Exhibit 10.8
                                                             ------------

                   CONSOLIDATED RAIL CORPORATION

        ANNUAL PERFORMANCE ACHIEVEMENT REWARD PLAN FOR 1996

                           FOR OFFICERS




1.   Definitions
     -----------

     When  used  in this document, the following terms  shall
     have the meanings set forth below:


          Board means the Board of Directors of Conrail.
          -----

          Conrail means the Consolidated Rail Corporation.
          -------

          The Company means Conrail Inc.
          -----------

          Operating Ratio means the percentage determined by di-
          ---------------
     viding (a) operating expenses by (b) revenues, as shown on
     Conrail's consolidated financial statements.


           Cost of Risk Ratio means the percentage determined  by
           ------------------
     dividing (a) the sum of the cost of risk elements (as
     designated by the Risk Management Department) by (b) Conrail's
     railroad operating revenues.


           Participant means an officer of Conrail who participates
           -----------
     in the Plan in accordance with Section 3.


           Phantom Shares means shares credited to a Participant's
           ---------------
     account each of which shall be deemed equivalent to the
     promise to convert one phantom share to one share of Conrail
     Inc. common stock.


           Plan  means  the  Consolidated Rail  Corporation  Annual
           ----
     Performance Achievement Reward Plan for 1996, as set forth  in
     this document and as may be amended from time to time.

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           Salary means the salary earned by a Participant in  1996
           ------
     from employment  with Conrail.  For purposes  of  this  Plan,
     Salary  shall  include salary earned pursuant to any  holiday,
     vacation,  or  sick leave policy of Conrail,  salary  deferred
     pursuant to the Consolidated Rail Corporation Matched  Savings
     Plan, and salary contributed pursuant to the Consolidated Rail
     Corporation  Flexible  Benefits  Plan.   Except  as  otherwise
     provided  in the preceding sentence, Salary shall not  include
     any  amount payable pursuant to receipt of a Spot Award  or  a
     1995  Selective Cash Award paid in 1996 or to an employee bene
     fit or incentive compensation plan.


2.   Introduction
     ------------
           The Board has approved the implementation of this Plan.
     The Board expects that the Plan will provide an incentive for
     enhanced individual and corporate performance and aid  Conrail
     in attracting and retaining capable employees.


3.   Eligibility
     -----------
           Each  officer of Conrail, who is employed  during  1996,
     shall participate in the Plan.


4.   Prerequisite for Award
     ----------------------
          Anything in this Plan to the contrary notwithstanding, no
     award  shall  be  payable under the Plan in the  event  actual
     operating  income for 1996, as shown on Conrail's consolidated
     financial statements, is less than $690 million.


5.   Amount of Award
     ---------------
           (a)   Under  the Plan, a Participant may earn  an  award
     equal  to  a  percentage (or percentages) of  his/her  Salary.
     This  award  may consist of two parts, the Annual  Performance
     Achievement   Reward  ("APAR")  and  the  Annual   Performance
     Achievement Reward Plus ("APAR Plus").  The APAR percentage(s)
     shall  depend upon the position held by the Participant and/or
     the  performance  of Conrail, measured by the relationship  of
     (i)  the Operating Ratio for 1996, to (ii) the Operating Ratio
     goal  set by the Board (or its delegate) for purposes  of  the
     Plan and the relationship of (iii) the Cost of Risk Ratio  for
     1996 to (iv) the Cost of Risk Ratio goal set by the Board  (or
     its  delegate) for purposes of the Plan, both as certified  by
     Conrail's  chief financial officer, after taking into  account
     any  amounts payable pursuant to the Plan that are  not  taken
     into account in the Operating Ratio goal set by the Board  (or
     its  delegate)  for  purposes of the Plan.  The  percentage(s)
     shall be determined in accordance with one of three schedules.
            The   APAR  Plus  percentage  shall  depend  upon   the
     performance of Conrail, as measured by the relationship of (i)
     the  Operating Ratio for 1996 to (ii) the Operating Ratio goal
     set by the Board (or its delegate) for purposes of the Plan.
           Conrail shall furnish each Participant with a copy of the
     schedule(s) of awards applicable to him/her.

