Canadian National Railway is spending more than $7 million to provide rail service to two new oilseed crushing plants at Yorkton, Sask.
The company will invest $5.6 million to improve the rail line between Yorkton and CN’s main line at Melville, Sask., and $1.8 million to build a new track connection to the LDM Food plant owned by Louis Dreyfus and Mitsui. Other related track work will push the total bill to around $7.5 million.
CN is also seeking regulatory approval from the Canadian Transportation Agency to build a connection to the crushing plant built by Richardson Oilseed Ltd. and scheduled to open next year.
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CN spokesperson Kevin Franchuk said the railway is committed to provide service to both plants.
Canadian Pacific Railway spokesperson Breanne Feigel said the company had previously done the work necessary to provide access to both plants, including a passing track between the two facilities, and to improve service levels. CPR’s main line runs through Yorkton.
“We’ve already invested the capital so we don’t have any new construction to do,” Feigel said.
Dean Klippenstine, procurement manager at the LDM plant, said having direct access to both rail networks will enable the crushing plant to minimize costly switches between railways that might be necessary when shipping to the United States.
It also reduces the risks associated with being dependent on one railway, given the anticipated heavy rail program.
Both rail companies have committed the equipment and power necessary to run the plant at capacity, he added.
Jean-Marc Ruest, vice–president of corporate affairs for Richardson, said having both railways serving the plant provides the opportunity for competition and lower freight rates.
“However, from our perspective the biggest benefit is the operational flexibility provided by an additional carrier with respect to the availability of cars, destinations and so on,” he said.
CN is replacing 42 kilometres of rail on the Yorkton to Melville line with heavier, 100-pound steel, welded into continuous segments several kilometres in length.
The company said the heavier steel will be a key to handling the increased rail car weights and traffic volumes generated by the crushing plants.
CN now moves an average of one train a day on the line. That is expected to increase by about three trains a week once both plants are fully operational.
“These investments are critical to serve a growing new industry that’s extremely important to the region and its agricultural producers,” said Mike Cory, senior vice-president for CN’s western region.
The spending is in addition to a 2009 capital budget of $38.4 million for rail infrastructure projects in Saskatchewan, including replacement of ties and other track material and improvements to bridges and crossings.
