PIERRE, S.D. – The South Dakota State Railroad Board (Board) acted today on proposals received by the South Dakota Department of Transportation (SDDOT) on Nov. 21, 2019, for possible acquisition of state-owned railroad assets.
Nine operating proposals from seven proposers were received during the invitation for proposal. During their special board meeting on Dec. 4, the Board provided proposers the opportunity to present their proposals prior to the Board making any final decisions.
Today’s action ends the Board’s deliberation on eight of the nine proposals. The Board’s decision was to authorize SDDOT to enter negotiations with LG Everist for acquisition of the Sioux Valley Line located south of Canton. The Board also decided to reject the other operating proposals that were received. Those offers included proposals on the Britton line, Mitchell to Rapid City (MRC) line, Napa to Platte line, and the Wolsey Interchange. There were no proposals submitted for the Yale line located near Huron.
In June, the Board authorized SDDOT to prepare packages for soliciting proposals for the purchase of any or all the railroad lines. SDDOT prepared packets for each line, provided tours for inspection of the lines, and finally provided a question and answer forum to answer any remaining questions. With the rejection of the proposals, those lines will remain the property of the State and will continue to be operated by the current lease/sublease holders.
The State acquired the railroad lines after the 1980 Milwaukee Road embargo which resulted in bankruptcy filing and possible abandonment of the lines. Since acquisition of the lines, the State has been successful in restoring and expanding service on many of the rail lines resulting in millions of dollars of development adjacent to the lines.
“We are pleased the Board agreed to move forward with negotiations for the Sioux Valley Line and look forward to discussing the possible sale of this railroad asset with LG Everist,” says Transportation Secretary Darin Bergquist. “Although we are disappointed with the result of proposals for the other lines, we learned a lot by going through the process and feel there will be other opportunities for future solicitations. The goal is to get these rail lines back in the hands of private entities, as long as it is the best interest of the State of South Dakota.”
Final action on non-operating proposals and lease holder proposals that were received will be decided after negotiations are complete on the Sioux Valley Line.