A CN locomotive makes it's way through the CN yard in Montreal.The Canadian Press
Canadian National Railway Co. says it plans to invest $1.75-billion in 2012, slightly more than last year, to maintain and upgrade its rail network and fund growth and productivity initiatives.
CN says more than $1-billion of its capital investment program will be used for track infrastructure, including replacement of rail, ties and other track materials and bridge improvements.
The increase in spending from $1.7-billion a year ago comes as the railway operator expects intensified competition from its main Canadian competitor, Canadian Pacific Railway Ltd. which is overhauling operations.
It also plans to make rail line and yard improvements on the Elgin, Joliet and Eastern Railway Company that CN acquired in 2009, extend sidings along its Edmonton-Prince Rupert, B.C., corridor, and build longer passing tracks in Northern Ontario.
It will spend $150-million on equipment, including the acquisition of new freight cars and locomotive upgrading.
CN also expects to spend approximately $500-million on growth opportunities and to acquire information technology.
"CN is taking its business model to the next level with its focus on Operational and Service Excellence," said Claude Mongeau, president and chief executive officer.
"We are making major strides in improving all customer service touch points, delivering innovative products and achieving end-to-end supply chain collaboration while continually improving productivity. CN's capital spending is critical to running a safe, fluid and productive network and to attaining our growth and service objectives."
CN recently cancelled almost $40-million in future pension and other benefit payments to retired CEO, who has said he wants to take the top job at rival CP.
Last month, CN suspended pension and other payments to Harrison in response to overtures involving Canadian Pacific.
Bill Ackman, head of the U.S.-based Pershing Square activist fund which holds a 14 per cent stake in Canadian Pacific and is pushing for the ouster of current CEO Fred Green to increase its efficiency and shareholder value.