Canadian Pacific puts railway up for sale

ONE day after announcing it would indefinitely shelve plans for a multimillion-dollar extension to bring its rail line into the heart of the Powder River Basin, Canadian Pacific has put up a “for sale” sign on its track into the western coalfields.
Canadian Pacific puts railway up for sale Canadian Pacific puts railway up for sale Canadian Pacific puts railway up for sale Canadian Pacific puts railway up for sale Canadian Pacific puts railway up for sale

A west bound coal train, courtesy Canadian Pacific Railway

Donna Schmidt

The coal rail shipper said it wanted to sell the span that used to be the Dakota Minnesota and Eastern (DM&E) railroad stretching from Tracy, Minnesota, into South Dakota, Nebraska and Wyoming.

Access to the coal-rich Powder River Basin was one of the primary attractions that led CP to buy the DM&E in 2007 for about $1.5 billion.

That thinking has changed, with CP saying it is inviting expressions of interest from potential partners in December.

“This portion of the CP network would be an attractive and highly viable opportunity for a low-cost operator,” president and chief executive officer E. Hunter Harrison said.

“There is a strong long-term franchise here for an operator willing to maintain high quality service and explore growth opportunities with existing and future customers.

“It is CP’s intention to defer indefinitely plans to extend its rail network into the Powder River Basin coal mines based on continued deterioration in the market for domestic thermal coal, including a sharp deterioration in 2012,” company officials said.

CP operates in six Canadian provinces and 13 US states and maintains 14,700 miles of track.

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