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111984 1 (1980-04-01)

handle is hein.gao/gaobadylv0001 and id is 1 raw text is: 





          UNITED STATES GENERAL ACCOUNTING OFFICE
                   WASHINGTON, D.C. 20548

                                     FOR RELEASE OR DELIVERY
                                     EXPECTED TUESDAY MORNING
                                     APRIL 1, 1986

                        STATEMENT OF
             BALTAS E. BIRKLE, DEPUTY DIRECTOR
        COMMUNITY AND ECONOMIC DEVELOPMENT DIVISION

                        BEFORE THE
     HOU~SE SUBOOMMITTLE ON TRANSPORTATION ANLD COMMERCE
     OF THE COMMITTEE ON INTERSTATE AN;D FOREIGN COMtMERCE a 4
                             ON                     1
        CONRAIL'S REDUCED CAPITAL SPENDING PROGRAJ


.N:h. GJAIPAN AND MEMBERS OF THE SUBCOMMITTEE:
                                                             CA'
     VL ARE HERE TODAY TO DISCUSS OUR REVIEW OF CONRAIL'S  C     -

OP:RATIOIN.L AN.D FINANCIAL PROJECTIONS FOR 1960-1984, AND THE

RISKrS INHERENT IN ITS STRATEGY FO- LIMITINC ITS USE OF

FEDERAL FUNDItlM. CONRAIL'S 5-YEAR EUSINESS PLALN DATE

AUG    1, 197- -, CALLE FOR REDUCED-- CAPITAL EXPENDITURES DUR-

I-G 1966 AND 1981, AND CATCH-UP SPENDING IN THE LATER YEARS.

CONRAIL DECIDED ON THIS STRATEGY IN ORDER TO STAY WITHIN THE

CURPEN'T FEDERAL INVESTMENT LIMIT OF $3.3 BILLION DOLLARS.

THE KEY ASSUMPTION IN CONRAIL'S PLAN IS THAT REGULATORY RE-

FORMS WILL MAKE IT POSSIBLE FOR CONRAIL TO EARN SUFFICIENT

REVENUES TO REJUVENATE ITS CAPITAL PROGRAMS IN 1962. IN ITS

AUGUST PLAN,- CONRAIL ASSUMED IT WOULD BE COMPLETELY DEREGU-

ULATED, AND ALLOWED TO FUNCTION AS THOUGH IN A FREE MARKET

SUBJECT ONLY TO LIMITATIONS SPECIFICALLY NEEDED TO PROVIDE

PROTECTION AGAINST MARKET ABUSES.



             111984.
             1 11984

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