Copyright 2006, Traffic World, Inc.
The Iowa Northern Railway received a $25.5 million loan from the Federal Railroad Administration to upgrade the railroad in anticipation of higher demand for ethanol shipments.
Agricultural products account for most of the cargo carried by the 143-mile short line, but in recent years demand for ethanol shipments has grown. The improvements, which include building new rail sidings and upgrading rail yards, will allow the railroad to support heavier railcars and move more freight faster, the FRA said.
The loan, which is to be repaid over a period of 25 years, was provided under the FRA''s Railroad Rehabilitation and Improvement Financing program, which authorizes the administrator to provide direct loans and loan guarantees up to $35.0 billion. Up to $7.0 billion is reserved for projects benefiting freight railroads other than Class I carriers.
Direct loans can fund all or part of a railroad project with repayment periods up to 25 years and interest rates equal to the cost of borrowing to the government.
Other loans in 2006 were $14 million to Wheeling & Lake Erie Railway and $9.35 million to the Iowa Interstate Railroad. The RRIF program is the one considering a $2.4 billion loan application from Dakota, Minnesota & Eastern Railroad, a proposal other groups including other railroads are opposing.