[Congressional Record Volume 152, Number 96 (Thursday, July 20, 2006)]
[Senate]
[Pages S8042-S8043]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DM&E RAILROAD LOAN FROM THE FEDERAL RAILROAD ADMINISTRATION
Mr. DAYTON. Mr. President, I have arisen previously to talk about a
proposal of the DM&E Railroad to reconstruct its rail line across
southern Minnesota in order to run up to 36 unit coal trains, rail cars
containing grain and other agricultural products, and possibly
shipments of hazardous materials. The DM&E is presently seeking a $2.5
billion low-interest loan from the Federal Railroad Administration for
this project, which the company initially said would be financed to the
private capital markets.
Evidently unable to attract that necessary financing, DM&E has now
turned to the American taxpayer to assume the enormous financial risk
that such a project entails. If the project were to be successful, the
financial benefits would go to DM&E's executives and investors. If the
project were to fail, the losses would be paid by American taxpayers.
It is for that reason that I have urged the Administrator of the
Federal Railroad Administration and the U.S. Secretary of
Transportation, who have the ultimate decision-making authorities, to
exercise all necessary due diligence before their decisions about this
enormous financing.
Previously, I have also expressed the strongest possible concern
about DM&E's intention to run this rail line through downtown
Rochester, MN, and immediately adjacent to the world-renowned Mayo
Clinic. Mayo Clinic and Rochester City officials vehemently oppose
DM&E's intended route and maintain that it would be catastrophic to
their clinic and their city. I agree.
The Mayo Clinic is known and respected nationally and worldwide for
its medical excellence. Last year, the Mayo Clinic saw over 1,700,000
patients who came from throughout Minnesota, our country, and the world
to seek the best possible medical care. The Mayo Clinic is the largest
private employer in Minnesota, employing over 28,000 people, including
2,400 physicians.
In addition to the serious financial questions surrounding this
project and major environmental concerns across its intended route, new
information has just come to light that demonstrates even more
conclusively how unacceptable its proposed route through downtown
Rochester, MN, and adjacent to the Mayo Clinic would be. According to a
report released today by the Mayo Clinic, but using public, factual
information, DM&E has one of the very worst safety records in the
entire U.S. railroad industry. In fact, last summer, Mr. Kevin
Sheiffer, President and CEO of DM&E's parent company, told DM&E
employees, in their newsletter, ``We have a very poor safety record.''
The report discloses that from 2000 through 2005, the DM&E reported
train accidents at a rate 7.5 times higher than the national average;
during 2005, the DM&E's rate of accidents at crossings was 2.3 times
higher than the national average; the DM&E had the highest rate of
employee casualties among regional freight railroads in 2004, and was a
close second in 2003 and 2005; during the past 10 years, DM&E had 107
accidents involving trains carrying hazardous materials, including a
record 16 in 2005; and since 2003, when the Federal Railroad
Administration loaned DM&E $233 million, DM&E's main track accident
rate has soared to eight times the national rate--a 175 percent
increase over its pre-loan rate.
Mr. President, I ask unanimous consent that the the overview of this
report, ``The Sum of All Fears: Unsafe Railroad Plus Unsafe Plan Equals
Disaster,'' and the forwarding letter from the Mayo Clinic to The
Honorable Joseph H. Boardman, Administrator of the Federal Railroad
Administration, be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, follows:
July 20, 2006.
Hon. Joseph H. Boardman,
Administrator, Federal Railroad Administration, Washington,
DC.
Dear Administrator Boardman: On May 8, 2006, the County of
Olmsted, the City of Rochester, Mayo Clinic, and the
Rochester Area Chamber of Commerce submitted an independent
study by a prestigious accounting firm setting forth detailed
reasons why granting a $2.5 billion loan to the Dakota,
Minnesota and Eastern Railroad (DM&E) posed a substantial
risk to the American taxpayers that the loan will not be
repaid. We believe that documented risk to the taxpayers is
reason enough for the loan to be denied.
In addition to the substantial risk of default, the public
safety impact of any loan to the DM&E must be considered,
especially given the DM&E's abysmal safety record as outlined
in the enclosed analysis. In light of the DM&E's record as
the most unsafe regional railroad in America, granting a $2.5
billion loan to the DM&E would clearly and dramatically
increase the public safety risk to the residents of Rochester
and the patients and physicians at Mayo Clinic. It would also
violate the statutory admonition that the Secretary of
Transportation shall give priority to projects that ``enhance
the public safety,'' and undermine the Federal Railroad
Administration's (FRA) statutory obligation to ``carry out
all railroad safety laws.''
