(Bloomberg News circulated the following article by Rob Delaney on December 14.)
CALGARY — Canadian Pacific Railway Ltd., the country’s second-biggest railroad, said it will raise its 2007 capital budget by as much as 5.9 percent to buy locomotives and make track networks more flexible.
The Calgary-based railway said in a statement today it will spend C$885 million ($765 million) to C$895 million in 2007, from about C$845 million this year. The company’s 2006 spending was 2.4 percent higher than an estimate of C$825 million announced last year.
Canadian Pacific’s spending increase will outpace an estimated 4 percent rise announced by Canadian National Railway Co., the country’s biggest railway, on Nov. 29. Canadian Pacific’s spending will pick up after falling this year from C$920 million in 2005, when it increased rail capacity at the fastest pace in two decades.
More than two-thirds of spending next year will be for upgrading tracks, including extensions of passing lanes in single-track areas, as well as land acquisitions for developments along the company’s network. About a sixth of the program will be for new locomotives and fuel-saving modifications, it said.
Canadian Pacific shares fell 5 cents to C$63.17 yesterday on the Toronto Stock Exchange, and have risen 30 percent this year, beating a 12 percent gain for Canadian National’s shares.