April 16, 2015 / 4:18 PM / 4 years ago

CN Rail, beset by derailments, to upgrade Western Canada network

TORONTO (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.

As part of the program, CN plans to upgrade its Slave Lake subdivision, a 133-mile (213 km) section of track in northern Alberta.

Data obtained by Reuters shows that four CN trains derailed along that section in 2014, more than on any other subdivision. In June, two trains derailed in the same place in just two days. The data indicates that at least three of the incidents were caused by track problems.

“We’re delighted to hear that CN is making a sizeable investment on our line,” Tyler Warman, mayor of the town of Slave Lake.

The Montreal-based company suffered a string of derailments 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.

Raitt, referring to the Ontario derailments, told Reuters last week that the railway “really should be working on their infrastructure”.

($1=$1.215 Canadian)

Additional reporting by David Ljunggreen in Ottawa; Editing by Peter Galloway

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