HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.
![handle is hein.gao/gaobacjgq0001 and id is 1 raw text is:
DOCUMNT L'SUNZ
05905 - [B1025966]
Conrail*s Profitability: Framework for Analysis. PAD-78-52.
April 10, 1976. 17 pp. + 2 appendices (5 pp.).
Staff study by Hrrry S. Havens, Director, Program Analysis Div.
Issue Area: Program and budget Infornaticu for Congressicnal Use
(3q00).
Contact: Program Analysis Div,
Budget Function: Commerce and transpctticn: Ground
Transportation (404).
Organization Concerned: Department of Tran4portation; Interstate
Commerce Commission; United States Railway Association;
Consolidated Bail Corp.
Conqressional Relevance: House Committee on Interstate and
Foreign -'omaerce; Senate Committee on Commerce, Science, and
Transportation.
Authority: Regional Rail Reorganizaticn Act of 1973. Railroad
Revitalization and Regulatory Reform Act of 1976.
When the Consolidated ltail Corporation (Conrail) tegan
operations in April 1976, finantital projections made by the
United States Railway Associatiorn (USIA) ascu.ed that the $2.026
billion appropriated for Federal loans and purchases of stcck
would be all of the Federal financial assistance that the
railroad would need. USDA's Final System Plan (ESP), prepazed as
a basis for Federal funding decisionc, forecast that the
railroad would become profitable in 1979. Information about
Conrail's current operations were compared with the forecasts
developed when Federal funding decisics were being made;
experience to date was compared with ESP projections of: output
and inflation in the economy as a whole; tonnage carried by
Conrail; total Conrail revenues, expenses, and deficits; and
Conrail friight revenues and expenses per ton.
Findings/Conclusions: The ESP projections depended on two
fundamental assumptions: (1) Conrail would maintain traffic
until 1979 while the infusion of Federal funds permits repair
and renovation of the ph'sical plant; and (;) while repairing
and renovating the physical plant, Conrail would reduce the rate
of increase in unit costs below the rate of increase in the
Consumer Price Index. Actual Conrail. erformance has been
different from that forecast. Losses in 1977 were larger than in
1976 rather than smaller; tons of freight carried by Conrail
were 'elow projections although the national economy has
performed better than expected; and increases in costs per ton
carried have been much more than forecast. Unless changes occur
in current revenues and unit costs, the Conrail system, as
currently designed, will not become profitable. (IRS).](ViewImageLocal?handle=hein.gao/gaobacjgq0001&div=1&collection=&method=preview&ext=.png&size=3)