CN budgets slightly more for capex in 2014

CN announced yesterday that it's budgeting $2.1 billion for capital expenditures in 2014 compared with last year's $2 billion budget (figures are in Canadian dollars).

The Class I plans to spend more than $1.2 billion to upgrade track infrastructure and to improve the safety, productivity and fluidity of its network. The funds will cover the replacement of rail, ties and other track materials; bridge improvements; branch-line upgrades; strategic initiatives; and additional track improvements in western and eastern Canada, and in the United States.

CN also is budgeting $600 million in 2014 for facilities, including transload terminals, distribution centers and the completion of its Calgary Logistics Park project.

Equipment expenditures are budgeted at $300 million this year, including the acquisition of an additional 45 new high-horsepower locomotives. By year's end, the Class I will have acquired 763 high-horsepower locomotives over a 10-year period, representing more than half of the high-horsepower mainline fleet, CN officials said in a press release.

"CN is committed to making continued improvements in its safety performance — infrastructure investments are critical to this, as well as to driving improvements in customer service and taking advantage of freight opportunities to grow the business at low incremental cost," said CN President and Chief Executive Officer Claude Mongeau. "Investments in our network and distribution capability, the acquisition of new locomotives and equipment, and the enhancement of information systems and technology will help support our agenda of operational and service excellence."

Also in 2014, CN plans to complete construction of two state-of-the-art training facilities in Winnipeg, Manitoba, and suburban Chicago. The facilities will help strengthen the railroad's safety culture and "prepare a new generation of safety-conscious railroaders," CN officials said.