January 17, 2012 / 11:04 PM / 6 years ago

Canadian Pacific earmarks C$1.2 billion in capital plan

2 Min Read

(Reuters) - Canadian Pacific Railway Ltd (CP.TO), which is under pressure from an activist shareholder, said on Tuesday it will invest between C$1.1 billion ($1.08 billion) and C$1.2 billion in its business operations this year.

The money will be used to renew infrastructure and improve its network, and will also be pumped into certain expansion projects, Canada's second biggest railroad said.

"We are confident that the investments we are making under our 2012 capital plan will allow us to achieve a low 70s operating ratio in the next three years," Chief Executive Fred Green said in a statement.

In its latest results, CP's operating ratio, an important measure of a railway's productivity, was 75.8 percent. The lower the ratio, the more efficient the railway.

CP has the weakest operating ratio of North America's six largest railways, a key reason why activist shareholder William Ackman and his Pershing Square Asset Management is targeting the company for a turnaround.

($1=$1.01 Canadian)

Reporting by Nicole Mordant in Vancouver; editing by Rob Wilson

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