The Mayo Clinic, one of the pre-eminent medical centres in the U.S., wants Canadian Pacific Railway to commit to major upgrades before it will accept CPR’s proposed merger with the railway running through its home town.
The clinic, in a release Friday, said CPR’s US$1.48 billion cash bid for the Dakota, Minnesota and Eastern Railroad (DME) ignores “the significant environmental impacts created by combining the two railroads.”
The deal, first announced in September last year, is expected to boost CPR’s access to grain, ethanol and coal markets in the U.S. Midwest, especially given DME’s planned expansion into Wyoming’s coal-rich Powder River Basin.
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Those impacts, the clinic wrote, include “the consequences of increased shipments of ethanol and other hazardous materials on what are universally considered to be unsafe tracks” through the city of Rochester, Minnesota, home to one of the four Mayo Clinic locations in the U.S.
The clinic has formally asked the U.S. Surface Transportation Board (STB), which is now reviewing CPR’s proposed takeover of South Dakota-based DME, to require “mitigation” for the track through the city.
If the STB so ruled, CPR would have to invest in major upgrades before the acquisition could go ahead.
“Any increase in hazardous material shipments through Rochester without adequate mitigation poses an unacceptable risk,” said Dr. Glenn Forbes, CEO of the Rochester clinic.
CPR, the clinic wrote, “has suggested that it will initially spend approximately US$300 million over the next several years on making improvements to the existing (DME) rail line, but it is unclear where or how that money will be spent, or whether it will benefit Rochester in any way.”
The U.S. railway’s track splits Rochester in two and passes within “just a few hundred feet” of the Rochester hospital, with only two to three “slow-moving” trains going through the community per day, the clinic wrote.
DME connects with CPR at Minneapolis and Winona, Minn., as well as in Chicago. Rochester is south of Minneapolis and west of Winona.
“The proposed (Powder River Basin) expansion would create a major railway through downtown Rochester, with more than 34 trains bisecting the city daily while carrying vast amounts of coal and hazardous materials at speeds in excess of 50 miles per hour,” the clinic said.
“Even one major accident by a moderately safer railroad would be one too many,” said Rochester Mayor Ardell Brede, part of a coalition with the clinic concerning this merger, in the same release.
The STB is expected to issue a final decision on CPR’s takeover of DME by Sept. 30. The clinic noted that the STB had previously ruled it would only order mitigation if CPR opts to proceed with the Powder River Basin project.
The clinic also said in its release that CPR claims to have not yet decided whether to go ahead with the Powder River expansion, but DME “continues to aggressively advance the project.”
