Conrail's Reduced Capital Program Could Jeopardize the Northeast Rail Freight System

At the end of calendar year 1979, only $645 million remained of the $3.3 billion total Federal commitment to the Consolidated Rail Corporation (Conrail). In its August 1979 business plan, Conrail proposed reducing its capital spending in 1980 and 1981 from its earlier business plan levels by about $379 million to stay within the currently authorized $3.3 billion. Conrail stated that this reduction was necessary because the Congress had not appropriated any additional funds. In August 1979, Conrail believed that deregulation and estimated traffic levels would provide sufficient funds to rejuvenate the capital program in 1982, but this projection was based on uncertain assumptions concerning regulatory reform.