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B-171707 1 (1971-04-02)

handle is hein.gao/gaobabkzw0001 and id is 1 raw text is: 5D COMPTROLLER GENERAL OF THE UNITEP STATES WASHINGTON, D.C. 20548 APR 2- 1971 B-171707 N ~ct to be reifaped outiff the 06eerI D ear.. Secon, , ' II...I.III/l//IllI Il lll/l/I/I/I//Islll/ Dear Senator Gravel: RELEASED LMo555 * In your letter of January 4, 1971, you requested us to consider investigating aroposed rate increase of the Alaska Railroad7 In response to your r-tc--r'a-Vw'havde'--veloped the following information. The authority to fix, change, or modify rates for the transportation of passengers and property by the Alaska Railroad presently is vested by law and executive order in the Secretary of Transportation subject to the requirement that he give due regard to certain actions of the Interstate Commerce Commission. The construction and operation of the Alaska Railroad was authorized by the act of March 12, 1914 (38 Stat. 305), entitled An Act to authorize the President of the United States to locate, construct, and operate railroads in the Territory of Alaska, and for other purposes. By Execu- tive Order No. 11107, April 25, 1963 (28 F.R. 4225), the President dele- gated authority for operation of the railroad to the Secretary of the Interior (subsequently transferred to the Secretary of Transportation). Section 3 of the order, in effect, authorized the Interstate Commerce Commission to act with regard to rates of the Alaska Railroad in the same manner as it acts with regard to the regulation of interstate railroad rates under part I of the Interstate Commerce Act. The Secretary of Transportation granted permission to the Alaska Railroad to petition the Interstate Commerce Commission (Special Permis- sion 71-2500) for a 15-percent rate increase, effective January 14, 1971. Some of the reasons given by the railroad for the requested increase were (1) substantial increases in its cost of operation, including labor costs, (2) increase in the cost of supplies, (3) the fact that its traffic pattern is largely one way, which results in an extraordinarily high percentage of empty car, non-revenue-producing movements, and (4) present projections of a net loss of $642,000 for fiscal year 1971. Because of the many protests to the proposed rate increase, including those received from the State of Alaska, local city governments in Alaska, and numerous private shippers and interested parties, the Interstate Commerce Commission suspended the proposed rate increase until August 14, 1971 (Investigation and Suspension Docket No. 8604). The proposed rate increase is currently under investigation by the Commission. BESI DOCUM,., bM IP,11LAS\LE 50TH ANNIVERSARY 1921-1971 5571

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