State Finalizes Sale of MRC Rail Line

For Immediate Release: Wednesday, February 24, 2021

Contact: Julie Stevenson, Strategic Communications Coordinator, 605-773-2898

 PIERRE, S.D. – On Feb. 17, 2021, the South Dakota State Railroad Board authorized the South Dakota Department of Transportation to sell the rail line from Mitchell to Rapid City (MRC) to Ringneck and Western Railroad, L.L.C. for $13 million. The purchase price will be paid to the department, with $5 million paid at closing and the remaining balance paid in equal installments of $1.6 million over the next five years. 

“We appreciate the Board’s thoroughness in finalizing the sale of this state-owned railroad to Ringneck and Western Railroad,” says Interim Secretary Joel Jundt. “The sale of the MRC line is another step in fulfilling our mission to enhance rail transportation for this important corridor. The MRC railroad provides critical freight movement for many shippers. The capital investments made in the line provided great benefits to the state in the short term. By transferring ownership to Ringneck and Western Railroad, many additional opportunities will occur for years to come.”

Ringneck and Western Railroad will be operated by Watco Transportation Services, the largest privately owned short line railroad holding company in the United States. “Watco has a reputation for providing safe and efficient service to its customers,” said Steve Scharnweber, Secretary of the South Dakota State Railroad Board. “We expect this sale to spur development along the line and boost the state’s economy.”

Watco was recently named to Forbes' 2021 list of America’s Best Mid-Size Employers — the only transportation and supply chain services company to make the list.

“Thank you to the State DOT, the Board, and the citizens of South Dakota for being such good stewards of these rail assets,” says Watco’s Executive Chairman Rick Webb. “We are honored to continue building from this tremendous foundation and excited to be coming to South Dakota.”

Immediately after the sale is closed, Ringneck and Western will take over rail operations, and shippers will receive a $25 reduction in the current $50 surcharge per loaded railcar. After the purchase, the railroad has committed to spend at least $2 million per-year for ten years on track maintenance.

Ringneck and Western has also agreed to work with the department to complete construction of a rail siding near Kimball. The project will improve shipping efficiency and is partially funded by a federal grant. Once the siding is completed, the agreement requires Ringneck and Western to pay the department $1.5 million in three yearly installments of $500,000.

The sale agreement also includes provisions aimed at protecting the quality of future rail service. If the owner plans to abandon the line or discontinue service, the department may repurchase the line.

More information about the sale can be obtained by contacting Jack Dokken at 605-773-7045 or Joel Jundt at 605-773-5105.

The mission of the South Dakota Department of Transportation is to efficiently provide a safe and effective public transportation system. Read more about the innovative work of the SDDOT at https://dot.sd.gov.

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