the project proposal met many federal requirements for the loan but cited concerns that the railroad might not be able to handle cost overruns during construction or to repay the loan after construction was completed. 2002–2007: consolidation with IC&E DM&E hauled nearly 60,000 carloads of freight in fiscal year 2002, serving approximately 130 customers along the railroad's mainline. Of these shipments, 53% were grains or grain products, 24% were bentonite and kaolin clay, 7% were cement, and 5% were wood and lumber products; the remaining 11% were split among all other types of freight. On February 21, 2002, DM&E announced that it would purchase the railroad assets of I&M Rail Link (IMRL) from its then-owner The Washington Companies. DM&E renamed the IMRL property to Iowa, Chicago and Eastern Railroad (IC&E) and began its on July 30, 2002. A purchase price was not stated in the original announcement, but an article in the May 2002 Trains Magazine reported that several industry sources believed the total to be around $150 million. DM&E and IC&E combined management under the holding company Cedar American Rail Holdings. Locomotives of both railroads were given a unified paint scheme and interchanges were streamlined between the two railroads. The administration of both railroads was handled by Cedar, further streamlining processes between the two railroads. The combined DM&E–IC&E system made up the largest Class II railroad (by route-miles) in the United States; it was also the eighth largest system of all American railroads and the only system with direct rail connections with all Class I railroads in North America. In its first twenty years of operations, the railroad's revenues had increased more than tenfold, from $22 million in 1987 to $258 million in 2006, with $290 million projected in 2007 and $340 million for 2008. Its operating ratio (the ratio of operating expenses to revenues) declined to 70.2% in 2006 and was projected to improve further to 67.6% in 2007. Its traffic was a mix of agricultural, coal, and industrial products, and ethanol shipments were projected to exceed one billion gallons in 2008. Acquisition by Canadian Pacific On September 4, 2007, Canadian Pacific (CP) announced it was acquiring the DM&E from its owners, London-based Electra Private Equity, for US$1.48 billion, and future payments of over $1.0 billion contingent on commencement of construction on the Powder River extension and specified volumes of coal shipments from the Powder River basin. The