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W&LE the third railroad to receive RRIF loan in 2006

Last month, the Wheeling & Lake Erie Railway Co. (W&LE) landed its second Railroad Rehabilitation and Improvement Financing (RRIF) loan and the third administered by the Federal Railroad Administration this year.

The 840-mile regional will use proceeds from the $14 million loan to fund a recent freight-car order and future locomotive acquisitions, says W&LE Vice President and Chief Financial Officer Mike Mokodean.

In summer, W&LE purchased 150 multi-purpose hoppers from FreightCar America Inc. — the railroad’s first-ever new cars.

Delivered in late July, the 110-ton steel hoppers carry coal, aggregates, limestone and taconite pellets.

Currently, W&LE is analyzing the used locomotive market and determining how much power the railroad needs to acquire, says Mokodean.

In 2004, the regional obtained a $25 million RRIF loan to rehabilitate track to accommodate 286,000-pound cars.

Loans since 2002 stand at 15
The FRA previously issued a $25.5 million loan to Iowa Northern Railway Co. in October and a $9.35 million loan to Iowa Interstate Railroad Ltd. in February.

Under the RRIF program, the FRA is authorized to provide $35 billion (including $7 billion set aside for regionals and short lines) in direct loans or loan guarantees to eligible railroads and government agencies to acquire, improve or rehabilitate intermodal or rail facilities. Loans also can be used for intermodal or rail equipment purchases. Since 2002, the FRA has administered 15 RRIF loans.

During fiscal-year 2006, the FRA has approved seven RRIF loans, most of which still must be formally executed by negotiating and signing closing documents, says FRA spokesman Warren Flatau, adding that the agency expects to execute several more loans during the next few months.

However, it might take longer for the FRA to render a decision on the Dakota, Minnesota & Eastern Railroad Corp.’s (DM&E) application for a $2.3 billion RRIF loan, which the railroad would use to help fund the construction of a 262-mile line through western South Dakota and eastern Wyoming, and upgrades to 600 track miles in South Dakota and Minnesota to access the Powder River Basin.

As of mid-November, FRA Administrator Joseph Boardman hadn’t signed a record of decision on environmental issues and the 90-day “clock” — the period during which the administration must render a decision — hadn’t started, says Flatau.

“No determination has been made as to when a decision will be made,” he says.

— Jeff Stagl