had a similar option to purchase the Colony to Dakota Junction line as part of its 1986 purchase agreement with the North Western.
 An application seeking approval from the I.C.C. will be filed within the next month, McIntyre said. Although the review process could take up to six months, "we hope to do it sooner," he said.
 The Chicago and North Western Transportation Company operates approximately 5,800 miles of line in nine states, primarily in the Midwest and the West with main-line track extending from Chicago as far west as central Wyoming.
 DM&E, which is based in Brookings, began operations in September, 1986 and presently operates 965 miles of line in Minnesota, Iowa and South Dakota over track acquired from the North Western.
 -0- 2/5/92
 /CONTACT: Lynn Anderson of DM&E, 605-692-1666, or Jim Foote of Chicago and North Western, 312-559-6165/ CO: Chicago and North Western Transportation Company; Dakota, Minnesota
 & Eastern Railroad Corporation ST: Illinois, South Dakota IN: TRN SU:


AL -- MN007 -- 7173 02/05/92 12:13 EST
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Publication:PR Newswire
Date:Feb 5, 1992
Words:588
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