CN to Spend $1.5 Billion in 2006

TORONTO - Dec 2/05 - SNS -- Capital spending projects planned by CN Rail for 2006 total CDN $1.5 billion, up 9% from this year, says Hunter Harrison, president and chief executive officer of CN.

CN will spend approximately $800 million on its infrastructure, replacing rail, ties, ballast, and other track material and upgrading bridges and signalling systems. CN will also spend close to $250 million on network productivity initiatives and strategic projects, including siding extensions in Western Canada, investments in the company's Prince Rupert, B.C., corridor, and the reconfiguration of Johnston Yard in Memphis, Tenn.

Equipment spending is targeted to exceed $325 million in 2006. This will include more than $150 million to buy new locomotives and to rejuvenate the existing locomotive fleet, and $175 million for new cars and the refurbishment of the current fleet.

CN also plans to spend close to $150 million on facilities, information technology and other projects to allow the company to tap new growth opportunities and drive overall efficiency gains.