The Canadian Wheat Board will use government-backed financing to extend the life of its fleet of hopper-bottom grain cars to 2030.
The CWB said Friday that the planned upgrades to 3,411 cars will extend the fleet’s service time by 16 years.
“Leasing hopper cars to the railways generates revenue for farmers,” CWB CEO Ian White said in a release Friday. “The upgrades we’re announcing today will pay for themselves over the extended life of all 3,411 cars, as well as generating additional revenue.”
Upgrades to the cars’ brakes and other equipment are “vital” to ensure the fleet can meet new standards the Association of American Railroads (AAR) plans to bring into effect on Jan. 1, 2014.
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The upgrades will also increase load capacity for wheat by about seven per cent, the CWB said.
Cars under lease to Canadian National Railway (CN) are being upgraded at CN’s Transcona railyards on the east side of Winnipeg, where maintenance workers are expected to complete the work at a rate of about 60 cars a week.
The CWB said it will finance the work by issuing bonds authorized by the federal government.
When the upgrades are complete, the CWB will then lease the hopper cars to the railways. Lease fees should result in “net benefits” of about $34 million for Prairie farmers, the CWB said.