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           (b)   A  Participant's  award  shall  be  pro-rated,  as
     provided in Section 8, in the event he/she participates in the
     Plan  for  less than all of 1996 or moves into a position  cov
     ered  under a different schedule of awards.  The Participant's
     award  shall  equal the sum of the partial awards computed  by
     multiplying  (i)  the Salary earned by the  Participant  while
     covered  under a schedule of awards by (ii) the percentage  of
     Salary determined in accordance with such schedule.
           (c)   Anything  to the contrary in this  Section  5  not
     withstanding, a Participant's award may be reduced by up to 50
     percent by Conrail's President and Chief Executive Officer (or
     his   delegate(s))  on  the  basis  of  individual  or   group
     performance.


6.   Election to Defer Awards
     ------------------------
            (a)   Each  Participant  shall  be  entitled  to  elect
     irrevocably  to defer, for a period of one, two, three,  four,
     or  five years, all or a portion of any APAR award payable  to
     him/her pursuant to this Plan.  The minimum deferral permitted
     is  10  percent  and a deferral may be made in any  percentage
     above  this minimum.  The opportunity to defer any APAR  award
     is  available  only to Participants who reside in  the  United
     States and are subject to U.S. federal income tax withholding.
     A  Participant who elects to defer his/her APAR award shall be
     credited with Phantom Shares in an account maintained for each
     Participant.  Such elections must be made no later  than  July
     27,  1996,  on  forms  provided by  Conrail's  Assistant  Vice
     President-Compensation and Benefits for this purpose.
           (b)  A Participant who elects to defer an APAR award  in
     Phantom  Shares  shall be credited with such shares  equal  in
     value  to  the amount of his/her deferred award (the "Deferred
     Shares"), plus additional Phantom Shares equal in value to  10
     percent  (10%) of his/her deferred award times the  period  of
     deferral selected, up to a maximum of fifty percent (50%) (the
     "Bonus  Shares").   The number of Phantom  Shares  so  awarded
     shall  be  determined as of the date the non-deferred portions
     of awards are or would have been paid.
           (c)   The  dividend equivalents paid  on  such  Deferred
     Shares  and  Bonus Shares shall be re-invested  as  additional
     Phantom Shares for the Participant or paid in cash based  upon
     the Participant's election included in the election form noted
     in  Section 6.(a) above.  The Deferred and Bonus Shares  of  a
     Participant shall not be entitled to voting rights.
           (d)  The APAR Plus award shall not be eligible for defer
     ral.

7.   Time and Form of Payments
     -------------------------
           (a)   In  the  case of a Participant  who  has  made  an
     election  to  defer, the Deferred Shares and the Participant's
     Bonus  Shares shall be paid in the form of Conrail Inc. common
     stock,  recorded  in electronic book entry  at  First  Chicago
     Trust  Company of New York, the Company's transfer  agent,  as
     soon  as  practicable after expiration of the deferral  period
     chosen  by  the  Participant.  Such stock may be  issued  from
     Conrail  Inc.'s Stock Employee Compensation Trust or from  the
     Company's authorized but unissued shares.  Any portion  of  an
     APAR  award  not deferred by a Participant shall  be  paid  to
     him/her in cash during the first quarter of 1997.

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           (b)   In  the  case of a Participant  who  has  made  no
     election  to defer, the Participant's award shall be  paid  to
     him/her  in  cash  in a single installment  during  the  first
     quarter of 1997.


8.   Special Payment Rules
     ---------------------
           Anything in this Plan to the contrary notwithstanding, a
     Participant who is dismissed for cause prior to receipt of any
     portion  of  his/her award shall forfeit such portion  of  the
     award.   A  Participant who resigns from Conrail  during  1996
     shall receive a prorated portion of his/her APAR and APAR Plus
     awards.   The amount of the prorated award shall be determined
     by  applying a fraction to the Participant's Salary determined
     up  until his/her date of termination.  The numerator of  this
     fraction  is  the  number  of  days  of  the  year  until  the
     termination occurred and the denominator is 366, the number of
     days  in  the  year.  A Participant who resigns  from  Conrail
     after  December  31, 1996, but before the date  in  the  first
     quarter  of  1997 on which payments are made under  the  Plan,
     shall  receive  a  full  APAR and APAR  Plus  award.   If  the
     Participant has elected to defer his/her award, such  election
     is void and the prorated or full award will be paid in cash in
     the first quarter of 1997.


