Mayo Clinic worried by CPR's U.S. acquisition

The internationally renowned Mayo Clinic has asked a U.S. regulator to intervene in Canadian Pacific Railway's pending $1.5-billion-US takeover of the Dakota, Minnesota and Eastern Railroad.

The medical centre in Rochester, Minn., as well as local businesses, the county and the City of Rochester, are worried that the deal announced in September 2007 will lead to a huge increase in train traffic through the city.

The Rochester Coalition, the umbrella group for the clinic, city, county and local chamber of commerce, has asked the U.S. Surface Transportation Board to require the Calgary-based CPR to mitigate any potential problems caused by increased use of the tracks.

"Any increase in hazardous material shipments through Rochester without adequate mitigation poses an unacceptable risk," Dr. Glenn Forbes, CEO of Mayo Clinic, said in a release issued Friday.

The board is expected to approve the deal in the fall.

The coalition is particularly worried about the Dakota, Minnesota and Eastern's plans to expand into the Powder River Basin in Wyoming.

The DM&E's tracks split Rochester and pass very close to the clinic. There are just two or three slow-moving trains on the line on an average day, but the proposed Powder River Basin expansion could lead to more than 34 trains a day "carrying vast amounts of coal and hazardous materials at speeds in excess of 50 miles per hour," the release said.

The coalition is also worried about conflicting messages about the Powder River Basin project.

CPR hasn't made a decision about the plan, "but that isn't stopping DM&E from trying to advance the project anyway," Olmsted County Commissioner Ken Brown said in the coalition's release.

"We don't control the DM&E's day-to-day actions" because the stock has been placed with an independent trustee, pending the Surface Transportation Board's decision, CPR spokesman Mark Seland said.

He reiterated that the CPR has not made a decision about the Powder River Basin project.

But even without the Powder River Basin plan, traffic volume on the line is expected to increase.

Costly upgrades

CPR has suggested that it will spend about $300 million US to upgrade DM&E, "but it is unclear where or how that money will be spent, or whether it will benefit Rochester in any way," the coalition said in the released.

It noted that a decade ago, DM&E claimed that it would cost more than $800 million US to fix dilapidated lines and structures.

CPR has said the DME is boosting its business.

The DM&E stock has been placed with an independent trustee, pending regulatory approval of the takeover, CPR has said.