The Dakota, Minnesota and Eastern Railroad, commonly known as
the DM&E, was a fairly young railroad operating for twenty-two
years between 1986 and 2008, when it became part of the Canadian
Pacific system (which first vied to purchased the railroad in
September of 2007). The DM&E also owned and operated the Iowa,
Chicago & Eastern Railroad, commonly known as the IC&E (or
simply ICE), and together they were under the holding company of
Cedar American Rail Holdings (although this was basically a
“paper” company and in no way managed or operated the
railroads).
The Dakota, Minnesota and Eastern came into existence in 1986
when the Chicago & North Western Railway (the C&NW) decided
to abandon a large chunk of its railroad in South Dakota in 1985,
which at the time was quite unprofitable as nearly all of the
granger railroads during that period were having a very tough time
earning a profit on a region which was not only overpopulated with
railroads but also losing traffic. What actually led to the
DM&E’s creation was in part due to US Senator Larry
Pressler who fought against the C&NW’s proposed
abandonment of the South Dakota lines and won (which then led to
DM&E being created to serve the routes).
When the DM&E came into existence in 1986 it was actually a
quite large railroad gaining some 826 miles of railroad with
another 139 miles of trackage rights, which also included other
capital such as buildings, locomotives, vehicles, etc.; all from
the C&NW. The rest of the DM&E’s current system comes
from its purchase of the Union Pacific Railroad's Colony Line.
At its peak, the Dakota, Minnesota and Eastern operated a
railroad of some 1,103 miles of track, with nearly 195 miles of
that trackage rights. Along with operating a 1,000+-mile rail
system, the DM&E also owned some 200 locomotives and 8,000 rail
cars. What’s interesting about the DM&E is the fact that
its IC&E subsidiary was actually larger than it, with some
1,400 miles of track. The IC&E operated east of its parent
connecting cities such as Chicago, Minneapolis, and Kansas
City.
Perhaps what the DM&E was most notable for was its recent
attempt to access the lucrative Wyoming Power River Coal Basin. The
process has taken a decade and construction has yet to begin. Worse
for the railroad was the fact that a requested federal loan of some
$2.3 billion to fund the project was denied by the FRA in 2007.
Despite this, new owner CP still has plans to eventually build into
the PRB. An irony of CP's purchase of the railroad was the battle
that the town of Rochester (Minnesota) and the Mayo Clinic fought
to keep the D&ME from building its PRB extension. With the
purchased, CP now has plans (regardless if it ever builds into the
Basin) to reroute its Chicago to Huron, South Dakota trains from
their current running (through Iowa and Illinois) to CP's
ex-Milwaukee Road main line, which operates through Wisconsin to
Chicago and connects to the former DM&E at Winona, Minnesota.
This new routing, which plans to be upgraded and see many
additional trains, will take them right through Rochester and next
to the Mayo Clinic.