The Carter administration endorsed an appeal by Consolidated Rail Corp. yesterday for an additional $1.3 billion of federal aid through 1982 to help the Philadelphia firm become a self-sustaining enterprise.
When the 17,000-mile Conrail system was formed at the direction the federal government in 1976, Congress authorized federal investments of some $2.1 billion in an effort to rebuild a largely bankrupt Northeast rail network.
Earlier this year, Conrail published a revised forecast of its future fortunes and warned that more money would be needed.
Unusually severe winter weather over two years drove expenses higher than expected, freight traffic has not increased as projected in the region and inherited equipment was in worse shape than thought by government planners, Conrail stated.
Although Secretary of Transportation Brock Adams earlier had said congressional action on additional aid for Conrail was not necessary this year, he testified yesterday in support of such a program.
"The continued availability of rail freight service to the Northeast is essential to the nation's economy. I believe that Conrail represents our best chance to restore such service-oriented, self-sustaining, private-sector rail freight service." Adams told a Senate subcommittee.
At the same time, Adams indicated that the additional $1.3 billion of government investment would be all Conrail could expect without a new look at the railroad's structure.
"We must re-evaluate" Conrail's potential to break even in future years if more aid is found necessary, he said. Conrail's rebuilding plan also calls for $1 billion in new private sector financing for equipment and $500 million in labor savings through increased productivity, an uncertain factor.
Sen. Russell Long (D-La.), chairman of the Surface Transportation Subcommittee, said yesterday the federal government should consider employe ownership for Conrail.
The railroad's Chairman Edward G. Jordan told a House hearing earlier this week that Congress may be asked to consider a number of alternatives to additional aid - nationalization, transfer of Conrail lines to other rail firms even liquidation.
Such proposals have been studied before and "found to be wanting both in regard to their high cost and. . .in levels of service to be supplied. I believe this continues to be the case," he said.
In another development, Norfolk & Western Railway said it will reopen a Roanoke car shop on Monday to begin production of 500 coal hoppers for Conrail under a $15 million contract.