28 August 2004 CPR Says Line Expansions to De-Bottleneck Mainline Needs Federal Assurances Canadian Pacific Railway would like to go ahead with plans for major line expansions in Western Canada but will hold off until it gets assurances from Ottawa that it will not be forced to open up its rails to other companies, president Rob Ritchie said Friday.   Massive increases in virtually all business segments of Canada's second-largest railway over the last year have led to several major bottlenecks between British Columbia and Manitoba that require the doubling of track.   But a "constant undertone" from the federal government, favouring open access to rail lines, makes multi-million dollar infrastructure spending an unsafe investment, Ritchie said.   "This is a privately funded transportation system that must be paid for by the users," Ritchie told the Canadian Press in an interview. "You can't expect us to put money in and then bait and switch."   Ritchie said he hopes to have "clarity" from the new minority Liberal government within the next six months in order to begin expansion work by next March.   "We've kept all our options open to be able to go ahead and do it, but we're not going to commit those funds until I know."   Though CPR (TSX:CP) has not finished the engineering and is uncertain of the total costs of expansion, Ritchie said the railroad could increase its traffic by as much as 25 percent by doubling its track in certain areas.   Of particular concern are several hundred kilometres of railway between the B.C. communities of Revelstoke and Salmon Arm, between Calgary and Edmonton, from Brooks, Alta. to Maple Creek, Sask. and Moose Jaw, Sask., to Minneapolis.   "What you've got is selected bottlenecks where there's no place to pass a train so your capacity is limited to the ability to get one train from spot A to spot B. So if it takes an hour, you can only put 24 trains per day in that spot and by putting a siding in the middle you've instantly doubled that capacity."   The Calgary-based railway is currently seeing record freight volumes moving to the West Coast amid voracious demand from the Asian market, particularly China, for everything from coal to fertilizers and grain.   Meanwhile, container traffic from China moving east has become the railroad's largest business segment, overtaking grain bulk shipments.   In late July, CPR posted second quarter profits of $83.7 million, more than doubling the $34.1 million it had in the same quarter of 2003, due to increased freight volume and productivity.   Before committing to doubling track, CPR has undertaken a variety of initiatives to boost its capacity over the past two years. Since 2003, it has leased nearly 3,500 new grain cars, bought 5,500 new double-stack intermodal or container cars and 155 new locomotives that are able to pull heavier loads with less fuel.   Though CPR is in the middle of a three-year plan to prune 820 non-essential jobs, it has also increase its crews by 400 positions this year to handle the increased number of trains.   The notion of "forced access" or making Canada's two largest railroads open up their networks to competition in the hopes of driving down rates that shippers pay is not new.   Over the past several years, there had been rumblings from both federal and provincial governments but amendments to the federal transportation act were not passed before the last election.   The railways will have to wait until the fall to see if Prime Minister Paul Martin will make transportation policy a priority of his new minority government.   "Where it stands now is really up to Ottawa as to whether it will come back and if so in what form," said Canadian National Railway spokesman Jim Feeney.   Feeney said that Montreal-based CN (TSX:CNR), Canada's largest railway, is also opposed to forced access.   "We believe that access should be subject to commercial agreements negotiated by willing parties."