Canadian National to help short lines tap rail infrastructure improvement funds

by Canadian Shipper

Canadian National will work closely with its United States short line partners to help them secure federal rail infrastructure improvement funds, says Paul M. Tellier, CN’s president and chief executive officer.

Tellier said CN will “strongly support” the short line industry’s lobbying campaign for legislation to provide federal funding to underwrite infrastructure improvements so that the industry can accommodate loaded freight cars weighing up to 286,000 pounds.

In the meantime, Tellier said, CN is prepared to explore with its U.S. short line connections ways to help them get better access to the existing US$3.5-billion Railroad Rehabilitation and Improvement Financing Program (RRIF). Some of the financial requirements of the RRIF program, including up front cash payments known as credit risk premiums, have made it difficult for short lines to qualify.

CN said it could help shoulder a portion of the up front cash payments, or credit risk premiums, RRIF requires; tie new traffic in heavier rolling stock to future short-line loan payments; and/or guarantee traffic patterns to lower the RRIF credit risk premium.

CN last year agreed to provide US$2.4 million to the Columbus and Greenville Railway (C&G) in Mississippi to help it upgrade its rail infrastructure. Over the next 10 years, a major C&G shipper, Delta Western Feed Mill, Inc., will use CN to route a substantial portion of grain and grain products to its plant in Indianola, Miss.

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