The proposed loan would not enhance the public safety. To
the contrary, the proposed loan would fund a project that
could have terrible consequences for the residents of
Rochester, Minnesota, and the patients, doctors and
scientists at Mayo Clinic. Transporting hazardous materials,
at high speeds, on one of the country's most dangerous
railroads, is an ``accident'' waiting to happen. If that
accident were to occur in the City of Rochester near Mayo
Clinic, then the consequences could be catastrophic.
The safety problems at the DM&E are well documented by the
FRA itself. Last October, the FRA cited the DM&E for
``numerous problems with management and implementation of
[its] safety program.'' The FRA should carefully consider the
safety consequences because granting the proposed loan would
simply reinforce the DM&E's attitude that safety does not
matter. We believe that denying the loan would make it clear
that safety comes first.
[[Page S8043]]
For these reasons (and the reasons set forth in our May 8,
2006 submission), we respectfully submit that the DM&E's loan
request should be denied. We also reiterate our previous
request for the opportunity to meet with you to discuss the
merits of our submissions.
Sincerely,
Mayor Ardell Brede,
City of Rochester.
Glenn S. Forbes, M.D.
CEO, Mayo Clinic Rochester.
John Wade,
President, Rochester Area Chamber of Commerce.
Dennis L. Hanson,
President, Rochester City Council.
Kenneth D. Brown,
Chair, Olmsted County Commissioners.
____
The Sum of All Fears: Unsafe Railroad Plus Unsafe Plan Equals Disaster
Overview
The Dakota, Minnesota and Eastern Railroad (DM&E), a
regional freight railroad, is seeking a $2.5 billion loan
from the United States government, backed by the American
taxpayers, for a major expansion that would allow trains to
carry coal and other freight, including hazardous materials,
through the heart of downtown Rochester--a few hundred feet
from Mayo Clinic--at speeds up to 50 miles per hour. The DM&E
refuses to limit the number of trains through Rochester and
refuses to restrict the type of cargo it carries through
Rochester near Mayo Clinic.
The Secretary of Transportation must consider the effects
of such a loan on the public safety and a loan should not be
granted to the DM&E because it would expose Rochester and
Mayo Clinic to the safety risks inherent in the
transportation of hazardous materials by a railroad with
long-standing safety problems.
The DM&E has one of the worst safety records of all U.S.
railroads:
1. From 2000 through 2005, the DM&E reported train
accidents at a rate 7.5 times higher than the national
average;
2. During 2005, the DM&E's rate of accidents at crossings
was 2.3 times higher than the national average;
3. The DM&E had the second-highest rate of employee
casualties among regional freight railroads in 2004 and 2005;
4. During the past 10 years, DM&E had 107 accidents
involving trains carrying hazardous materials, including a
record 16 in 2005; and
5. Since 2003, when the Federal Railroad Administration
(FRA) loaned DM&E $233 million, the DM&E's main track
accident rate has soared to eight times the national rate--a
75 percent increase over its pre-loan rate.
The U.S. government has repeatedly identified safety
problems at the DM&E. In 2002, the DM&E signed an Expedited
Consent Agreement with the Environmental Protection Agency
(EPA) agreeing to pay a civil penalty and correct violations
of federal regulations. In 2005, the Occupational Safety &
Health Administration (OSHA) cited and fined the DM&E for
serious safety violations. The FRA placed the DM&E under a
Safety Compliance Agreement in October 2005.
The DM&E has claimed that its abysmal safety record is the
result of old track, but the FRA has rejected that excuse--
most recently in its October 2005 Safety Compliance
Agreement. During the past six years track defects caused
only about one-half of the DM&E's train accidents and track
defects had nothing to do with the company's high rate of
accidents at highway-rail crossings or its high rate of
employee casualties. New track will not change the company's
cavalier attitude toward safety.
In 2003, the FRA entered into a $233 million loan agreement
with the DM&E. Since that time the DM&E's poor safety record
has gotten materially worse--not better. There is simply no
reason to believe that lending the DM&E another $2.5 billion
would change the result or the company's approach to safety.
Rochester, Minnesota, is home to 40 per cent of all the
people who live along the DM&E's proposed expansion route.
Rochester is also home to Mayo Clinic, one of the world's
leading medical centers. Many of Mayo's patient-care
facilities are within hundreds of feet of the DM&E's tracks--
at ground level. An accident involving the spill of hazardous
materials near Mayo Clinic, with its vulnerable patient
population, would be disastrous. The safety risks posed by an
unsafe railroad transporting hazardous materials at high
speeds near a world-renowned medical center should not be
subsidized by the U.S. government. It is wrong for a safety
organization like the FRA to reward a company for
disregarding the safety of the public and its own employees.
The American people would be shocked to learn that the U.S.
government is considering giving an unsafe railroad one of
the largest loans to a private company in the history of the
United States of America.
____________________