RAILWAY CONSTRUCTION.

Evening Star, Volume IX, Issue 2667, 4 September 1871, Page 3

RAILWAY CONSTRUCTION.

The contracts entered into by Messrs Broaden and Go. are two in number, and both have many stipulations in common, but differ as to the amounts to he expended in railways, the amount of the guarantee of : dividend, the application of profits, and the terms of purchase. The stipulations that are common to each, arc —The ovcrnnient are at their absolute discretion to select the lines of railway, and may regard the requirements of the Colony, irrespective of the remunerative character of the railway. When a railway has been decided on the Government are to have the ncccssaiy surveys, &c., prepared, and are to determine the order and course, and the tci ms of constructing the railway, as also the specification of works and material. Each railway is to have a single wire telegraph with the necessary apparatus. When the probable cost of a railway is ascertained, the Government are to divide it into sections of about 10 miles each, and the time within which each section ’is to be completed is to be arranged between the Government and the contractors or settled by arbitration ; and of this prime cost 5 per cent thereon is to he added for the agreed profits of the contractors. The Government has the sole power of altering *ny agreed line of railway. The Government engineer at the eoinmencoinene of each railway and at the beginning of each calendar month, is to estimate the probable expenditure in New Zealand during the next three months, and the contractors arc from time to time to deposit with the Colonial Treasurer enough money to meet the ■me, and payments are to be made therefrom, according to the certificates of the Government engineer. Tno Government has power to declare any completed portion of a li ic open for traffic ; and the contractors are at their own coat to maintain the railway for twelve months. All necessary plant is to be subjected to the approval of the Government engineer in England. Proper hooks of re \ enue and account, subject to Government supervision, are to be kept by the contractors, who collect all tolls, &c. The contractors are to maintain the railways in through efficient working order, and pun not less than two trains each way daily, unless the Government otherwise direct, and such further number of trains as the Government may require, charging only fares and rates within limits to be fixed by the Governor in Council. The question as to running more than two trains a day may be referred, «nd as may also the question of rates and fires when the Government have to pay nothing under their guarantee, 'the trains are to at a speed including stoppages of Uot less than 10 miles an hour on railways posting under £3OOO a mile, 15 miles an hour on those costing £4IOO a mile, and 20 miles an hour on jffibse costing over that amount, Except where the Government eon ider the gradients or curves do not justify so high a rate of speed. The members of the General Assembly aud Provincial Councils are to he conveyed in the ordinary trains at 25 percent. below the ordinary fares and rates, and in the event of war or civil commotion, the whole resources of the railways are to be placed at the disposal of the Government at coat price. Poweris given to the Government to enlarge existing lines of telegraph, and it may use the same without charge, so long as railway traffic he not interfered with. In case of the bankruptcy of the contractors or their failing to carry out their contracts, the Government has power to take possession of the lines. Upon determination of the contract from the latter cause, the provisions of the contract with respect to guarantee of dividend division of profits and purchase are only to apply to the section or sections of railway then completed and opened for traffic and not taken possession of and the plant belonging thereto; and in the case of bankruptcy the contractors’ assignees or trustees toay withjn ffiofiths repay to the Government any’moneys expended, and enter into proper contracts for the completion of the fines. No contract is to be sublet without approval of the Government, and if assigned to a company, the company has to enter into a formal contract with the Government for aeourinfe. the due observance of the same. The Government are to have the right to appoint an ex officio director on the hoard of the company, both in England and in the Colony, with a right to vote at all proceedings of the Board, and only such charges for management and direction are to be allowed M the Government shall approve of. In the event of the Government purchasing the railways, they are to pay for the same in England within twelve months after the price is agreed upon. special proyhidns fctp !: thtis ! Stated. •’ Of popt' act No. 1 : Before the 21st of June, 1879, the Gpverpment are to entrust to the contractors the umkjng npd providing of railways and plant to cost J4,000,91)0, and the contractors are to make ind provide the same. The interest on capital employed during construction of a railway and in providing plant, is to be estimated'and added to the settled cost. The tooneys deposited with the Colonial Treasurer for expenditure in New Zealand are not to- hear interest. The police and other forces, when proceeding on duty, an;} fyp public mail!), afe te bp carried by tpe ordinary trains* at 25 pci- cent. ‘ below ordinary 'and fates. Payment for ’ lines and plant ip t° bp made ip Government debentures, SO yews to run with interest at 5 per cent. Government are to grant to the contractors such land, and so situate as the Government think fit, at the rate of three-quarters of an acre per LI of the cost of the railways and plant—one fifth only of which laud need be suitable for settlement. Such portions of tfVn’B fifth as may be required for immigrants are to be granted as required, and the contractor# we to ho allowed tho use of the real*

