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Yesterday, CN announced plans to upgrade Kirk Yard in Gary, Ind., and relocate its Chicago-area locomotive repair shop to the 350-acre yard.

The $165 million project is designed to increase the yard's processing capacity from 1,500 cars to 2,500 cars per day. The railroad plans to add classification tracks and receiving and departure tracks to enable the yard to handle longer and more efficient trains, improve interchanges, and consolidate switching operations in the Chicago area. To be completed during the next four years, the project also calls for a new wastewater treatment facility, utility upgrades and renovations to several yard buildings.

Locomotive repair work currently is performed at a shop in Homewood, Ill., south of Chicago. Work gradually will be transitioned to a new 155,000-square-foot shop at Kirk Yard, which will service CN's fleet of locomotives operating across the U.S. network. The shop relocation will free up space in CN's Markham Yard for redevelopment adjacent to the Class I’s Chicago Intermodal Terminal, CN officials said in a prepared statement.

The railroad has partnered with the state of Indiana, Regional Development Authority and the city of Gary on an economic development incentive package for the yard development.

CN acquired the Kirk Yard as part of the Elgin, Joliet & Eastern Railway acquisition in 2009. With Kirk Yard as the primary Chicago-area classification yard, rail satellite operations in Markham, Schiller Park, Hawthorne, Glenn and Joliet can focus on local car pick-up and delivery services, CN officials said.