ANNUAL RAILWAYS STATEMENT SHOWS CONSIDERABLE LOSS ON OPERATIONS DURING LAST YEAR

Bay of Plenty Beacon, Volume 12, Issue 97, 20 September 1948, Page 4

ANNUAL RAILWAYS STATEMENT SHOWS CONSIDERABLE LOSS ON OPERATIONS DURING LAST YEAR

. Gross Railways revenue for the year was £17,070,872, which surpassed the previous record attained last year by £1,390,815, or 8.87 per cent. The greater part of this additional revenue was received from the increases in rates and fares which applied from 14th September, 1947. Rail fares other than suburban were increased by 15 per cent and freight rates were increased by 20 per cent, and these increases produced £1,300,700, according to the statement table.! in the House by the Minister, Mr Semple.

Net result was a loss on working of £640,025. As indicated in the last Statement, it was estimated that the increase in rates and fares would not be sufficient to balance revenue and expenditure, but the sum required from the vote—Economic Stab- - ilisation—was larger than anticipated, due to further increases in wages and fuel costs. Passenger revenue declined by £566,000, due to a large extent to the very heavy decrease in Armed Services traffic. Added to this was the loss of passenger traffic during Easter, 1947, and Christmas, 1947, on the latter occasion due to the outbreak of poliomyelitis. The revenues from subsidiary services were well maintained with the exception of those produced by the Refreshment' Branch, the receipts from which are substantially affected by the density of passenger traffic.

Goods Traffic Records In contrast to the passenger traffic, goods traffic continued to rise and new records in both tonnage and revenue were set up. Even, without the ihcrease in freight rates, the goods revenue would have been a record. This was a particularly fine effort, accomplished despite the coal shortage and the difficulties at present associated with wagon supply. Gross expenditure for the 12 months was £17,710,897, a substantial increase of £1,766,627, or 11.08 per cent., compared with last year. Two items particularly were responsible for this increase—namely, wages and locomotive fuels.- * The total wages bill rose £786,000, partly due to additional hours worked, but mainlyydue to higher rates of pay and improved conditions of employment.

The cost of locomotive fuels rose by £673,000, due to the increased use of imported coal and fuel oil. Coal Difficulties

“Difficulties associated with the coal shortage have continued to cause much worry and concern and only the bare maintenance of the coal-saving timetable has been-pos-sible,” Mr Semple explains. “The total quantity of coal consumed by locomotives decreased from 593,831 tons to 567,978 tons, but the actual quantity of New Zealand. coal' consumed decreased by 81,320 tons. In order to maintain reasonable services, 90,812 tons of American -coal (55,467 more than last year) were used, plus 24,266 tons of fuel oil. “It is conservatively estimated that the cost of using this imported coal was at least £635,000 more than the cost of an equivalent quantity of New Zealand hard coal. This amount is almost equal to the .loss on the year’s working. It should be noted that the Railways Department is carrying the whole burden of the higher-priced imported coal.” This Year’s, Estimates “At the time of writing it is estimated that for the year ending 31st March, 1949, the revenue will be £18,093,000 and the expenditure will be £18,993,000. This is to say, there will be a loss on working of £900,000. Estimates prepared earlier in the year indicated a prospective loss of £600,000, but since then further provision has been made for additional conversions of locomotives to oil-burning and for the increased use of imported coal. Due allowance has been made in the latest figures for the alteration in the rate of exchange. “The fact that stands out is. that the predicted loss is due to a large extent to one factor, and that is the fuel situation. The maintenance of even a restricted service makes the importation of coal from overseas and the extended use of fuel oil an absolute necessity, but, as previously pointed out, the cost of so doing greatly inflates the railway expenditure.”