CORRECTED-UPDATE 1-CN Rail, beset by derailments, to upgrade western Canada network

Thu Apr 16, 2015 1:23pm EDT
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(In seventh paragraph, corrects location of company headquarters.)

TORONTO, April 16 (Reuters) - Canadian National Railway Co , which has seen a string of derailments recently, will spend C$500 million to upgrade its feeder network in Western Canada to improve safety, the railway said on Thursday.

A Reuters investigation last month found that CN Rail's safety record had deteriorated sharply in 2014, reversing years of improvements, as accidents blamed on poor track conditions spiked.

CN Rail said at the time it was "keenly aware" of the trend and blamed it, in part, on rising freight volumes especially in Western Canada.

The new multi-year program is allocating about C$100 million for branch lines in northern Alberta in 2015. CN plans capital spending of C$2.6 billion in 2015 and the upgrade does not change that figure, a spokesman said.

The infrastructure upgrade, which includes heavier rail and new ties, focuses on feeder lines in Alberta, Manitoba and Saskatchewan. Feeder lines are sometimes built using lighter rail than main routes, but can still carry heavy traffic especially as crude moves out of Alberta's oil sands.

CN's freight volumes have jumped more than 50 percent in Western Canada over the past five years amid a boom in oil by rail shipments.

The Montreal-based company suffered a string of derailments on its main line in February and March, including three along one section of its main route through northern Ontario. CN has slowed trains in the area while investigations continue.

Canada's transport minister, referring to the Ontario derailments, told Reuters last week that the railway "really should be working on their infrastructure." (Reporting by Allison Martell)