TROOP TRANSPORTS

Dominion, Volume 11, Issue 271, 5 August 1918, Page 6

TROOP TRANSPORTS

COST TO NEW ZEALAND

DEFENCE COMMISSION'S

REPORT

"During our investigation wo received most varied testimony about the cost the Dominion is paying for the transport of its troops at home and abroad; so we determined to sift the matter thoroughly,' and no section of our inquiry has caused us more trouble," stntes tho Defence Commission in its report. The Commission proceeds to state the facts about the hire of transports at considerable length, and quotes many extracts from tho evidence heard during the inquiry. Tho evidence of the general manager of the Union Ship Company showed that the Government had paid ,£359,400 to the company for hire of certain ships. The cost if the hiro had been at Admiralty rates would have been ,£388,444, The average net rate per gross ton por mouth on the vessels now employed by tho New Zealand Government is 14s. Id.; under the British Government Expeditionary Force chorter the average net rate per gross ton per month would bo 15s. 2d. per ton; under the United States of America form of charter tho average net rate per gross ton per month would be .£1 12s. 3d. per ton. These rates were fixed after three years' experience of war conditions. "We have be«n reminded," states the Commission, "that tho net rate per gross ton per month paid for transports em-, ployed during the Boer War was 17s. 9d.; and all costs, such as for coal, Btores, provisions, and labour, have increased since the period of the Boer War; no that experience gained sinco, and matters ventilated immediately after that period, do not seem to have been in vain, "A witness who would bB presumed to know something about the matter confidently assured us in his evidence that the cost of reconditioning chartered vessels (i.e., restoring them to approximately their condition before taken over by the Government) on surrender to the owners would bo nearly, as much as the value of the ships themselves. We therefore asked the Union Company:— " 'Will reconditioning of the chartered vessels bo a serious. matter in cost of time and money? Can you give an approximate idea as to the cost of typical vessels?' "To which the company replied:—'We do not consider that tho final reconditioning will be a very serious matter. The actual cost will depend upon' circumstances existing at the time, but if there is freedom from congestion, and sufficient .labour is available, we ■ estimate that the two smaller ships, the Mokoia and 'lofua, will each cost J!G000 to AaOOO, the Maungnnui and Tahiti ,£l2 000 to .£14,000, and the Marama and Maheno .£13,000 to £15,000. The time occupied in reconditioning is expected to be three to four weeks for each steamer, and wo have agreed with the Defence Department that quarter-rate of hiro only will be charged during such time of reconditioning.' ' "Evidence wo have since gathered from competent authorities sems to endorse the above' estimates. "We submitted in advance to the chairman of the Transport Board tho full evidence (questions and answers) of the general manage:' of the Union Steam Ship Company, and the resutt is shown in Hie:following questions and answers:— "Q. 59. Arc you aware of the arrangenwut between the Union Steam Ship Company and the Government with 1 regard to tho conveyance of troops? "A. Yes. "Q. GO. Do those answers by the general manager of tlie Union Steam Ship Compiuy correstly set out the position as to cost? "A. Generally speaking, tho position as regards the cost of charters is fairly stated, tho only difference being tho method of computing tho costs. "Q. 61. If not (vide last question), please show in what way they are incorrect, giving tho correction in figures. "A. Tho Union Steam Ship Company in arriving at tho cost to tho New Zealand Government under Zealand charters have apparently chosen' as a basis the cost of one of their vessels under Imperial charter, whereas our statement of cost, which is attached hereto, shows tho actual cost of • New Zealand transports after reallocation of some of the costs to make the comparison applicable to Expeditionary Force charctcrs. "Both the Union Steam Ship Company's statements and tho Department's statements clearly show tho New Zealand Government in a most advantageous position regarding the cost of charters in comp.trisai 'with Expeditionary Force charters which are adopted by the' Imperial Government and most of the other colonies chartering vessels for trooping purposes. "Tho Union Steam Ship Co.'s statement shows that the New Zealand Government benefits to tho extent of J,'28,983 per annum. The Department's statement shows that the New Zealand Government actually pays some =870,328 per annum in excess of Imperial charters (a difference of opinion of £99,311). Against this, however, 'the New Zealand Government has several advantages of great intrinsic value :— "(1) The New Zealand Government's liability in the event of loss of the vessels is less than under Imperial charters, the New Zealand Government having only to pay at an agreed value which is much less, than market value, whilst under Imperial charters ■ full market values must be paid in the event of loss. The difference between New Zealand charter values and present market values is an average of £10,000 per vessel; this iu regard to eleven vessels is £1,100,000. The average war risk during the period of the war is in the vicinity of 4 per cent. This war risk is payable each time a vessel traverses the danger zone, us each of our vessels traverses the danger zone four times per annum, the precise saving to tlra New Zealand Government under this advantage is 10 per cent, on £1,100,000, equal to £170,000 per annum. "(2) The Union -Steam Ship Company disburse on the Government's behalf for all repairs and refitting to the vessels at Port Chalmers; the average amount outstanding under this head is £80,000. This at 5 per cent, amounts to £4000 per annum. /"Taking the above circumstances into consideration, the position is that the New Zealand Government, undor present system of charter, benefit to the extent of £110,000 per annum against what would be payable under the alternative Imperial system of charter for conveyance of troops. "This was satisfactory so far as it went; but we wanted the matter cleared beyond cavil, and, with tho difference of oouiion unsettled, we felt that the position was too open. The Union Company was cither right or wrong. Further conferences and discussions took place between tho Union Company and the Government's experts, with certain references to ourselves, and ultimately we received from, tho Director of Movements and Quartering (chairman of the Transport Board) the following memorandum, dated May 31, 1918:- " 'With reference to my answer to question No. 61, given before your commission, I have to draw your attention to an error inadvertently made in compiling the costs ol charter of New Zealand transports. "'ln my statement the New Zealand Government was shown as paying £70,328 more under New Zealand charters than would bo payable under, Expeditionary Force charter. This, with the other attendant advantages, was ultimately converted to show the New Zealand Government ns being in a most advantageous position, being some £110,000 per annum better off than under Expeditionary l'orce charter. "'Tho error which has now been discovered, however, shows the New Zealand Government to be £50,250 per annum better off than shown in the earlier statement, the precise advantage to New Zealand being, say, £100,000 per annum. " 'H. C. NUTSFORD, Major, "'Director of Movements and " 'Quartering.'"