HARBOUR INQUIRY.

Dominion, Volume 7, Issue 1929, 11 December 1913, Page 4

HARBOUR INQUIRY.

WESTPORT BOARD'S AFFAIRS. THE COMMISSION'S REPORT. UNNECESSARY WORKS. HOW THE MONEY WAS WASTED. REAL WORKS NEGLECTED. The report of the Wostport Harbour Commission, set up on September 2 last, was presented to tho House of ItepreBontativcs by tho Hon. I<\ M. B. Fisher, _ Minister of Marine, last night. The instructions of the Commission were to inquire into and report upon the administration of the affairs of the Wostport. Harbour Board under a nominated hoard, with special reference to a number of questions set forth in the order of reference. The members of the Commission were Messrs. J. S. Evans, S.M. (chairman), William Ferguson, and Gerald Fitzgerald, i

Following were tho answers of the Commission to the particular question in the order of reference:—

Administration—Not Satisfactory, "Has the administration' in tho past been satisfactory?" In. our opinion the administration in tho past has not been satisfactory. In making this statement wo have not lost sight of tho fact that wc are reviewing; the operations of successive boards extending over a- long period of years, and that we do so with tho experience resulting from their operations. In view of this wo have to a largo extent discounted or modified tho inferences that might, have been drawn from the facts placed before us, and have endpavoiifctl to place the facts before Tour Excellency' in an impartial manner. Some of the matters to which wo have, referred call for special comment.

1. Tho expenditure of tho board, whether from loan or from revenue, ban not been watched with that, amount of care that should reasonably bo expected from any board entrusted with the expenditure of public moneys. Tho members of successive boards have appeared not to have realised that they were trustees acting under -statutes, and they failed to realise- the essential fact that their duties under that trust wore to administer tho funds in tho interests of the Dominion, and not primarily in the interests of the.people- of Westport. For example:—

Some Examples. (a) In so far as genera! traffic is concerned on the Capo Fculivind railway, the interests of the district have been considered rather than the objects of the trust. _ More labour has been employed in its maintenance than was necessary, high rates of. wages havo been paid, excessive passenger-train mileage has been run without benefit to the works, the tariff rates wore , too liberal, and some of them were not properly enforced. Sidings have been constructed by the board for private individuals without jiaymcnt or rental. (b) Tho coal shipped over the wharf did not bear for some twelve years tho charge which- Parliament had ■ determined it should contribute towards the- repayment, with interest, ot the moneys expended in, forming tho' port and railway thronifu-whieli.it was shipped; and,further,' siiree the rate has been collected it has been applied in substitution for, and not in addition to, the contribution towards the sinking fund properly chargeable to tho board's ordinary revenue.

(c) The manner in which the operation, of dredging lias been ■ conducted, and in particular the hours worked, has been more in the interests of tho workmen than'of benefit to the port. (d) The loan of plant, with or without payment, or with insufficient payment; the sale, gift, or less of material, old or now, was controlled solely by local, and in somo cases personal, considerations.

(0) The enforcement of contracts within contract time was lax, and resulted in benefits to contractors and local agents.

Incomplete Records, 2. The method of recording the results of tho deliberations of. tho board Ims not been satisfactory in that it has been found to bo impossible to trace through the minutes the history of important transactions. . There is an almost complete absence of information relating to tho physical conditions and variation of the 'river with respect to its flood-levels and transport of shingle. This information is indispensable in liarbonr works of tho character of thoso at Westport. There has been an absence of systematic and periodic soundings outside tho harbour and in its entrance, with the result that the history and changes of the littoral drift, have' not been recorded.

AYhero local authorities carry 'out their works by'contract there are necessarily records and data from which tho progress and cost can be measured, but in the case, of ihe Westport Harbour .liarbonr Hoard, whose works Imvo been carried, out by day labour, there have been no corresponding records and data kept.

Purchases of the Rubi Sflddpn.'. 3. With regard to tho purchase of the dredge lhibi Seddon, the evidence' and files placed before us show that the board did not conduct the transaction with the amount, of prudence that reasonable business men would have brought to bear in the conduct of their own affairs. In tho • first place, th-cir original instruction!) and specifications for the dredge were framed in such n way that only one firm could tender, and, in fact, instructions were given to ask for prices from only r-np firm. When the dredge arrived-in JVestport It was found that she was not built in accordance with the specification, because she would not lift stones of the sine specified. The hoard's attention' was drawn lo this fact by their cugin* per, Mr. Young. By this time, however, file boar dwas precluded from' rejecting th.-' dredge because, they had accented delivery at Wellington through their agents, the l'aihvav Department. Hut it anpears to us that the hoard was negligent in. not endeavouring to force its claim against the makers for breach of warranty. Tho Board was Imprudent.

