Regional Railroad Receives Federal Loan to Improve Service and Safety in Rural Communities of Iowa and Illinois
Tuesday, July 26, 2005 (Washington, DC ) The Iowa Interstate Railroad (IIR) will receive a $32.7 million federal loan to help it improve service to rural areas that rely on trains to ship corn, soybeans, steel, chemicals and other products to market. The loan from the Federal Railroad Administration (FRA) will pay for track improvements needed to haul heavier freight cars and get products to key shipping points faster and safer.
Besides helping companies such as Archer Daniels Midland, Maytag, and Midland Iron & Steel already located along its 571-mile line between Council Bluffs, Iowa, and Chicago, IL, the loan is expected to help the railroad lure new business and improve economic development in rural communities.
"Companies that ship by rail want to be on lines capable of handling their business," said FRA Administrator Joseph H. Boardman. "This loan is not just an investment in the line itself, but also an investment in the local economy,” he added.
Specifically, the funds from the Railroad Rehabilitation Improvement Financing (RRIF) program will improve 266 miles of track, replace 180,000 crossties, lay of thousands of tons of new ballast, and rebuild 95 highway-rail grade crossings between Council Bluffs, Iowa, and Bureau, IL. A portion of the loan also will be used to purchase a rail line that IIR is currently leasing and refinance debt incurred from previous infrastructure improvement projects.
The IIR connects to several railroads including the Union Pacific, Burlington Northern Santa FE, CSX, and the Iowa, Chicago & Eastern lines providing rail freight service to shippers across the Midwest and access to the national and global marketplace.
The RRIF program is designed to help short line and regional railroads acquire, improve, or rehabilitate rail equipment and infrastructure or refinance previous debt incurred for that purpose. Direct loans can pay up to 100 percent of the costs of an approved rail project, with repayment schedules of 25 years at interest rates equal to the cost of borrowing by the federal government.