Claude Mongeau, president and chief executive officer of CN, said today the company will have invested almost C$400 million to buy and rehabilitate four short-line railways serving resource-rich regions of northern Alberta by year-end 2011.
“CN has stepped up to the plate in Alberta with sizable rail infrastructure investments,” Mongeau told the Edmonton Chamber of Commerce today. “Since 2006, we’ve purchased four rail short lines that are key to economic growth and prosperity in northern Alberta and have spent significant sums to maintain and improve them.
“Reliable, consistent rail service is essential to current and future oil sands and resource developments, and our infrastructure investments represent a clear and meaningful commitment to help foster that growth with quality rail transportation for our customers.”
Mongeau said CN’s short-line acquisitions and improvements have helped solidify its freight franchise in northern Alberta, characterized by important volumes of coal, sulphur, petroleum coke, steel pipe, grain, wood pulp, lumber and diesel fuel.
CN paid a total of C$76 million in 2006 and 2007 to buy the Mackenzie Northern Railway (MKNR), Lakeland & Waterways Railway (LWR), Savage Alberta Railway, Inc., (SAR), and the Athabasca Northern Railway (ANY). View the map of the former short lines CN has acquired.
Between 2006 and 2010, CN spent C$260 million to upgrade the infrastructure of these lines—including the installation of new rail, ties, ballast, track, other track materials, bridges, sidings and communication technology – and expects to spend another C$45 million this year on further upgrades. In addition to these expenditures, CN invested approximately C$10 million in a petroleum coke transload operation at Fort McMurray, the logistics gateway to Alberta’s oil sands production region.
As part of its purchase agreement, CN targeted the former ANY line to Fort McMurray for the largest portion of the improvements – a C$135 million rehabilitation program, which remains on-track to be completed by the end of 2011. CN’s purchase and
upgrading plan for the ANY was based on long-term traffic volume guarantees negotiated with shippers Suncor Energy Inc., OPTI Canada Inc., and Nexen Inc.
In addition to infrastructure investments, CN is helping its Alberta petroleum and chemicals customers grow with quality transportation and delivery of new supply chain efficiencies for grain and coal shipments, powered by innovation and a strong focus on productivity improvements.
Further growth opportunities are on the horizon. CN plans to build a new Calgary Logistics Park, which will provide seamless transportation solutions to rail customers moving products and commodities into and out of Calgary, one of the fastest growing cities in North America and a key logistics hub for consumer and industrial goods markets in southern Alberta.
While CN is important to Alberta, the province is equally important to CN – the province is home to almost 2,200 company employees and roughly 15 per cent of CN’s carloads originated or were destined for Alberta last year.
Mongeau said: “CN is a major economic force in Alberta and we’re here for the long haul, aiming to create value for our customers and economic prosperity for the province through operational and service excellence, critical infrastructure investments and commitment to greater supply chain collaboration.”