The Consolidated Rail Corp. (Conrail) is still in bad shape, and considerable behind its own timetable for improvement, according to the second annual report to Congress by the United States Railway Association - the government corporation created to keep track of the federal investment in the railway.

The report, for release today, notes that the railroad's overall operating and financial performance is falling behind original goals, and adds that there are "serious problems" of service quality, locomotive shortages and reliability, car utilization and productivity.

According to the USRA report, Conrail will likely need more than the original $1.283 billion in additional government funding it has projected.

The latest analysis says the railroad could need anywhere up to $3.8 billion for the five year period, which started in 1977. Congress appropriated just over $2 billion for Conrail in 1973, and the USRA has invested about $1.5 billion to date.

The coming year will be a crucial one for Conrail," says the report. "This report details problems of service deterioration, locomotive reliability, car utilization, capital investment and labor productivity which must be resolved or else the goal of self-suffciency cannot be achieved.

The report also states that if Conrail "has not demonstrated that these problems are being solved by its third anniversary on April 1, 1979, then the Association will be prepared to present alternatives for Congressional consideration."

Those alternatives could include reductions in Conrail's plant size and configuration, market structure and equipment utilization, the report stated.

The report did praise Conrail's track rehabilitation program, which was larger than any similar program at other railroads. Conrail laid 1,017 miles of rail in 1977, surfaced 6,400 miles of track, replaced more than 4.4 million crossties and upgraded some 480 miles of track on the system's heavy-tonnage lines.

But the report also said the Conrail's "degradation" of service was tying up the entire nation's rail system. "At one time," the report states, "about one-third of the nation's 50 foot boxcars were on Conrail lines, more than twice the number it own."

The report also hit Conrail hard for performance and reliability of locomotives. On the average day, the report stated, 51 trains ready for movement would be held up for lack of power, "often for several days."