THE RAILWAY PROBLEM

Hokitika Guardian, 23 December 1927, Page 4

THE RAILWAY PROBLEM

NEED FOR IMMEDIATE SURVEY GOVERNMENT DEEPLY CONCERNED. (Taxpayer.) A little while ago—wli.en Parliament was still in session—the Prime Minis ter. in his capacity of Minister foi Railways, stated that the Governmeni was deeply concerned by the problems of the State transport services and proposed to make a comprehensive survey of the whole position during the recess. The purpose of this survey, .Mr Coates explained, would not be merely to find means of meeting the existing c ompetition,, but more particularly to

ascertain as nearly as possible what would he the future needs in regard to construction. Another purpose of the survey, it was indicated, would be to determine whether or not operations on certain branch lines should be continued. These proposals have been warmly suported by the president of the Wellington Chamber of Commerce, who would entrust the necessary investigation to a Royal Commission free from all party and parochial influence, and

there is a wide-spread feeling among observant people that this great national problem should be seriously faced at the earliest possible moment. The Dominion lias spent millions of pounds upon railways, which to-day are not paying as much as one per cent upon the money borrowed for their construction. Confronted by facts of this kind it clearly is the duty of the Government to determine quickly what is to be done to place the State transport services uwon a sound business footing. VIE AYS OF FINANCE MINISTER. That the Minister of Finance, as well as the Prime Alinister, realises the difficulties and the needs of the situation

| may be judged from a statement ' made in the House of Representatives • during the concluding days of the recent session. “So long ns money for railway development was called for,” ! the published summary of his remarks ! ran; “ then it was imperative that money must be borrowed. . . He admitted that the question whether or not railways were a wise method of | public expenditure was a problem that ! was becoming increasingly open to criticism, because the indication in New Zealand, Australia, England and elsewhere seemed to show that it was questionable whether railways were not going to be out of date as a method of transport. . . He agreed that the further the railways were extended the more they increased the burden of the taxpayers. . . From an ccononitc point of view it would be better in th§ case of some railway lines to close them

down and pay interest on their construction rather than pay heavy operating costs.” In view of these franK statements from so high an authority it will be interesting to glance briefly at the country’s present commitments in regard to railway construction, remembering that many of the present Government’s obligations in this respect are legacies from its predecessors in office.

GROWING COSTS. In the Public Works Statement for the year ended March 31, 1927, it was stated that £7,464,784 had been spent upon railways under construction and

that £13,607,518 would Ire required for their completion. It was expected that of these lines 157 miles would be ready to band over to the Railway Department within one year and a further 27 miles within two years, leaving many more miles in different sections to be handed over at more remote periods. In tnese circumstances the Government well may ask itself if it is sound business to continue spending millions a year upon railway construction while the motor is revolutionising the whole system of transport. Can it state definitely, for instance, that such lines as the Xapier-Gisbornc. Glenhope-lnangn-hu, Whnramii-Parnasslis and similar

extensions, will pay the cost of maintenance and running—without taking interest charges into account at- all—when competing with motor cars and motor lorries, and even cheaper methods of transport ? Five years ago it was estimated that the lines then in course of construction when handed over to the Railway Department would just about pay operating costs and interest on the capital expended. This, it is safe to assume, was a sanguine computation. Someone had to ho excused for the initiation of these works. What then will lie the position with higher wages, higher cost of material, higher rates of interest, and largely increased and fully established competition? SOME EXAMPLES.

The answer to this question so far as the cost of construction is concerned, may be indicated without much difficulty. In 1923 the Xapier-Wairoa line was estimated to cost £1,783,606, and at that time £263,663 had been spent on the work. Since 1923 an additional £509,615 has been spent and it is estimated that a further £1,200,000 will he required to carry the line to completion. Here is an increase of £189.615 upon the original estimate, with a corresponding increase in the annual payment of interest, a sum suflicien tly large to accentuate the much larger loss through legitimate competition. Then take the Glenhope-Tnangahu line. The estimated cost of this line in 1923 was £1,363,341. The sum of £376,417 has been spent in the construction of

1 miles of the track and it is now estimated that an additional £1,600,09b will be required for its completion, an increase, upon the original estimate, that is of £613,076. Again, the Wliar-

anui-Parnassus line was estimated in 1923 to cost £2,000.006, and since then £44,280 has been spent upon its construction ; but now it is stated that £2,300.000 or £300,000 more than the estimate of four years ago is required for its completion. Costs have gone up everywhere, and ol course for this development neither the engineers nor tne Government are to blame. COMPETITION.

It is scarcely necessary to say that the development of the motor during the past four or live years is largely responsible for the accumulating troubles of the Railway Department, before the war it was only here and there and under exceptional < ireumstancos that the motor and the horsewaggon could compete with the railnays. To-day the motor call do almost anything in the way ol transport tinrailways cannot attempt. .Simply a new force in the social and industrial uurld litis arisen. Hence the problem that is confronting the Prime Minister

and his colleagues. However they may set about (lie solution of this problem it will lie their plain duly to see that the country is not burdened with another mile ol obviously unprofitable railway ((instruction. 'I he Government may find a way out of its difficulties ill this respect by a wide extension of its motor services. The State, having spent nearly sixty millions upon railway construction js entitled to supplement its assistance to settlement by providing other means of transport on a strictly business basis. Its competition with existing private services, however, must he on legitimate linos. There must he no insensate waste oi public money nor any unfair opposition to private enterprise.