UPDATE 2-CN Rail, beset by derailments, to upgrade Western Canada network

Thu Apr 16, 2015 2:30pm EDT
 
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(Adds reaction, context of growth in Western Canada)

By Allison Martell

TORONTO, April 16 (Reuters) - Canadian National Railway Co , hit by a recent string of derailments, will spend C$500 million ($412 million) to upgrade its feeder network in Western Canada to improve safety and boost capacity, the railway said on Thursday.

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

CN, Canada's biggest railway, 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 multiyear program allocates 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.

CN's freight volumes have jumped more than 50 percent in Western Canada over the past five years as it handles more industrial products and natural resources, including oil. CN said volumes are still rising.

The infrastructure upgrade, which includes heavier rails 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 such as crude oil moving out of the northern Alberta oil sands.

"We are pleased that CN has responded in order to continue to provide safe and reliable transportation of our goods to market," Transport Minister Lisa Raitt in a statement.   Continued...