due as long as is convenient. From the opening of a railway till the expiration of 40 years, if no purchase is effected in the meantime, the Government are to pay the contractors such a sum as with the receipts of the railways, after deducting all expenses, will give a dividend of 5| per cent, per annum on the total cost of the railways and plant. Whonsuch receiptsarcsufficienttopay a dividend exceeding 8 per cent., the excess is to be applied to recoup any advances made by the Government under their guarantee exceeding 5 per cent, with the interest at 5| per cent, and subject thereby, is to be divided equally between the Government and the contractors. At the expiration of 40 years, and at any time previous by giving 12 months the Government are to purchase a line or section thereof, deducting therefrom the amount of any deterioration for wear and tear, &c. Within 10 years after the commencement of any railway the contractor.) are to ..laud not less than 10,000 European immigrants, to be approved of by a Government officer before sailing for Europe, in not less than the following proportions First year, 500; second year, 750; third year, 1000; fourth year, 1000 ; fifth year, 1000 ; sixth year, 1000; seventh year, 1250 ; eighth year, 1250; ninth year, 1250 ; and tenth year, 1000. The Government to pay for each immigrant so lauded, whether or not employed on the railway, LI in the month of December in each year for ten years from the time when each immigrant landed, unless in case of death or ceasing to reside in the colony. To encourage improvements the Government arc to guarantee mortgage bonds with interest not exceeding five percent., for not exceeding ten years, to an amount not exceeding one-half of the moneys expended, to the satisfaction of the Government officers, in such impiovcmcnts as may be approved by the Government, such bonds not to exceed L500,U00. The Government to have all the mortgagee’s rights to recoup themselves for any moneys paid under such guarantee. The principal features of No 2 Contract arc these : The Government are, with all convenient despatch, to entrust to the contractors the making and providing railways to cost LSUO,(JOO ; and during their construction to pay interest at the rate of 5.j per cent, on all moneys expended by the contractors. As in the other contract, military, &c., when on duty, and mads, arc to be carried free. The railways are to bo demised to the contractors for 99 years at the nominal rental of Is per mile, at the end of which term they become the property' of the Colony. The Government guarantee is 5A per cent, for 35 years, unless the lines are purchased earlier; but when the receipts arc above 5b per cent., the excess is to he first applied in recouping to the Government any sums paid for working expenses, with interest at oh per cent., and the balance divided a quarter to the Government, and three quarters to the contractors, until the Government are recouped all advances under their guarantee, with a like interest thereon, when the contractors are to take all the profits. The Government can purchase any line or section thereof before the expiration of 20 years, by giving 12 months’ notice, at cost p ice, after deducting for wear and tear. Mr Mackrell, who prepared the agreements for the General Government, shows in what manner the Colony obtains advantages which the Government of India failed to obtain. In India, the same contractors select their own lines of railway, and of course only those which are likely to he most remunerative to them ; they are under no restrictions as regards cost, any sum they expend being allowed by Government ; they pass their capital into the Indian Ire miry as fast as they think fit, and the Government pay 5 per cent interest from the time of such payment, paying out the moneys as wanted, but continuing tp pay jntere.-t; the railways aye granted to them for 99 years, and the Government have the right to buy them i p only at the expiration or the first 25 or oj years, when they have to repay to the companies the market value of all their capital, according to tho last three years average price of the stock or shares, taking o'-er all their property ; and lastly the companies have the privilege of relinquishing i heir undertaking at any time during the 99 years, in which case the Government have to pay their capital. The New Zealand Government have the absolute right of selection of the lines of railway, and m.y choose those best calculated to develop the resources of the colony irrespective of the question of immediate profit, nevertheless very properly taking upon themselves any risk of the railways not paying their working expenses whereas the Indian Government have no such advantage. The cost of the railways in New Zealand is limited to the liet prime cost, with a single addition of 5 per cent only fqr poqtraetoivs profits, whereas there is really no limitation as to cost in the Indian c,outrac,:s. xhp New Zealand Government may alter the lines during construction in any way that they may think fit, which is a privilege not accorded tho Government in the case of the Indian railways. The New Zealand Government may purchase at any time they think fit, under arrangement No 1, within 4(1 years, and Under arrangement No 2, within 20 years any of the railways, or any sections of any of the railways opened for traffic with the plant belonging thereto, and at the bare cost of the same, with 5 per cent, only for contractors’ profits, and with deductions in respect of any deterioration in value, wlu reo,s the Indian Government can onjy buy qp tfie, whole of a railway fvt certain stated periods of 2n and 50 years, c,ud have then to pay the full value pf all ’the 'stock or shares of the company, according to the average of the 3 preeeediug years, which, in the case of railways selected by promoters, will probably he at that distance of time at a very considerable premium. Moreover, tho railway companies can at any time relinquish their undertakings and call upon the Government to repay their capital. I think you may fairly congratulate yourself that your protracted and mo. t difficult negotiation with Messrs Hrogdeu and Sous has been brought to so satisfactory a tbyrnffiation, and tjhat {heye -fias been deposited by thciq securitco for. sum of £25,000 as a guarantee for The carrying out of the o ligations they have entered into, From the many questions raised by Messrs Drogdop from time to time, and from the extreme reluctance with which they concluded the arrangements, 1 must confess I doubted very much whether the contracts would have been completed and executed, and 1 cannot but feel that it was only owing to your excellent diplomacy that (although at the very last moment) the arrangements were brought to a satisfactory conclusion.