TORONTO: Canadian National Railway Co plans capital spending of C$2.1 billion ($1.92 billion) in 2014, the country's largest rail operator said on Wednesday, slightly more than it invested last year on its track, fleet, facilities and safety equipment.
The Montreal-based railway, which spent approximately C$2 billion on such projects in 2013, has earmarked the bulk of its budget for track infrastructure, and to improve the safety and productivity of the network.
CN will spend more than C$1.2 billion to replace and upgrade rail, ties, bridges and branch lines in Canada and the United States.
The railway, which expects double-digit growth in earnings per share this year has been hit hard by extreme winter in December and January, which has bloated its costs for labor, services and materials.
Chief Executive Claude Mongeau said the investments will position CN to take advantage of opportunities in intermodal, energy, and other resource and manufacturing markets.
The company budgeted about C$300 million to improve its fleet, with the purchase of 45 new high-horsepower locomotives. In 2013, it took delivery of 44 new and 37 second-hand high-horsepower locomotives.
CN plans to spend C$600 million on facilities to grow its business, including transloading terminals, distribution centers and the completion of its Calgary Logistics Park.
Money is also earmarked for technology to improve service, efficiency and productivity. All budgets include capital projects to improve safety, CN said, such as improvements to system-wide flaw detection and the completion of two training facilities.
Railway safety has come under intense scrutiny following a string of dramatic explosions from the shipment of crude by rail, most notably a crash last summer in Lac Megantic, Quebec, which killed 47 people.
CN and its smaller rival, Canadian Pacific Railway Ltd, are charging shippers more to transport crude oil in the older tank cars involved in many of these accidents, hoping to discourage their use.
Shares of CN were up 63 Canadian cents, or 1 percent, at C$61.91 in morning trading Wednesday on the Toronto Stock Exchange.