RAILWAYS' HEAVY LOSS

Chronicle (Levin), 17 September 1948, Page 7

RAILWAYS' HEAVY LOSS

Press AssoczationJ

Fuei And Higher Wages Major Factors

(Per

WELLINGTON, Sept. 16. In present ing the Railways Statcment to tiu* House this •evening the Minister of Laihvays (lion. R. Semple) said: "The gross revenue t'or the vear was £17,071), 672, which surpassed the previous record attained last year by £1,200,615, or 8.87 per eent. The greater part of thi's additional revenue was received •from the increases in rales and fares which applied from Kepteuiber 14, 1017. Rail t'ares other than suburban wero increased by 15 per eent. and freight rates were increased by 20 per eent., and these increases produced £1,300,700. ' 4 Passonger revenue doclined bv £566,000, due to a large extent to the verv heavv decrease in Armed Services traffic. Added to this was the loss of passenger traffic during Easter, 1047, and Christmas, 1047,' 011 tlie latter occasion due to the outbreak of poliornyelitis. "The revonues from subsidiarv ser vices were well maintained witli the exreption of those produced by the re-fre-hiiieut braiich, the receipts from which are sabstantiaily afl'ected by the density oi passeny or -traffic. " in contrast to the passenger traffic, goods traffic coutinued to rise and new records in both tonnage and revenue were sef up. Even withnut the increase iii 1 r* ".giit rales. the goods revenue v. onLl have been a record. This was a pa: ! iciilarl v line eli'ort, accomplished ' de.-pite the coal shortage and the difii culties at present associated witli wagon supply. "Gross expenditure for tlie twelve moiiths was £1 7,710,607, a substantial increase of £1,766,627. or 11.08 per eent., conipured witli last year. Tvvo i.lems part jcularly were responsible for 1 this increase — namely, wages and loco- ' motive fuels. "The total wages bill rose ' by | £766,01 K), liartly due to additional hours j woike l, but mainlv due to higher rates of pnv and iinprovcii conditions of emjdoynieiit. The cost oi' locomotive fnels ri.w' by £673, (MU), due to the increased use of imported coal and fuel oil. "The net result was a loss 011 working of £6 !0, 025. As irulieated m ni_\ last Ntatemenl, ii was estimated thai the iiii-rease in raws and fares would nol iu; sutficieut to ba'lance revenue and expendit ure, imt the sum required from t lu ote Erouomi • Htabilisation — was | .arger tiian ant icipated.' due to further j increases in v\age aml fuel costs. Locomotive Fuel. Lidiculiies as-ociaTed witli the coal shortage have coutinued to cause much worry and con-ern and ouly the bare niaiin • ua :iee of ihe eoal-saving timeieb'e has been possibie. The totai quantitv of coal mn-umed by loconioti\es (iecreas d from 503,631 tons to > 7 i» ; v but the actual quantitv of New Zeeland coal consumed decreased ! »y *1.320 tons. In order to maiutaiu reasonaiile s« rvi'*"-, 00, *12 tons of Ainerican coai (55 467 niore than lasi y> iin wero used, pius 24,2i6 tons of fuel oil. £ 6 ; : . ■oust.-rvai! e.l.y estimated tliat ihtq cost oi nsing this imported coal was al ieast £635, oue more than the ■osi .if an eqfi'nalent (juantity of New Zealand hani ci.il. This ainouivt is o'liiosi equal to ilic loss 011 the year's working. It sliouhl 1h> noted that the Oaiiways Iiepart ment is carrying the 1 iioie iiurdon uf the hiqher-priced imported coah In the years liefore the •. ar 1 oiishieraiiie qua.nt ities of coal u'ie :nqioi ,■•! 1 1'oni Aui-tralia for use j ii ' .iri'i.o 1 11 ' us : riarticnlarly gas- 1 ' The-. • i:ii!;;st . ies now have the 1 isl vant a^e o, tlie u. e of the New Zea- I and coal. parliciilarly hard coal, at I .\eo Zeaiand pi'iceo i'o :iiu.-i:a!e t e- pri'-e rise 111 im-•ori-il ■ua! I noiy Muiiion tliat during >■« r> le'l I to .\u.lralian coai " 1 the .• . Zea.and iiailways ap- • 10 .iuia;. L £2 f? oi | | »c j lun, whereas . !ie awiage c(iv.i jK.j- ton of coal im•orted d;:;:iiM tjj,. fiaancial year ended • 'Ui i L 10L*. was o\er £li). By way 1 1 0,1 1 casi . t i t '• averaue cost for the • 'a: oi >.eu th'd.-ii'l J.ard coal deliver4 ; n iii" N'oi-.i, j.laml was £2 12s )d or ton. Aonnally this additional cost i.ojuilid coal would ha e b.eu l.i.rae by ali indastrios pre- ; "in !;, iihm.u i 111 1 »•»'-( i»r I coal, but as a "■•'lc i'e .i the Zailv.a.-.s Pepart-. :' i nl liiii ,i g the wholo iiurden. V !ii"i tina ici.4 • o.:q»;; i lsons are inade, hereiore, this ladnr must lie borne in nii nd. "In adrl'lioii, th is the cost of oel oil which increased eonsideralily during the year. While tlie use of fuel oil is 11101 0 eeoiionii'-al than the use of \uiericaii coal, the exlra ost o\er and ■- bo\ c timi of a s'.pply of New Zeaiand hani coal wjlh a:i eqni al'Mit i'uel valuc was approxiniately £140,000. "Good piogj-i.ss has been made with ihe con\ crsioii of !n oa.otivi s to oi 1inirifing. auil at tlie end of tlie year a total oi 31 oil-'iurning loconiotives was iu service. A ■ he 0!l,l 0f the year it was understood that the allocation of luel oil would l>e limited to a quantitv sufH'-ient for ouly ;:5 oil-burning loconiotives, lmt siiice tinui an inereased allocation has been obtained and tlie Depart itioni is proceeding with further conversions. Public Interest in the Railways. "Tlie experience of the war and the extensiye railway developments taking place overseas enqthasises tlie part that our railways must pla.v 111 the fnture econoiiHc aml soiual development of the Dominion. and 1 cannot overemphasise tlieir siginficaiice as the basis of our jiresent t ransportation system. This is borne out by tii(> year's statistics of 26. (HIO, ()()() jiassenger journevs and 0.50(1, iTtin tons of goods carried. These transportat iou ligures. together with the levei of fares and freights, show the" important part railway transportation j plays in the cost structure of tlie coun- J try, ujiart from tlie social service ])ro- 1 vided. Lt is essential, therefore, to pav ■ full regard to the railways as a stabilis- j ing factor in the Dominion 's eeonomy, j and the country niav rest assured that J everv efi'ort is bei'ng made to provide ! a modern railway service at the lowest possibie cost, for it is obvious that the railways must be regarded as a prime function of industrv and must be used to the best advantage generally in the public iuterest. " A feaiure eniumoi) to al! raihvav '