4 The hoard was imprudent, firstly, in not fully settling the design with flip Railway Department'-for tho sidings surrounding the floating basin, and making adequate provision for tho necessary land; and, secondly, in not ascertaining the cost of such equipment and land, and adding it to the estimated cost of the floating basin upon tho ulan submitted In His Excellency the Governor for fho purpose, nf obtaining his apnioval of tho work. .). In forming a recreation-ground and an esplanade and diw.nisin.jj; them in their accounts tinder the names of "Cape Foulivind Railway Reserve" and "harbour-works" respectively. the heard were blameworthy, and were negligent in not ohtaining a full design and an estimate of the cost of the esplanade and in not ascertaining whether these works were harbour vrorks within tlie fcope of their authority. Tho minute of the hoard's resolution authorising the formation of tho. esplanade ''♦.is'calcwlated, if not intended, to mis-

I lead. The hoard did not watch the expenditure, nn theso works,, with tlm result that £0220 14s. -Id. was expended I without tlin board having realised the. fcxlonl of the expenditure.

No Eeonomy. "Have the irorks been carried out with economy?" _ This question to some extent overlaps the former one (a), and tile answer naturally follows as a corollary. This hoard's works have not boon carried out with economy. Tho bulk of tho evidence with regard to extravagance h'is been limited to tho last fifteen, years. The manner in which dredging was carried out, as set out in paragraph 1 (c) in tho answer to the previous question, of necessity entailed a considerable wasto of money in wages and other expenses. The failure to enforce contracts, to which reference is made in paragraph 1 (o), also entailed considerable waste, especially in the construction of tlio floating basin. . Tho overstaffing of all tho works, the employment of old mon, some of whom wore past doing a fair day's work, and thu payment of a higher rate of wages- than elsewhere obtainable, all tended to make the works of tho board unnecessarily expensive.

losing Land. "Has the board in the past taken reasonable care that tho land reclaimed at tiie board's expenso should not bo alienated irom the board's control?" lu answering this question wo have to point out that tho board has not directly reclaimed land «;eept to an insignificant extent, and then only in immediate connection with their structural works. These lands have not been alienated from tho board's control. Indirectly, however, land has, been made by accretions to the coast-line resulting fiom tlio works of'the, board. There is a conflict of evidence regarding theextent of these accretions, hut we are satisfied that a considerable* area hns been gained upon whKt is known as tho South Spit. This spit, with its accretions, from its position and the fact that important works of the board are there situated, ought to have boon acquired by or reserved to the board for harbour purposes. A reference to the facts relating to this ..dand, will show that tho land hns jiassed out of the board's control without reservation of any rights .to the board. In our opinion the hoard should havebeen awaro of the- importance of «cquir» ing control over this laud. It is clear from the facts that' the board was not officially made awaro of or consulted in regard to the application upon which tho present title to the land was grant-

ed. Tho applicant for tho land was a member of the- board, tho solicitor who acted for him was solicitor for tho board, and other of tho board's officials wore cognisant of tho application,' but, with tho exception of Mr. Sinclair, they made no attempt to ]>veserve tho interests of the board.

Dues Equitable, "Under the existing method of levying wharfage rates or dues, is _ tho burden of responsibility of maintaining the part boruo equitably by those concerned?" Upon this question little or no evidence was forthcoming, beyond some expression' of opinion as to whether the port should be free, either in whole or in part. • The. amount of revenue derived from wharfage rates or dues is small iu proportion to the endowed income of tho board. We recommend that tho charges for wharfago and labour levied at Westport by tho Railway Department bo revised so as to reduce them where they are in excess of thoso chargeable at other railway ports. After consideration of the slight evidence that was brought boforo us, and on comparison of the charges made elsewhere on ships iu coaling ports, and .in view of the largo revenue derived by the board from the principal export-coal—-we are of opinion that no alteration in the amount of dues derived from ships should bo made, or in the rates' charged on coal.

