06/28/2013 06:02 EDT | Updated 08/28/2013 05:12 EDT

Calgary Flooding: CP Rail Says Safety's Top Priority Despite Layoffs, Derailments

Canadian Pacific Railway says this week's bridge incident in Calgary and recent derailments shouldn't raise public concerns about its ability to safely move dangerous goods, including crude oil.

The railway says despite recent layoffs the number of bridge and track inspectors hasn't been reduced.

Calgary's mayor and union leaders have questioned whether CEO Hunter Harrison's announced job cuts have undermined safety. The company has cut its workforce by 15 per cent to 14,920 as of the first quarter.

"Operating safely has been and always will be a No. 1 priority at CP and that focus is not going to change," said spokesman Ed Greenberg.

A bridge over the swollen Bow River in Calgary buckled Thursday when a Canadian Pacific freight train was passing over it, leaving several tanker cars carrying material to dilute raw oilsands bitumen teetering.

A preliminary investigation has determined one of the four piers that support the bridge sagged after the Bow River swelled and flooded.

CP (TSX:CP) inspected the bridge 18 times after flooding began. The last bridge inspection was Saturday and the tracks were checked on Monday, but the strong current prevented it from checking below the water's surface.

Canadian Pacific has also faced several derailments over the past few months.

In May, a freight train jumped the tracks near Jansen, Sask., spilling 91,000 litres of oil. About 114,000 litres of oil spilled in March near Parkers Prairie, Minn., when 14 cars derailed.

A derailment of 22 cars west of White River, Ont., caused the spill of 110,000 litres of light crude oil and 22,500 litres of canola oil. A broken train wheel and broken track were recovered from the scene. Later in April, 17 cars carrying potash derailed near Provost, Alta.

"Each of the past incidents are unique and unrelated," Greenberg said in an interview. "Over the years, our railway has invested billions of dollars into our North American rail infrastructure network and our commitment to safety remains a focus as we respond to the demands of the global economy."

However, CP's focus on boosting productivity through layoffs is undermining the railroad's historical leadership on safety compared to its Montreal-based rival, said Rob Smith, national legislative director of Teamsters Canada Rail Conference.

"CP used to be the flagship for rail safety. It seems like that ship is sinking of late," he said in an interview.

Smith said a similar problem surfaced at CN when Harrison as its chief executive cut positions on his drive to make it one of the most efficient railways in North America.

"If you take a look at what happened at CN when he took over there it's the same nightmare all over again."

CP Rail and its rival Canadian National Railway (TSX:CNR) have been increasing crude shipments as Canadian oil producers look for ways to get their product to market as production ramps up from the oilsands and pipeline companies struggle to increase capacity quickly.

The country's second-largest railroad expects to double its shipments of crude oil 12 months earlier than previously forecast. It has also promised to reduce the time to ship products from one coat to another.

Bill Brehl, president of the Teamsters Canada Rail Conference, Maintenance of Way Employees Division, said other CP departments have faced layoffs but the 3,600 employees who are upgrading tracks haven't been affected.

"CP's track has been neglected for the last quarter century to a great degree — for sure the last six or seven years — and it seems to be a concerted effort to rebuild that and not to neglect it."

Brehl said he would be concerned about the railway's desire to use longer and heavier trains on secondary mainlines if the upgrades aren't done.

Despite the recent high-profile incidents, Brehl said the total number of derailments and mishaps doesn't appear to have changed from prior years.

"We're hoping to see a reduction in instances as the infrastructure improves."

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