CN Announces $500 Million Program to Upgrade Feeder Rail Lines in Western Canada

CN Rail on Thursday announced a multi-year program to spend around $500 million to improve its feeder rail lines in Alberta, Manitoba and Saskatchewan.

A news release from the company does not mention grain, but indicates the upgrades will occur on lines “handling rising volumes of industrial products, natural resources and energy-related commodities.”

Approximately $100 million will be spent in 2015 on branch lines to accommodate freight volume growth in the Peace River region, including heavier rail, crushed rock ballast and new ties.

“CN is building for the future with large capital investments in long-term safety and capacity improvements to ensure it continues to play its role as a true backbone of the economy,” said Claude Mongeau, president and chief executive officer.

“CN sees significant long-term potential in its customer base located on its Western Canada feeder network. We want to provide our customers with the capacity for continued efficient freight transportation services that increase their competitiveness in North American and global markets, as well as ensure our rail infrastructure is as safe as possible,” he continued.

Overall, CN is planning to spend $2.6 billion on capital in 2015, up from $2.3 billion in 2014.

Company spokesperson Mark Hallman indicated CN’s capital expenditures this year will account for more than 20 per cent of total revenues – putting CN “at the upper end of investment rates in the rail industry.”

The railway says freight volumes in Western Canada have risen by more than 50 percent in the past five years.

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