"Disguised or Concealed." "Tho system which has been adopted in connection with keeping accounts of tho detailed cost of work of construction and of maintenance." 'Tho board have kept their accounts upon a system of double entry. This system would have been satisfactory if tlio headings had been sufficient and tho items properly separated and extended. This lias been inefficiently done, with tho result that tho cost ot separate parts of the works cannot be ascertained. A serious disadvantage that arises from extensive grouping under general heads is that the nature and cost of any particular- work may bo disguised or concealed. "Altogether urtsatlsfactory.*' "The method of keeping tho trading accounts of the board." The method of heaping these accounts is altogether unsatisfactory. Such accounts should properly be entered in the ledger, and the amounts thus shown to bo due should appear as credits in tho balance-sheet. The" board seems to have been unaware, of tho number of those accounts, ami the extent to and manner in which this trading has been carried on. Closer supervision, by /responsible officers should be exercised, in the sale of old plant and material, and a proper system should bo introduced and carried out whereby such sales would' be- brought into account in the books of the board. The extended credits that appear to have /been given ought to ho discontinued in favour of a system of cash payment. Loading coal. "The suitability or otherwise of the present facilities for loading ctial." Two methods of loading coal are in vogue—(l) by means of steam cranes, and (2) by means of staitlis. The first is a satisfactory system, and tho existing facilities are ample for the present trade of the port, or possibly for" se.mo increase thereon. The second method is obsolete and very little used, and in our opinion should be superseded by further crane accommodation as required by the development of the trade. A Big Work— Not Warranted. "Is the const miction, of the floating basin or permanent slipway necessary, and if so, is it an urgent work?" This work is, in our opinion, not necessary, and therefore not urgent. From the experience of the port the risk to shipping from floods' in the river has not been found to be so great as lo warrant the construction of the basin as a refuge. In view of the estimated life of the coaifields, and tho probabilities of tho increase of ihe coal trade, there is ample accommodation for'shipping -upon the river-front, particularly if ihe staitlis are removed and a wharf substituted with crano equipment. The floating basin will not make the river more easy to navigate, and systematic dredging will keep the river navigable for vessels of deeper draft than arc at present plying to AA'cstport. The_ construction of a permanent slipway, cither by itself or in conjunction with a floating basin, is not warranted. The natural conditions prevailing at AYostport render it highly improbable that vessels trading to that port would use the slipway except in case of accident. Hie smaller vessels of the board's flotilla can be accommodated upon the gridiron as in the past, and the annual cost of taking the larger vessels to another port is not sufficient to justify the proposed expenditure npon a slipway.

Chango Necessary, "As.to whether tho conditions of the endowment provided under Sub-section 2 of Section 7 of the Weslport Harbour Hoard Act. ISB-J, should bo revised." In considering this question ivo beg to tKiint <mt to Your Excellency that the hoard has under, statutory, authority from time to time pledged its endowments, of which this is a part, as ?, so-

fMiritv for ali its loans. In view of this iael it will bo necessary in any proposal revision of this sub-section to consider whether the bondholders will bo isijuri(insly affected in respect of their securities, Wo believe that Komo change is necessary in the control of the iiwjjt' income arising from the hoard's endowments. 'This change might lake ono of Uio three- following forms: —

(a) The Government might, with the consent of the hendbo'ders, guarantee the whole of the loans now secured upon the endowments of the hoard. (b) To set aside tho whole or a portion of the surplus inoonie of the board, after discharging its current obligations and providing for reasonable additions to harbour works, in order to pro-.'ido a further sinking fund in addition to ■those already existing until the combined sinking funds are- sufficient to satisfy the. claims of the bondholders and secure the interest on the loans. (c) Without permancntlv interfering with the security of the bondholders, place a duty upon the board to appropriate its surplus income towards recouping the Dominion the capital expenditure made by the colony on the works mentioned in the- said sub-section.

