The Interstate Commerce Commission staff says that Conrail, the federally supported consortium of Northeast railroads, will need nearly twice the $1.3 billion it has requested in order to meet costs over the next five years of operation.
In an "Early Warning Report" issued yesterday, the ICC's Bureau of Accounts says Conrail's stated financial needs through 1982 "are understated by at least $1.1 billion."
The report based its conclusion "on the fact that Conrail's revenue projections in its latest five-year business plan are optimistic." The report said the ICC staff's major area of concern is freight revenue forecasts.
"We believe that a revenue shortfall of approximately 8 percent could occur over this period," the staff wrote. The report states that Conrail will have to improve in key operational and productivity areas if it hopes to keep its financing needs from growing even larger.
The ICC report does acknowledge recent changes and improvements in Conrail management, however.
"Conrail has implemented an innovative and unique approach to railroad marketing," the report states. And the study praises the railroad's maintenance-of-way program - improvements of trackage - as "its best operational performance to date." But the report points out that the program has been abnormally costly by major railroad standards.
The report states that "major problems in yard and train operations continue to plague Conrail." It also cites problems with safety, repairs, equipment utilization, growing administrative expenses, productivity and efficiency.
"The outlook for Conrail's 1978 net income remains bleak," the ICC staff said.
"The quality of Conrail's service as of March 1978 deteriorated further from 1977 levels," the report adds. "Small shippers continued to complain about excessive delays . . . a situation that could worsen due to the current national shortage in certain types" of freight cars.