Canadian National to Boost '06 Spending by $1.3 Billion

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anadian National Railway Co. said Friday it would increase its 2006 capital spending to about $1.3 billion on capital programs next year, an increase of 9% over this year’s spending.

Canada’s largest freight rail line will spend about $690 million on its infrastructure, replacing rail, ties, ballast, and other track material and upgrading bridges and signaling systems, CN said in a statement.

CN will also spend about $215 million on network productivity initiatives and strategic projects, including siding extensions in Western Canada, and the reconfiguration of a rail yard in Memphis, Tenn.

Equipment spending is targeted to exceed $280 million in 2006, including more than $130 million to buy new locomotives and to rejuvenate the existing locomotive fleet and $150 million for new cars and the refurbishment of the current fleet.

CN said it also plans to spend close to $130 million on facilities, information technology and other projects to allow the company to tap new growth opportunities and drive overall efficiency gains.

“At close to 20% of revenues, CN's capital spending plan for next year represents a significant commitment to maintain a solid rail infrastructure and to better serve our customers across North America,” said E. Hunter Harrison, CN’s chief executive officer.