Rail Weekly Update #7

27 May 2004

AHEAD OF SCHEDULE

As of May 27th, we have installed just over 42 of the roughly 97 track miles scheduled to be completed by November 19th. As of now, it appears we will meet or beat that schedule. The CWR crew will take a few days off over the Memorial Day Holiday and then will begin again at MP 235.5 heading westward where there is a total of 32 track miles of CWR that still needs to be laid. We expect to be completed with all of the CWR on the DM&E by the third week of July.

¨ RJ Corman will complete the third section of CWR, between Arlington and Lake Preston on Friday the 28^th which gives us a 20 mile stretch of 136# CWR between MP 298 and MP 318

¨ DM&E cranes continue to pick up the recovered rail and OTM from the CWR projects for other projects or for sale as scrap.

¨ Spot tie installation is completed on the first section of CWR and most of that section of track has now been raised up to 25 mph.

¨ We have unloaded the last two rail trains on the DM&E this week, completing the last one today between Lake Benton and Tyler. One of these trains has 20 strings of curve replacement rail for the IC&E Railroad that will be unloaded later this week and over the weekend.

¨ The remaining 3 rail trains (230,000 feet) are scheduled to be here by the second week of July. These last three rail trains will all be unloaded on the IC&E, 2 for the Calmar project and the other for the 2004 curve program.

¨ Rail laying on the Calmar project is now expected to begin after the 4^th of July to allow for the installation of all of the ties and the switches.