System-Wide Weekly Update #7

27 May 2004

This week has been another hectic one around the DeSmet to Brookings area with CWR installation, tie installation, two bridge crews, surfacing, ballast dumping and cleanup all occurring at the same time. The Corman group will complete the section of CWR between Lake Preston and Arlington tomorrow the 28^th and will return on the 4^th of June to start laying rail at MP 236.5 toward Tyler. The track conditions are continuing to improve on the Owatonna sub as some of the track speeds have been raised to 25mph. The initial ballast dumping on the Owatonna sub should be completed by the end of the first full week of June and the first pass of surfacing should be completed by the second week of June. Spot surfacing will be done after that to maintain the area at 25 mph. Tie installation continues ahead of schedule with over 65,000 installed to date. Surfacing remains on schedule with over 145 pass miles completed at this time and the overall reliability of the equipment has been high. Dirt work is progressing on the Elkton siding extension despite the recent rains and that dirt work is expected to be com-pleted by the end of the 2^nd week of June. The dirt work for the DeSmet siding is expected to begin the first week of June and will be completed by the end of the month.

¨ Equipment continues to be very reliable with only minor breakdowns reported

¨ Some relief has been noted for the gondola supply and we have started receiving ties and bridge material as well as being able to ship out scrap material recovered from the CWR projects

¨ All new, air operated ballast cars have left the supplier and are in route to New Ulm or Brookings for loading. We continue to receive excellent reports from the field on these cars.

¨ Birmingham Diamonds have been loaded and shipped with expected arrival in KC next week. These pre-plated diamonds will be pre-assembled on site and we now plan installation during the week of July 12^th.

¨ 3 new siding projects have been approved, 1) an extension of 4000’ at Elkton 2) rebuilding the Sanborn siding and 3) an extension of nearly 4000’ at De Smet.