An economic planning approach to Western Canada railway capacity expansion in the 1980s

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Paci, Thomas P.
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This thesis revolves around the planning problems and issues related to railway system capacity expansion in Western Canada during the 1980s. Since the late 1970s, Canada's two national railways--CN Rail and CP Rail, have implemented long range investment plans to increase the productive capacity of their respective rail networks in the West. The overall objective of this study is to provide a detailed overview showing why these efforts developed, how they proceeded, what their impacts were, and what the rationale behind them was. To develop the background necessary to utilize this approach, the thesis conducts a review of the theoretical literature dealing with the economics of railway capacity planning. This review identifies the key factors, elements, and structure related to the railway capacity planning process. The economic and physical interrelationships existing between the factors that impact upon capacity are also discussed at length. From the theoretical discussion, this study develops an economic approach to outline some important aspects regarding the Western capacity expansion programs of both railways. This study looks at the state of the Western railway network during the 1970s, and identifies a number of relevant issues that impacted upon railway planning. The planning elements of both railways are examined in detail to determine their impact upon network capacity and the economics of the carrier. The study then assesses the rationale of these plans from an economic planning approach. This study found that the railways were reluctant to make long range investment plans to expand capacity when uncertainty existed as to the plans' future economic viability. The existence of the statutory Crow rates for grain, because of their adverse effects upon the economic viability of the railways, impeded the long range planning efforts of CN and CP for many years. The thesis found that when both CN and CP did lay out their Western capacity expansion programs, it was done in a series of logical steps. The first options to be executed were those that cost the least and could be implemented in the short-run. The last options to be taken were extremely costly and only took effect over the long-run...