operation is the high percentage of 'fixed charges ' iuvolved -in the cost of operation, and this factor necessitates the fullest possibie use of the system generally. It is the policy of the Goveniinent, through the careful coordination of all forms of transport, to ensure that the services available tlirougli tlie railways are used in the best way possibie to serve fhe country 's interests. Prospects. "At the ti uie of wuiting it is estimated that for the year ending March 31, 1041), the revenue will be £18,003,000. That is to sav, there will be a losa on working of £000,000. Estimates prepared earlior in the year indicated a prospective loss of £600,000, but since theu further provision has been inade for" additional conversions of loconiotives 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 faet that stauds out is that the predicted loss is due to a large extent to oue factor, and that is the fuel situation. The maintenance of even a restricted service inakes 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 gxeatly inflates the railway expendituve. Even wit'h the use of fuel oil and imported coal, passenger services must still be severelv restrieted, and this has a very adverse effect upon passenger revenue. It is estimated that for the coming year ending March. 31, 1949, the cost of using imported coal and fuel oi] will exceed by £984,000 (on the new basis of ex'eharige) what would liave been the cost of a quantity of New Zeaiand coal having an equivalent fuel value. Apart from this additional cost, the resuits for the next year sliouhl sliow au approximate balance between working expenses and revenue, but a ehangiiig trade situation may affeet the financial positlon, and the matter will be kept constantly under review. "Finallv I want to record my appreciatiou of the excellent service which the staff as a whole have given to the Deparlmont nnd to Ihe public,^