Life of ins Coalfields. Tiie Commission «Jso make the following interesting remarks upoii tho probable life of fn-u coalfields:— This is to a large extent a matter of estimation rather than ono capable of exact demonstration. A reasonable estimate of the life of the mines at present in work places it between forty and -fifty years at the present rate of output. New mines which may be opened mav increase the output and prolong the life of tho industry, but upon the best information available to date the end is within measurable, distance. Those facts must bo taken into account in any future, policy of tho Harbour Board. The question is aiso one of considerable imjiort-anco to your Excellency's Responsible Advisers in considering to what extent foreign export trado should l)e encouraged. Representations were made, to us" that it was tho duty of the Westport Harbour Board to encourage an overseas export trade in soft coal for steamer bunkering purposes, but as this question is of national importance and was not specifically submitted to us wc did not feel justified in undertaking an investigation of such magnitude under a, general direction ; nor do we feel in a position to make a recommendation further than to draw th.o attention of your Excellency to the importance of the question, and to advise that a full inquiry should, ho made before any sucli trado is encouraged. It has been stated to us that a 85 per cent, rebate! on the railway charges has been made upon coal shipped to places beyond the Dominion. We recommend for the consideration of your Excclency's Responsible Advisers that tho matter of this rebate should bo carefully considered with a view to its discontinuance. The Westport Harbour Board hiis authority to expend money in prospecting for coal, and some prospecting has already been done by the board, but for various reasons tho results have not boon, satisfactory. After <luo consideration wo arc of .tho opinion that tho question of prospecting for coal svnd the opening up of now coalfields is outside tho legitimate functions of tile Harbour Board,- and that suck work, if undertaken, could bo more successfully and profitably carried out by the Mines Department. Inasmuch as tho rc\ emtio derivable, from such discoveries and extensions within the board' 6 endowments would be paid to the board, it is reasonable that tho cost of prospecting within su.c'li_ endowment's (T slK!ii]d bo a clmrgo upon the board's revjnti'c, "'"' • In the committee's general report aro several passages'which"go to show even more than tho answers to the questions what the Commission wirilly' 'thought of the matters coining under their review, Followhig..are some examples^—-

Preponu'cratiGo of Interest. "In each successive board tho proponderanco of interest of the members centred in or around tho Borough of Westport, and for tiro most part no srfieme was followed in nominating persons as members of the board to represent the coal-mining industry, the shipping trade, or ' the Railway Department." that Goal Rote, In 1901 tho special eoal rato mentioned in Section .12 of tho Wcstport Harbour Board Act 1884 was struck, and produced £1157 Is. This rato ought to have been struck at tho end of 1880, but the board neglected, to move the Governor to bring the rato Into force, with the result that for a period of at least eleven years ail coal shipped from West-port escaped tho payment of this duo. In 188'J, and again in 1902, the Audit Office had drawn tho attention of the Government to this breach of tho Act of Parliament.

It may be explained that in the first complete year in which tho rate was charged the amount collected was £o'2Ui, and that tho amount in 1912 was £91-15.

Railway Wiiich Docs Mot Pay. "No proper or sufficient check , has been ke{it over tho working of this line, particularly in regard to passenger traffic and fares. Tho board has a printed scale of fares for carrying passenges on this line, but for years past this scale has not been enforced in tho , case .of passengers travelling for short distances, and the board or its executive officers do not seem to have been aware of this fact. The system of measuring logs carried for saw us Mors on the line is that'of measuring the square contained in the small end of the log and adding oue-tifth thereto. This system, or a similar one, has been abandoned by the New Zealand Railways for sonio years, as being inadequate for ascertaining the true contents of logs carried. Tho advantage is in favour of the samnillcr, with the result that tho sawmiller has his logs carried on this lino at a greater advantage than sawmillers in the- district and elsewhere obtain on tho New Zealand Government railways. The cost of upkeep and maintenance of permanent-way has been much in excess of the cost of similar work on the Government lines."

"A ccntraotor Named Foster." "One trading account calls for particular mention. Dining the iimc that a contractor named Foster was a member of the boai'd tho board let to him part of its plant. Foster had a contract with the Jloluoka Harbour Hoard. One other meinour of the board was interested as a guarantor in tin's fontract. The terms upon which the plant (pumping machinery and pumps) was let. were that Foster was to give a bailment over tlie plant, and deposit £100 as security for the payment.of rent and for tho return of the plant. The rent was fixed at 10s. a week. The bailment was executed, but no deposit was ltmite, no rent has been paid, and tho plant has been in use by l 1 aster over since. Theboard towed tlio plant to Motuoka for Foster by moans of its tug at a booked charged of £77. Tho charges both for towage and rent are very low, and nothing h«s been paid on tho amount. These charges have not. been brought into tho hooks of account of the board, and were not submitted to the Government auditor. This absent- plant is not covered by insurance. This soma contractor has at previous times, whilst ft mombor of tho board, had tho use of the. board's plant for .tlio purposes of his business as a contractor, and upon advantageous terms. Upon occasions other plant of tho board has lH'.~n hired upon inadequate terms, and in some instances loutfree of charge-," Mot Harbour Wcrlss. "In 1 :JO7 the board pasw-d (lie following resolution:—'That tho esplanaite