           A  Participant who defers his/her award and resigns from
     Conrail during the deferral period shall receive a payment  of
     his/her  APAR award in cash.  Such payment shall be  equal  to
     the lesser of the amount of his/her deferred award made in the
     first  quarter of 1997 or the number of phantom  shares  times
     the fair market value of Conrail Inc. common stock on the date
     of  his/her  termination.  Any shares accumulated through  the
     election to reinvest dividend equivalents will be paid in cash
     at  the fair market value of Conrail Inc. common stock on  the
     date  of  his/her termination.  Such Participant shall forfeit
     all Bonus Shares.


           If  a  Participant who has elected to  defer  all  or  a
     portion  of  his/her APAR award in the form  of  Deferred  and
     Bonus  Shares  retires with the right to an immediate  pension
     under the Supplemental Pension Plan of Consolidated Rail Corpo
     ration  (the "Pension Plan") prior to receipt of the  deferred
     award,  the  Participant shall receive shares of Conrail  Inc.
     common  stock  representing  the Participant's  deferred  APAR
     award recorded in electronic book entry at First Chicago Trust
     Company  of New York.  The matching or Bonus Shares  shall  be
     prorated on the basis of a fraction, the denominator of  which
     shall be the number of days from the date of the award through
     the end of the elected deferral period and the numerator shall
     be  the number of days from the date of the award through  the
     last  day  of  employment.   This proration  factor  shall  be
     multiplied  by  the number of Bonus Shares and  the  resulting
     number   of   Bonus  Shares  shall  be  distributed   to   the
     Participant.   The  balance  of  the  Bonus  Shares  shall  be
     forfeited on the last day of the Participant's employment.


           If  during  1996, a Participant is force reduced,  moves
     from  a non-agreement position to an agreement position,  goes
     on  a  leave  of  absence,  becomes  disabled  or  dies,  such


                               - 4 -
<PAGE>

     Participant's award shall be prorated and paid  in  the  first
     quarter  of  1997 on the basis of a fraction  applied  to  the
     Participant's Salary, the numerator of which is the number  of
     days  of the year until the event occurred and the denominator
     of  which is 366, the number of days in the year.  The  amount
     of the award shall be paid in cash.


           A  Participant who is force reduced, moves from  a  non-
     agreement position to an agreement position or goes on a leave
     of  absence  after the end of 1996, but before payments  under
     the  Plan  are  made shall receive a full APAR and  APAR  Plus
     award.   If  the Participant has elected to defer his  or  her
     APAR award, the election is void and the APAR award is payable
     in cash.  A Participant who becomes disabled or dies after the
     end of 1996, but before payments under the Plan are made shall
     receive  a  full APAR and APAR Plus award.  If the Participant
     has  elected to defer his/her APAR award, such award  will  be
     paid  in  cash  when the award is made to the  Participant  or
     his/her beneficiary(ies) or estate.


           If, after the APAR award is made in the first quarter of
     1997,  a  Participant  is force reduced, becomes  disabled  or
     dies,  his/her Deferred and Bonus Shares shall be  distributed
     in full to him/her or to his/her beneficiary(ies) or estate in
     the  form  of Conrail Inc. common stock recorded in electronic
     book  entry  at First Chicago Trust Company of New  York.   If
     after  the APAR award is made in the first quarter of  1997  a
     Participant  goes  on a leave of absence or  to  an  agreement
     position, his/her Deferred and Bonus shares shall be  retained
     in his/her account and distributed in the form of Conrail Inc.
     common  stock  recorded  in electronic  book  entry  at  First
     Chicago  Trust Company of New York at the end of the  deferral
     period   selected  by  the  Participant;   unless  he/she   is
     dismissed  for  cause,  in which case  such  shares  shall  be
     forfeited.


9.   Acceleration of Awards Upon a Change of Control
     -----------------------------------------------
            Notwithstanding  any  provision  of  the  Plan  to  the
     contrary,  upon  the  occurrence of a Change  of  Control,  as
     defined  below,  all  terms  and conditions  with  respect  to
     Phantom Stock then outstanding shall be deemed satisfied as of
     the  date of the Change of Control for all purposes hereunder,
     and  Conrail  Inc. common stock issued in settlement  of  such
     Phantom  Stock  shall be payable to Participants  as  soon  as
     practicable following such change of control.


