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3/19/2008



Rail News: Rail Industry Trends

CN budgets more than $1 billion for MOW in '08


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As part of a 2008 capital expenditure budget of $1.5 billion, Canadian National Railway Co. plans to spend about $1.1 billion on maintenance-of-way in eastern and western Canada, and its U.S. southern region.

The Class I has budgeted $430 million for western Canada projects, such as rail, tie and bridge replacements and improvements. CN also will extend sidings and improve terminals, including the new Port of Prince Rupert container terminal, and upgrade the recently acquired Athabasca Northern Railway.

In addition, CN has budgeted $300 million for eastern Canada projects, such as the continuing reconfiguration of MacMillan Yard north of Toronto, and $300 million for U.S. projects, including rail, tie and bridge work. The railroad plans to complete a multi-year, $100-million upgrade to Johnston Yard in Memphis, Tenn., improve other U.S. terminals and build and extend sidings.

The '08 capital spending program excludes the $100 million CN plans to spend to upgrade the Elgin, Joliet & Eastern Railway. The railroad will begin the upgrades later this year if the Surface Transportation Board approves its “J” acquisition deal. However, the program does include $250 million for improvements to facilities, including transload and distribution centers, and information technology upgrades.

To improve day-to-day rail inspections and boost all maintenance programs, CN expects to roll out of the first phase of a "Precision Engineering" program, which features a mobile computer system to help manage engineering processes more efficiently, reduce trackwork-related train delays, and increase material and equipment utilization.


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