CN’s Alberta shortline rail acquisitions, upgrades total C$400 million

Canadian National has invested almost C$400 million (US$408 million) to buy and rehabilitate four shortline railways serving resource-rich regions of northern Alberta, Canada, by year-end 2011. "CN has stepped up to the plate in Alberta with sizable rail infrastructure investments," Claude Mongeau, president and CEO of CN said. "Since 2006, we've purchased four rail shortlines 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 (US$7.1 million) in 2006 and 2007 to buy the Mackenzie Northern Railway, Lakeland & Waterways Railway, Savage Alberta Railway, Inc., and the Athabasca Northern Railway. Between 2006 and 2010, CN spent C$260 million (US$265 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 (US$46 million) this year on further upgrades. As part of its purchase agreement, CN targeted the former ANY line to Fort McMurray for the largest portion of the improvements, a C$135 million (US$138 million) rehabilitation program, which remains on-track to be completed by the end of 2011. CN's purchase and upgrading plan for the ANY was based on long-term traffic volume guarantees negotiated with shippers Suncor Energy Inc., OPTI Canada Inc., and Nexen Inc. CN plans to build a new Calgary Logistics Park, which will provide transportation solutions to rail customers moving products and commodities into and out of Calgary, a key logistics hub for consumer and industrial goods markets in southern Alberta.