           A  Change of Control hereunder shall be deemed  to  have
     occurred on the earliest of the following dates: (i) the  date
     any  entity,  person or group (within the meaning  of  Section
     13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of
     1934,  as  amended)  other than the  Company  or  any  of  its
     Subsidiaries  or any employee benefit plan (or related  trust)
     sponsored  or  maintained  by  the  Company  or  any  of   its

                               - 5 -
<PAGE>


     Subsidiaries, shall have become the beneficial  owner  of,  or
     shall   have   obtained  voting  control   over,   outstanding
     securities issued by the Company entitled to cast 20% or  more
     of  the  votes which all outstanding securities issued by  the
     Company  are  entitled to cast in an election of directors  of
     the Company; (ii) the date the shareholders of the Company and
     the  shareholders  of the other constituent corporations  have
     approved  a  definitive agreement to merge or consolidate  the
     Company with or into another corporation other than in  either
     case,  a  merger  or  consolidation of the  Company  in  which
     holders  of shares of common stock of Conrail Inc. immediately
     prior to the merger or consolidation have at least 80% of  the
     ownership   of  common  stock  of  the  surviving  corporation
     immediately  after the merger or consolidation,  which  common
     stock  is  then  held in the same proportion as such  holders'
     ownership  of Common Stock of Conrail Inc. immediately  before
     the  merger  or consolidation; (iii) the date the shareholders
     of  the  Company  approve a definitive agreement  to  sell  or
     otherwise  dispose  of substantially all  the  assets  of  the
     Company;  or (iv) the date there shall have been a  change  in
     the composition of the Company's Board such that a majority of
     the  Company's Board shall have been members thereof for  less
     than twelve (12) months, unless the nomination for election of
     each  new director who was not a director at the beginning  of
     such  twelve (12) month period was approved by a  vote  of  at
     least  two-thirds of the directors then still  in  office  who
     were directors at the beginning of such period.


           To  the extent a Participant hereunder is a party to  an
     agreement with the Company as authorized by its Board on  June
     21,  1995, awards hereunder shall be subject to the  terms  of
     such  agreement,  in addition to the foregoing  provisions  of
     this  Section 9.  In resolving any conflict between the  terms
     of  such  agreement and the terms of the Plan, the  provisions
     which are most favorable to the Participant shall prevail.


10.  Withholding for Taxes
     ---------------------
           Payments  pursuant  to this Plan  shall  be  reduced  by
     amounts sufficient to satisfy any Federal, state, and/or local
     tax withholding requirements.  With respect to payments in the
     form  of stock, an amount of stock shall be withheld from  the
     award  that  is  sufficient to enable Conrail to  satisfy  any
     Federal, state, and/or local tax withholding requirements.


     11.  Designation of Beneficiary
          A Participant may designate a beneficiary(ies) to receive
     any  payment pursuant to the Plan that has not been made prior
     to   the  Participant's  death.   Such  designation  must   be
     submitted  to  Conrail's Assistant Vice President-Compensation
     and  Benefits, on a form provided for this purpose.  Such form
     is  available  upon request from the Administrator-APAR,  18-B
     2001  Market Street, Philadelphia, PA  19101-1418.  In the  ab
     sence  of  such  a  designation, a Participant's  most  recent
     designation  of  beneficiary(ies) pursuant to a  prior  annual
     performance  achievement  reward plan  maintained  by  Conrail
     shall  be treated as his/her designation for purposes of  this
     Plan.

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<PAGE>


12.  Duration, Amendment, and Termination of Plan
     --------------------------------------------
           The Plan shall take effect on January 1, 1996.  Conrail,
     by action of the Board, may amend or terminate the Plan at any
     time.   In  addition, Conrail's President and Chief  Executive
     Officer  may  amend  the eligibility requirements  and/or  the
     schedules of awards under the Plan, in connection with  a  re-
     assessment   of  positions  or  changes  in  organization   or
     staffing.   The  Plan  shall  terminate  automatically  as  of
     January   1,  1997,  unless  terminated  earlier  by  Conrail;
     provided,  however, that such termination shall  not  preclude
     the subsequent payment of awards earned under the Plan.



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