Canadian Pacific Railway will spend between $964 million to $1.065 billion this year for capital projects, saying the money will help it meet rising demand for rail freight service while cutting costs.
CP, the second-largest freight railroad in Canada and sixth-largest in all of North America, will spend about $690 million on track maintenance, $203 million for growth and productivity projects, $81 million for technology upgrades for shipment visibility, and more than $40 million for government-mandated investments – mainly automated train control systems.
The 2011 capital budget compares with about $700 million the company initially planned to spend on its network in 2010, although it later increased that level some as freight traffic strengthened.
By The Numbers: U.S. Surface Trade With Canada.
Chief Financial Officer Kathryn McQuade said CP is focused on improving service reliability, asset velocity and productivity. “With strong demand projected in many of our commodity-based businesses,” she said, “this capital plan will enable us to meet our customers’needs and continue to lower our operating ratio.”
As business picks up in the recovery from the steep 2008-09 recession, CP said it aims to sustain efficiencies it gained from running longer trains and consolidating some yards and repair facilities.
CP also plans to pursue growth in its intermodal, transload and energy business and to invest in “fast payback productivity and technology projects.”
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