The House Commerce Committee approved legislation yesterday paving the way for the eventual transfer of Conrail, the federally subsidized freight railroad, to the private sector, although not as quickly as the Reagan administration would like.
Also yesterday, the Senate Commerce Committee authorized $735 million for Amtrak operating expenses in fiscal 1982, giving the national rail passenger network $122 million more than the $613 million it had authorized previously. The action, which Amtrak said would allow it to keep about 85 percent of its current system intact, was part of the budget reconciliation process. Under that process, each committee is required to make legislative changes in programs within its jurisdiction to achieve budget savings.
The bill approved yesterday by the House Commerce Committee by a vote of 30 to 12 would allow the government to divest itself to Conrail down the line but not as soon as the administration would like. The bill basically would keep Conrail intact as an entity through 1983.
The compromise measure, offered by New York Republicans Reps. Norman F. Lent and Gary A. Lee, and supported by transportation subcommittee Chairman James J. Florio (D-N.J.), gives Conrail until Dec. 31, 1983, the Department of Transportation would be authorized to sell only its Conrail common stock and only after a determination is made by the United States Rail Association that Conrail has become profitable.
Even if the common stock were sold, Conrail would remain a single entity with the same lines, contracts, and so on, a committee source explained. It would just have different owners. Through 1983, the government would not be able to sell Conrail's assets to one or more railroads.
If Conrail has not become profitable, the DOT can proceed in 1984 to sell it either as a single company or in pieces to multiple buyers -- what Transportation Secrtary Drew Lewis would like to do earlier.
Between now and 1984, however, Conrail will have an opportunity to make improvements that will make the railroad more attractive to potential buyers through a variety of incentives and improvements in its operations that the bill provides, its sponsors said. These include divesting its commuter operations, reforming its costly labor protection expenses an increasing productivity, partly from the authorized buy-out of some of its employes and the elimination of their positions.
The bill also provides $375 million in new funding for Conrail operations until the government's involvement is ended.
"There is universal agreement on one policy objective -- the return of freight service in the Conrail region to the private sector," Florio said yesterday during the mark-up session. "If that cannot be accomplished by the present management and structure, then the railroad must be sold.
"But the legislation ensures that changes are made so that Conrail has the opportunity to become self-sufficient," he said.
Although getting government out of its ownership position in Conrail is the ultimate goal of both, the House bill differs significantly from an agreement reached by the administration and Key Senate members on Conrail's future. Their agreement would allow the government to sell the 17,000-mile, 17-state freight system after June 1, 1982, as single entity. If Conrail is not sold in the following six months but has become profitable, the government must continue to sell it in one piece until Aug. 1, 1983. After that, the government could dispose of its assets as a single entity or in a package of different lines to different buyers. If Conrail has not become profitable by Dec. 1, 1982, the government can proceed at that time with the sale of Conrail in a package.