Examination of United States Railway Association's Financial Statements, Fiscal Year 1979
CED-80-107: Published: Jul 31, 1980. Publicly Released: Jul 31, 1980.
- Full Report:
A review was made of the U.S. Railway Association's (USRA) financial statements for the fiscal year ended September 30, 1979. USRA monitors and provides financing for the Consolidated Rail Corporation (Conrail), which operates railroads in the Midwest and Northeast.The USRA role includes: (1) controlling the flow of Government investment and loan funds to Conrail; (2) monitoring Conrail's performance; (3) participating in litigation regarding the allocation of Conrail securities and compensation to the bankrupt railroads whose assets were taken to form Conrail; and (4) investigating alternatives to and for Conrail.
Conrail has not become a profitable, self-sustaining operation. Both USRA and Conrail believe that Conrail is not likely to succeed without major Government-approved changes to its operating environment or substantial additional Government investment beyond the $3.3 billion Congress has already authorized. Conrail's prospects for continuing operations indefinitely are uncertain and, consequently, so is Conrail's ability to repay the USRA investment in its securities. The book value of the USRA Conrail securities exceeds $2.7 billion and constitutes more than 80 percent of USRA assets. More than 95 percent of the USRA income comes from Conrail stock issued to pay interest on the USRA Conrail debentures.