Canadian Pacific Railway (CP) has pledged up to an extra $100 million to its previously planned capital budget for track “enhancements” in its Prairie network.
CP’s addition to the $1.1 billion capital spending plan it announced in December for the 2013 fiscal year follows a similar move by rival Canadian National Railway (CN), which last month said it would boost its 2013 capital spend to about $2 billion, up $100 million.
Calgary-based CP’s plans call for “advance” track upgrade work on its North Main line between Winnipeg and Edmonton, and upgrades to the signaling system on its main line between Chicago and Moose Jaw, Sask.
CP said it will also be “opportunistically acquiring core assets that would otherwise be leased,” in order to save on costs and “strengthen the balance sheet.”
“By taking these opportunities now to further improve our operations, we will be better positioned to respond to our customers’ shipping needs,” CP CEO Hunter Harrison said in a release.
In all, the company said, it will put an extra $75 million to $100 million into its 2013 capital investment program.
CN, similarly, said in April it would move to “improve network resilience” by adding “capacity enhancement projects in its Edmonton-Winnipeg corridor” in its previously-announced capital spending plan.
CN’s promise for capacity enhancements came as its first-quarter report showed reduced net income following a period of “extreme cold and heavy snow in Western Canada, which hampered operations, congested the network and constrained volume growth.”
Both of Canada’s major railways booked higher Q1 revenue per carload in their grain-handling segments, despite lower Q1 grain handles compared to the year-earlier period.
The higher grain revenue came as a coalition of grain handlers and other shippers complained in March of the worst rail service they’ve seen in three years.
The shippers, who said rail service began to decline in January, have since called for stricter terms in federal legislation meant to compel the railways to reach service level agreements with shippers.