HUGE LOSSES.

Press, Volume LXVI, Issue 20097, 28 November 1930, Page 20

HUGE LOSSES.

AUSTRALIAN RAILWAYS.

£31,488,096 IN FIVE YEARS. It JtOM OCR own COERESC'OWDF.ST.) SYDNEY, November 20. When it comes to railway losses there is a bond of sympathy between Australia and New Zealand, but it is certain that the Dominion cannot boast such a record as Australia—£3l,4Bß,oSG lost in five years. This is in accordance with a report just prepared by the Commonwealth Railways Commissioner (Mr Gahan), who strongly advocates the elimination of the present division of control by seven separate administrative systems. Colossal as these losses are, the true loss, it is stated, is even greater because of the inadequate provision for depreciation and obsolescence.

Mr Gahan recommends that the Ministers controlling transport in the various States should consider tho appointment of a committee of controlling railway commissioners to investigate the railway position on a national basis. The post-war riße in the price of materials and labour costs, ho says, has increased working expenses out of all _ proportion to the earnings. The position has been accentuated considerably by large additions to capital and consequent increased interest charges, with no provisi< . for writing down capital. On some of the railway systems in Australia rolling stock that was 50 years old remained on the books at its original value.

Aerial transport was entering into the field of competition with the railways, said Mr Galian. Subsidised aerial services had been introduced without consultation with the existing railway administrations, with consequent overlapping and economic waste. With the aid of a Government subsidy of £39,000 per annum a weekly service between Adelaide and Perth was competing for passengers at the same fare as the railways, the result being that in addition to the annual cost of the subsidy, th • taxpayer was called to make up an added deficiency in consequence of the passenger traffic that was taken away from the railways. In addition, the Commonwealth had incurred considerable expenditure for interest and depreciation in the provision of landing grounds and beacons for night flying. lload competition had placed the railways at a disadvantage, inasmuch as road motors had selected high paying freight on which the railways relied to compensate for the low rates on primary produce. Motors had not been charged with the full cost aud depreciation of the roads that they used. Motor carriers in many cases had conveyed merchandise at less than cost. Legislation was necessary to provide that that form of transport should bear its full cost. The trend would be for railways to rely mainly on suburban passenger traffic and long distance traffic both in passengers and goods. Road transport would encroach increasingly on the short-haul traffic. Problems of Control. In view of the suggestions that are made from time to time that the railways should be given over to private enterprise, it is of particular interest to read in Air Galian's report that the policy of Government control has been pursued so far that a change to private ownership is now impracticable. This is at once apparont when it is pointed out that the capital expenditure on Australian railway systems now exceeds £334,000,000, or more than £SO per head of the population. Purchasers would require wide powers in order that they could close down all non-paying lines, a policy which no Government seems brave enough to adopt,. Governments just go on losing, although they know full well where the losses are being incurred. They take no steps to stop the leaks.

Breaks of gauge also provide a serious handicap to the economical ■forking of the railways as a single system. The huge additions to the railway capital in the past seven years, amounting to more than £83,000,000, certainly sugg&ots the need for a central authority, so that due regard could be paid to the effect of future works on the ultimate cost of gauge convei~ nioa. Under the present divided control,

too, there is rate-cutting between one State and another so as to attract business from centres adjacent to tho borders. Disabilities. By way of emphasising the disabilities under which Australian Railways are working, it might be pointed out that there are now eleven commissioners controlling the operations of 26,503 miles of railways, divided into seven separate systems. The absence of unified control which is a feature of modern systems in other countries, militates against uniformity of administration and standardisation of stock, plant and equipment. For the financial year ended June 30th, 1929, the Australian railways, with a revenue of £48,000,000, employed an average staff of 11] 529. The Canadian National Kail- I ways with rpproximately 25,000 route miles', and a revenue of £■ 56,000,000, annually employs a staff of 109,000. As an illustration of the disabilities of divided administration the present roundabout route from Sydney to Perth is cited. Although the nearest route would be via Broken Hill and Peterborough, overland passengers from Sydney are taken via Melbourne and Adelaide 348 miles further than they need to travel to reach the same point.