System-Wide Weekly Update #27

21 October 2004

Another very exciting week on both properties as several projects got completed and the final few projects of the year got started.

On the IC&E the Koser tie crew finished their tie installation projects for the year this week near Muscatine. They will now finish the year by installing new CWR in 28 curves south of Ottumwa on the Kansas City sub to remove slow orders. This curve replacement project will take the IC&E crew until about Thanksgiving to fully complete. Also on the IC&E the LA Colo tie crew is mobilizing their men and equipment in Liberty, Missouri preparing to install 10,000 ties on track 1. This project is expected to begin November 1^st and be completed by the 14^th. Bruce Wold’s utility crew just recently completed the installation of the Muscatine crossovers near Sampson Street this past week and will soon move to Moravia to assemble and install new switches and track for a connection to the APNC Rail Road for new business opportunities in that area.

On the DM&E the Florence siding was put into service on Friday the 15^th and all slow orders were removed from the area after an inspection on the 16^th. The remainder of this project, the connection with the BN, will be put into service as soon as the BN engineering department installs the necessary track to connect with the DM&E track that is already in place. Elsewhere on the DM&E the tie crews from Railworks and LA Colo both completed their work on the Huron sub this past week and both have relocated their men and equipment elsewhere on the two properties. The Colo crew has moved to Liberty, Missouri as was mentioned above and the Railworks crew has moved to the Rochester, Minnesota area to install about 2,000 ties on the Seneca line, a project that should be completed by the second week of November.

Ballast unloading and surfacing continue at record paces on both properties and we have now surpassed 700 surfacing pass miles and near 240,000 tons of ballast for the year, over 90% of this year’s goal.

Bridge crews continue to do an excellent job and we still expect all of their projects to be completed on time.

¨ Equipment problems have been very minor and have not been delaying any of the projects.

¨ All track ties have bee received on both properties and have either been unloaded at the needed sites are in the process of being unloaded this week.

¨ The Osmose bridge crews have finished their projects on the DM&E and left the property leaving the E-80 crews as the only bridge contractors remaining on the property. E-80 currently has two crews working on bridges and soon will have a third to complete this year’s bridge projects.

¨ LG Everist and New Ulm Quartzite Quarry continue to do an excellent job supplying ballast for all of our projects even though this year’s requirements are nearly three times the normal level.