THE CAPITAL INVESTMENT PROGRAM

We made rapid progress implementing our five-year capital investment program in 2001. Approved in 2000 with $401.9 million in funding from the federal government, the capital investment will help VIA respond to the growing demand for a more modern, efficient, coast-tocoast passenger rail service. It is providing new equipment, better tracks and infrastructure, better station facilities, improved safety and environmental practices – all as part of a truly modern network of services linking communities across the country.

BETTER TRAINS, AND MORE OF THEM
We purchased 139 new state-of-the-art passenger cars in December 2000, which will expand our total fleet by one third. The cars were delivered for assembly and modifications throughout 2001, and the first of the new equipment – now called the Renaissance cars – was unveiled last November. The equipment will be phased into service over the next two years.

We also received 21 new high-speed Genesis locomotives from GE. The new locomotives and passenger cars will allow us to:

• Add new departures, with faster trip times and modern equipment, significantly increasing choices for consumers in the Quebec City-Windsor Corridor;
• Expand overnight sleeper services in the Corridor with modern, well-appointed equipment suitable for today’s business traveller;
• Introduce new options for travellers on the eastern Canadian overnight services between Montreal and Halifax /Gaspé;
• Free up equipment to respond to increased demand on the Western transcontinental service.

Services in regional and remote areas of the country will also benefit, as we complete the refurbishment of five self-propelled Rail Diesel Cars. The work, which began in June, includes a complete overhaul of all mechanical systems and car trucks, which will result in a dramatic increase in reliability and on-time performance. In addition, car interiors, such as carpets, upholstery and seats are being completely refurbished to provide improved comfort and service to customers. The first of the five cars was completed in November. The remaining cars will be completed in 2002.

	Interiors of the Renaissance fleet.
Chantal Morrissette, Senior Service Attendant, Western Services	The new Genesis P42 locomotive, in service since November 2001.

MODERNIZING OUR STATIONS
Our program to upgrade and modernize passenger station facilities proceeded rapidly throughout 2001. In addition to implementing a new signage and corporate identity program coast to coast, we launched major station investment projects, including:

• A new station in London, Ontario. The old station was torn down in February, and a new, modern facility was opened in October.
• Major station renovations–including new roofs, expanded waiting rooms, better lighting, and improved ticketing and baggage handling facilities – were started in Oshawa, Oakville, Kingston, Kitchener, Brantford, Brockville, Quebec City, Moncton and Halifax.
• A four-year redevelopment of our busiest passenger facility, Toronto’s Union Station.

Our station improvements program is ongoing, and will benefit all of our stations across Canada in the years ahead. For example, in the near future we plan to improve interior amenities at stations in Windsor, Chatham, Sarnia, Woodstock, Brampton, Guelph, St. Catharines and Cobourg.

VIA’s station in Quebec City, historic Gare du Palais.	The new VIA station in London, Ontario.
	Pauline Mazerolle, Senior Service Attendant, Eastern Services

RENEWING THE INFRASTRUCTURE
A modern rail infrastructure – the tracks, switches, signals, control systems and bridges needed to operate our trains – is critical to the safe operation of passenger rail, and to the introduction of new and faster train services.

Infrastructure improvements progressed rapidly on the track between Montreal and Ottawa. Known as the Alexandria Subdivision, this is one of the few sections of track actually owned by VIA, so we have been able to move quickly. The majority of the track improvements were completed in 2001. The welding of the jointed rail also started, and will be completed by mid July.

Work on improved signalling systems is also progressing on schedule, and will be completed mid-September 2002. All work on the Alexandria Subdivision will be ready for the introduction of our fall train schedule, and will allow us to provide a much faster service between Ottawa and Montreal.

Substantial improvements are also needed for other routes in the Quebec City –Windsor Corridor, which will involve working closely with the track owner, Canadian National. We are currently negotiating an agreement with Canadian National to specify the details of what work will be done, and when it will be completed.

The busy Corridor route is in increasing demand.	Infrastructure is key to more frequent and faster service.
	Bob McDaniels, Service Manager, Western Services

CAPITAL INVESTMENT IN THE FUTURE
The current capital investment plan will generate tangible benefits for Canadian travellers, both in the immediate future and in the years ahead. In 2002, new and improved stations will be opening. Our new locomotives and Renaissance cars will come into service. There will be new express trains between Toronto, Montreal and Ottawa, with faster schedules.

In the longer-term, the current investment program is designed to stabilize passenger rail service, and ensure that we can generate sufficient operating savings to reinvest in the ongoing capital projects needed to maintain service roughly at current levels. It will not, however, generate the funding we need to offer substantially higher levels of service beyond the five-year program.

We know that Canadians want higher levels of service – even faster schedules, and more frequent trains. Incremental improvements to this end are possible, provided that we can find new ways to generate the capital needed. This may require, for example, new legislation which would give VIA Rail options for financing capital improvement projects which are not available today.

Pierre Nolet, Locomotive Engineer boards the new VIA locomotive	Vern Zelenewich, Senior Service Attendant, Western Services