from Wakt-field Str;-.':fc up the finite' River to the liuHcr Bridge be constructed as early as possible, and formed from waste quarry material, with a view of preventing and stoppmir the weariii..away o! the river-bank and also to giuj facilities ior trains i a the houses on the esplanade, which will be nccreaary when the new siding arrangements of the Railway Department tire put into operation.' This work was cmnwieivcod in the latter eiid of 1007, and' contiuuitl until December, 1912. ' The extent of the work is as follows ;—-Length -of cut stone wall, 511 ft.; rough stune wall; 242 ft.; total length of rauMormation, 2153 ft.; and average width of same, 33ft. The board expended in this work' £6133 Os. Od. in labour, mil £1)0 os. Bd. in material, a total of £6243 12s. U. The river-banik where this wall is con-' stnictcd is not subioct. to erosion in tho norma] state of the river. In high flood times there is a ljttlo current along the- rivor-lrank, but the erosion, if any, .13 very slight. Th.o necessity 'for tin's work as a harbour work does not appear, and no ■evidence was given tending to show that it was necessary. Plana of the work ware not prepared," nor estimates given as to the probable cost, liefore tha work was- ■undertaken. No plans were ever submitted to tl» Marine Department for approval. Tlk> cost of this work does not appear as an item under the head of 'Esplanade-;' but is charged to 'Harbour expenses,' and therefore- not sufficiently disclosed for purposes of audit. In I'Jflt the board ■also purchased some land at Capo. Foli.lwind, and between that date, and the end- of 191.2 laid, out and 1 fanned a pleasure ground, including tenuis courtsfootball grounds, and grounds for otlie-j games and sports, and bathing sheds. Oil these works the board lias expended, under, tho heading of 'Gape Fouhvitul Railway Reserve,' the sum of £-2086 Bis, 2d. This work is in no sense a harbmir .work. The total expenditure, on these tviro' items is £9220 14s. W'

His Brother on the Board. "At tho Uegkninf- 0 f igig t] lo after competition by public tender, let a contract to Martin ami C0...F0r (>lio supply of iron aliil- steel at Aril t/s.. 3d. per ton. The contractors applied to tho board to luivo the. rate increased by tho amount of £2 per toiij upon tho ground that the marltet rate' for this material had nscn. Tho Finance Committee of the board recommended that, this application should ho granted, and the board adopted that roeomimmdatioh, but stipulated, that if the pries should again fall during tho currency of the contract a corresponding I'odifctiou in pries should ho made, Tho members of the Finance Committee were on this occasion Messrs. Griffith's, Scanlon, and Hansen, and tho hoard's resolution adopting tlio proposal was seconded by _ Mr. Seaii'loft. Tho seovctavy stated in evidence that simi> lar alterations in contracts had been previously mado, A few months later, when application was mado by a Wellington firm to bo paid the sum of 18s. duty on timber supplied which by an oversight hod been omitted from 'their ■contract price, the board- declined to make tho allowance, and decided that the contract bo adhered -to,' on the motion of Sir. - Hansen,. seconded by Mr. Scan Ton. Mr. JY Seanlffli, tho mcHiVr of tho hoard', is a brother of a member of tho firm of Gcorgo Martin and Co* Although the, works of the- board have: been made more costly -through delay In t.-hc supply ■of ironbiirk und other materials .under'contrabt, -the board have not taken proper'steps .to havo tho contracts enforced. " Coratnission or Board?

lii conclusion the commission malm the following remarks as to the kimi of Iwdy that should control the board :—

"Tho natural features of the 'Westport- Harbom-'aro'-suoh tlmt-the exesu-tioH-iuid'lriftiii'tftnancti of harbour works require very special expert knowledge, in addition to whloh its revenue is " a.national endowment. • Wo -arc theroforo of opinion- that this harbour should bo placed under tho- control of -speciallyselected Commissioners having -expert knowledge, Our reason for mailing tins recommendation is that tho expiwipnco of tho past has shown it to ho beyond expectation .that .members -ran bo selected from a limited population possession tho requisite qualifications.

"If; however, a board is "to continue hi .existence, its constitution should bo (imcndccl in the direction of ing:a woi'o national representation -hi the several .interests alfoetctUiy tho harbour and its- wo As, and. wo would theii recommend a aoniihated-board, _ consist* ing- of six, members, representing tho, following interests, viz.— "(1) Tlio .eoal'iniTHiig interest. "(2) The shipping interest.. • "<3) Tho Railway.- Bepartniciit. "(4) Tlie merchants, as v-rpvesentea'. hy tho payers of dues on 'goods. "(5) fiio Borough, of Vfetport a.ud surrounding district. "((!) A statutory judicial chairman. •