Mongeau: CN Investing to Buy, Rehabilitate Four Short Lines

EDMONTON — Claude Mongeau, president and chief executive officer of CN, said the company will have invested almost C$400 million to buy and rehabilitate four short-line railways serving resource-rich regions of northern Alberta by year-end 2011.

“CN has stepped up to the plate in Alberta with sizable rail infrastructure investments,” Mongeau told the Edmonton Chamber of Commerce today. “Since 2006, we’ve purchased four rail short lines that are key to economic growth and prosperity in northern Alberta and have spent significant sums to maintain and improve them.

“Reliable, consistent rail service is essential to current and future oil sands and resource developments, and our infrastructure investments represent a clear and meaningful commitment to help foster that growth with quality rail transportation for our customers.”

Mongeau said CN’s short-line acquisitions and improvements have helped solidify its freight franchise in northern Alberta, characterized by important volumes of coal, sulphur, petroleum coke, steel pipe, grain, wood pulp, lumber and diesel fuel.

CN paid a total of C$76 million in 2006 and 2007 to buy the Mackenzie Northern Railway (MKNR), Lakeland & Waterways Railway (LWR), Savage Alberta Railway, Inc., (SAR), and the Athabasca Northern Railway (ANY). Click on for a map of the former short lines CN has acquired.

Between 2006 and 2010, CN spent C$260 million to upgrade the infrastructure of these lines — including the installation of new rail, ties, ballast, track, other track materials, bridges, sidings and communication technology – and expects to spend another C$45 million this year on further upgrades. In addition to these expenditures, CN invested approximately C$10 million in a petroleum coke transload operation atFort McMurray, the logistics gateway to Alberta’s oil sands production region.