System-Wide Weekly Update #12

1 July 2004

We have entered a very rare period in the production schedule for this year’s work. For the first and only time during the 2004 production season, we have a two week period where no CWR is being unloaded or laid. This will allow the other crews to catch up on some of the preparation work for future projects and clean up work from past. The bridge crews and tie gangs will benefit from the rail gangs absence. In particular, the E-80 crew has started the installation of the ballast tubs on the Sioux River Bridge and good track time has allowed the LA COLO tie crew to complete their work up to the Garvin area on the DM&E. The Colo crew will take the next several weeks to install ties and CWR on the IC&E property before returning to the DM&E at Garvin to finish the tie project on the DM&E later in the year. The siding projects will also be making significant gains over the next few weeks. The track construction on the Cobden siding has begun and will be nearly 20% complete by week’s end and will be over 30% complete by the end of next week. Along with that siding project, we have received delivery of the switches for the Elkton and De Smet siding extensions. These two extensions will be built as soon as all remaining needed material is delivered to Elton and the sub grade work is completed in De Smet. This is in addition to removing the restrictions on the Sanborn siding and elevator track late week. Since the CWR laying crews are gone this week, the amount of CWR that has been installed remains at 65 miles with 32 miles to go. Only 8 track miles remain on the DM&E! Tie production has topped 120,000 ties being installed and surfacing has progressed to over 270 miles with over 110,000 tons of ballast being unloaded.

¨ We have had a few equipment problems, most notably two of our production tampers. This has delayed some surfacing progress on the IC&E, however, both tampers are now repaired and we expect the production to be increasing over the next few weeks.

¨ A large shipment of ties has finally been received and is now being unloaded on the DM&E property, alleviating fears that we would not receive our last 30,000 ties. These ties are being unloaded between Verdi and Volga with the aid of the Brandt truck.

¨ Ballast continues to be provided for surfacing projects at record paces and the new air operated ballast cars are proving to be extremely helpful for the engineering employees.

¨ The Birmingham Diamonds and transfer switch are now pre-assembled with a scheduled installation date of July 13^th. This 24 hour track outage has been coordinated with the UPRR, BNSF, NS, KCS, and our own operating department.

¨ Sanborn siding was put into service on June 24^th and has been helping transportation with congestion problems in that area. Significant progress is now being made on the track work on the Cobden siding.