Transportation Secretary Elizabeth Hanford Dole, attempting to breathe life into her plan to sell federally owned Conrail, yesterday called on Norfolk Southern Corp. to raise its offer from $1.2 billion to $1.9 billion and proposed giving the Interstate Commerce Commission authority to review the merger.

Norfolk Southern declined to comment, although Dole said in an interview that Norfolk Southern Chairman Robert B. Claytor "has indicated that he and the financial advisers and the board will consider this proposal."

Although the purchase price for the government's 85 percent holding in Conrail would increase by $700 million, Norfolk Southern would be required to come up with only $200 million in additional cash at the time of sale.

The rest of the new price includes $360 million in Conrail's overfunded pension plan -- which Dole expects Norfolk Southern to forego -- and $136 million in excess cash in the Conrail till.

Dole outlined her new plan in a letter yesterday to Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee who last week moved to block the sale to Norfolk Southern, saying "a new plan must be devised."

Shortly before Dole released her letter, Dingell's office made public a May 1 letter of his to Dole in which he said: "I have spent more than one year weighing the conflicting claims and available evidence on this fundamental issue. Based on this review, I cannot support a sale of Conrail to Norfolk Southern."

Dingell cited "massive anticompetitive impacts and employment losses" if the merger is approved. Norfolk Southern and Conrail share track and markets in the Midwest, and some of the overlapping facilities would have to be sold to other railroads under the proposal.

Despite the tone of Dingell's letter, Dole insisted that the sale is not dead. "I wouldn't be doing this if I were not hopeful we could move forward now," she said. "This is an answer to [Dingell's] questions" about the sale. The Senate already has approved the sale.

In her letter to Dingell, Dole also proposed giving the Interstate Commerce Commission six months to review the transaction's impact on competition, thus taking the Justice Department's antitrust division out of play. The Transportation Department's top officials have been increasingly peeved at Justice's slow response to antitrust questions.

Existing Conrail sales legislation prohibits ICC review, although it is the agency that normally decides antitrust questions in railroad mergers, while the Justice Department plays only an advisory role.

Dingell reiterated his support for a public offering of Conrail's stock.