After 21 years of struggling to meet its basic track maintenance needs, Iowa Interstate Railroad Ltd. has gotten the equivalent of a home-equity loan from the federal government to upgrade its entire system.

The Cedar Rapids-based railroad plans to begin a two-year system-wide renovation of its tracks on July 15, using funds from a $32 million federal loan approved earlier this month. The upgrade will allow Iowa Interstate, whose tracks run through downtown Des Moines, to haul heavier loads per car to better meet shippers’ demands, said Dennis Miller, the railroad’s president and CEO.

“With (gasoline) prices increasing, our business has been increasing,” Miller said. “So we’re gearing up for the long haul.”

Last week, the Iowa Railway Finance Authority board approved a partial release of the mortgages it holds on Iowa Interstate property through the state, which clears the way for the railroad to receive the federal loan. Iowa Interstate owes the state agency approximately $2.7 million on its original loan of about $30 million, which it expects to pay off with the proceeds from the federal loan.

The planned upgrades do not address any of the discussions Des Moines officials have had regarding whether “quiet zones” should be established along downtown crossings. City officials plan to meet with Iowa Interstate representatives within the next few weeks to discuss that potential project, which has an estimated $3.55 million price tag.

Owned by Pittsburgh-based Railroad Development Corp., Iowa Interstate operates on more than 500 miles of track connecting Omaha and Chicago on the former Chicago, Rock Island and Pacific mainline, as well as a branch line in Illinois from Bureau to Peoria. Last year Iowa Interstate reported revenues of approximately $36 million.

Miller said normal freight service will continue throughout the two-year project. Traffic may be rerouted some crossings as those are rebuilt, he said. Though the project will include the construction of a few additional sidings, the major focus will be preventive maintenance, he said.

“The end result is we’ll be able to haul 286,000-pound loads rather than 263,000-pound loads,” Miller said. “Most of the cars being constructed today are the heavier cars, coal trains, for instance, and a lot of the unit shuttle grain trains, so it’s a demand from the customers, too. And if other railroads desire to use our track, we wouldn’t be constrained.”