Conrail to the Rescue

Grand plans for reorganizing the ailing railroads of the U.S. Northeast sometimes seem to come along more regularly than the trains that run on them. But the one that emerged from Washington last week could well become a reality. Drafted by the U.S. Railway Association, a federal agency created last January by the Regional Rail Reorganization Act, it would perform costly and radical surgery on the deteriorating rail system that stretches over 17 states in the Northeast and Midwest.

Faster Service. The Railway Association promises that its long-awaited plan would transform what it calls "a transportation disaster unparalleled in the nation's history" into a self-sufficient system within this decade. Under the plan, a private but federally backed company called Consolidated Rail Corp. (Conrail) would carry out the largest corporate reorganization in history: it would take over and consolidate the operations of the bankrupt Penn Central and six other troubled roads. Conrail would lop off about 30% of the combined roads' rail network, unless affected states could come up with 30% of the required subsidies. It would also spend more than $9.3 billion in federal and private funds in a 15-year rehabilitation program. The Railway Association's chairman, Arthur D. Lewis, a former president of Eastern Airlines and one of the organizers of AMTRAK, says that the Conrail system could be paying its own way in less than three years.

The Railway Association also proposed 16 new or improved passenger routes between Northeastern and Midwestern cities. Between New York and Washington, for example, all freight traffic would be removed from the main Penn Central line to track now owned by other companies in order to make way for speedier, more frequent passenger service. New trains would make the 224-mile run in 2 1/2 hr.--30 min. faster than the present Metroliners. The alternative to its plan, says the association, is nationalization of the seven roads that Conrail would run.

Resistance to the Conrail plan, on which Congress will be asked to act this summer, is already building in the states that would be affected. New York's Governor Hugh Carey said last week that the proposal was "utterly unacceptable" because of the routes that would be abandoned. The prospects are for a long, politically charged struggle over Conrail and, while it continues, more infusions of the taxpayers' money into the sick Northeastern railroads. In the same day that the Railway Association presented its proposal, the Senate voted emergency financial aid for the Penn Central and other roads for the third time since 1970. The package: $347 million in grants and loan guarantees.

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