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')OCUdENT RESUME
05027 - [B0265134]
Conrail's Attempts ToI mprove Its Use of Freight Cars.
CED-78-23; B-164497(5). January 24, 1978. 27 pp. * 2 appendices
(4 pp.).
Report to the Congress; by Elmer E. Staats, Comptroller General.
Issue Area: Transportation Systems and Policies: Railroad
Freight Transportation System (2407).
Contact: Community anaiConomic Development Div.
Budqet Function: Commerce and Traisportation: Grc*;nd
Transportation (40.4).
Orqanization Concerned: tonsolidated Rail Ccrp.; United States
Railway Association.
Congressional Felevance: House Comm4.tttzs on Interstate and
Foreign Commerce; Senate Committee cn Commerce, Science, and
Transportation; Congress.
Authority: Reg.onal Rail Reorganizaticn Ac% of 1973, as amiended
(45 U.S.C. 701).
Conrail (th-onasolidated Rail Corporation) began
oper.ating important sections of six railroads in the Northeast
in April 1976 under a&rearganization plan known as the Final
System Plan. This plan was developed by the United States
Railway Association and, approved by the Congress in November
1975. It provided fo Government investment in Conrail of up to
$2. 1 billion through the eud of 1979 by the purchase of stock
and debentures. The plan included financial projections through
1985 that Conrail would begin to make a profit by 1979 and would
remain profitable through 1985. The plan shows that, to make a
profit by 1979 and remain profitable thereafter, Conrail would
need to qreatly improve its rate of use of freight cars cver its
predecesscrs' 1973 rati. A projected 28% iuproveient would save
Conrail $1 billion in capital expendituzes through 1965 because
26,000 new treight cars would not te needed.
Findinqs/Conclusionz: Althcugh Conrail's use rate for the first
7 months of 1977 was.about 137 less than the 1973 rate, the
Final System Plan did r:;, anticipate significant improvemen- in
car use during Conrail's first 3 years of operations. The plan
estimated that a major pa'-t of the improvement woLud come in
1979 when a new operating control systi was to b,! installed and
operating. The control system will not be fully ol.erational
before at least 19o2 or 1983, thus delaying the benefits
anticipated in tae plan. Conrail is meeting most of the other
recommended improvements cilled for iD the plan. It appears that
certain improvements, such as rehabilitating the freight car
fleet, may cost more than estimated. Track rehabilitation during
1976 slightly exceeded the goals of the plan. Whether the
improvements Conrail is making will be sufficient to provide for
a 28% improvemer.t in freight car utilization ty 1981 cannot be
determined with certainty at this stage. Ccnrail has stated that
it will need additional funding to become self-sustaining and](ViewImageLocal?handle=hein.gao/gaobaawpy0001&div=1&collection=&method=preview&ext=.png&size=3)