RAILWAY STATEMENT

Hokitika Guardian, 26 August 1931, Page 2

RAILWAY STATEMENT

. (BY THE MINISTER OF RAILr &VAYS, THE HON.'W, A. VEITCH)

WELLINGTON, August 25.

Mr Speaker.—ln presenting tno Railways Stateme<nt for the year ended 31st. March, 1931, I have the honour to report that the gross income from all isources was £7,571,537, a decrease of £716,579 on that of the previous year, while the expenditure was £6,882,810, a decrease of £476,049. On the 31st. March, 1931, the capital invested in the lines open for traffic including the steaniers and plant on Lake Wakatipu and other • subsidiary services, was £60,545,154, as compared with £57,787,671 on the 31st. March 1930, an increase of £2,757,483. The increase in capital comprises £855,154, cost of the Eskdale-Putorino extension, 26 miles 74 chains, taken , over on the 6th. ■ October, 1930, and £559,012 expended out of the vote for additions to open lines,. This latter sum represents the provision of new rolling-stock, , grade-easements between Crichton and Lovell’s Flat, additional dwellings; improvements a,nd extensions to buildings and plant, workshop equipment, rearrangement of stationyards, and other facilities. Expenditure under the Railways Improvement Authorisation At’t, 1914, totalled £1,044,433. The ilOw Works carried out during the year included the completion of the new itatlon and . yard at Auckland, new goods-shed at Wellington, and reclamation for station-yard, Phpatoetoe - Papakura duplication, reconstruction and strengthening of bridges, completion of Ravensbourne-Burkes Deviation, telegraph and telephone lines, safety appliances, and train-control. A sum of £766,073 was charged against revenue for depreciation and provision of renewals, and the amount expended from this fund was £385,724 for assets- written off. The accumulated credit balance in the Renewals and Depreciation Fund at the 31st. March,. 1931, wa5;.:£2,067,910. During the year ended 31st. March, 1930, 'the cash' resources of the Railways Department were exhausted as a result; of the policy which required the Department to pay interest’.charges irrespective 'of the. fact' that the net earnings for the year were insufficient to -meet the total, interest debit.. . In order to meet. this . position a further amendment to the . financial.- arrangements of the Department was made, and' section 14 of the Finance Act;

1930 '(No. 2),’ authorizes the Minister

of i-Finance to .reduce the interest charges on capital where the annual

accounts of the Railways disclose that

the full amount of -interest cannot be paid out of tlie Working Railways Account. ' * ' ,J . ■> -5* / • ■

The Finance Act, 1929, section-20, provided, that,, interest will be charged on the total amount of capital moneys railways, Ye? duced by the... sum Yf £8,100,000. The interest charges -computed in terns of yinm*.lo29,- {total 25-3,345, as against £2,134,324 for the year ended 31st, March, 1930. 3jhe sum actually paid for interest for the past year is £685,000. TS? net earnings totalled £688,727, witch, amount -deducted from.the total interest charge of £2,255,345 leaves a deficit on the year’s operation of £l,>fK3>j6lß, an increase of £355,349 coml> "Tiyd with the figures for the previous year. . T

Compared with the previous ’ year, the net 'earnings,a decrease of '£240,530. Revenue decreased >. by £716,570. or 8.7 per cent., while exby £476,049, or 6.sper : cent., notwithstandiig an increase of £63,896 in the amount set aside to provide for depreciation and, renewals. ~

In comparing the net revenue for 1931 with the results of previous years it is necessary to make due allowance f-r the variations in enactments, regulations, and policy applying to tne finance of the Working Railways Account. It must also be borne in mind that since 1926 systematic ' provision lias been made for depreciation in a manner which has not been adopted by the majority of State railways in other parts of the Empire, and which prior to that year had not been adopted in New Zealand.

Variations such as those referred, to require to be taken into account in order that' deductions drawn from comparisons will be correct and reliable. During the year a comprehensive review of the train services was made, and decisions come to as are outlined in the General Manager’s, he port, which accompanies this Statement. The matt r was further reviewed by the Royal Commission which investigated certain aspects of the Department’s affairs during the year, and, generally speaking, the decisions that have been arrived at by the Department were- concurred iu.

Channels for economy in expenditure •were also fully explored in every direction dining the year, and the figures given above indicate, the very large measure of success that was achieved in that connection, and there is no doubt that an even, greater extent of reduction in the expenditure mighty have been achieved if the staff adjustments that were found, possible had been rigor us lv pursued regardless of any ether consideration than the reduction of expenditure within the Department. It was felt that, having regard to the general state oh the lab-our-market and to the very great dir-* tress that was likely to be occasioned if a sudden and extensive reduction of staff had been decided upon, a, steady process of more or less gradual reduction was justified, oven though the Department were involved in some expense in so doing.

Consideration of the financial results for the year would, of course, not he complete without reference to the very severe trade depression that has been experienced during the period under reviewed. For the first four months of the financial year the revenue held to about the same level a,s the previous year, but thereafter, as the trade depression intensified, the revenue dropped extremely rapidly. Services were, of course, adjusted as much as possible to the changing conditions, but it will be realized that in such a- business as a railway, with high proportion of fixed chairges, the scope for making reductions of expenditure in immediate sympathy with a sudden drop in business is extremely limited. Keeping this in mind, it will be appreciated that the very great reduction of expenditure that was achieved during the year represents more a permanent lowering of the production costs of the Department rather than a temporary adjustment to the sudden drop in business that has been the result of the present stringent business conditions. In other words, so far as the financial position has been within the control of the Department—and this has particular inference to the expenditure side—the record of what was accomplished during the year stands out as a credit to the administration, while it must be equally recognised that the phenomenal drop of gross revenue which brought abolit the shrinkage in the lifet revenue was Undoubtedly due to Conditions which are affecting practically every other business in common with the railways, and which are quite beyond the control of the railway administration.

The Royal Commission, in. pursuance of its, order of reference, undertook a review of the railway tariff/' and recommended a number of alterations therein, the principal of which were adopted as follows: Ordinary passenger fares increased by Jd in the shilling or part of a shilling, holiday excursion and season tickets increased by Id in the shilling or part of a shilling, the scale of workers’ weekly tickets increased, and a number of minor amendments made to other classes of tickets. A number of the classified .rates for commodities such as coal, grain, firewood, bricks, &c., were increased by 10 per cent., and the rates for fresh fruit and vegetables were also increased by approximately 10 per cent. The practice of charging a higher rate for certain imported commodities was discontinued and the classification of such lines was amended in conformity with the recommendation of the Roval Commission. HAWKES BAY EARTHQUAKE. I desire to place on record the Government’s appreciation of the achievement accomplished by all -ranks of the Service in meeting a difficult situation following the disastrous earthquake which occurred in the Hawkes Bay district on the 3rd, February. The resources of the Department were placed entirely at the disposal of the roTi-lf orjffiniftaTibii witlfAhT’'charge, and the expeditious manner in which the perronnent-way was repaired enabled t!i® Department to facilitate the removal of refugees from the' stricken area, and at the same time convey foodstuffs and other important necessities which were urgently required inthis area. The cost of these services to the Department has been assessed at £23,000. On the other hand, the Department, like all others in the earthquake area, suffered considerable damage to its property, the value of which has been estimated at. approximately £55,400. The line between .Napier amd Putorino suffered most ■severely, and, in view of the extent to which the country through which the., line pas«es was shattered bv the earthquake, it is difficult to make an accurate assessment of the cost of restoring the . line, and it is quite possible that the figure given above may be substantialy exceeded before a full restoration of ordinary working-conditibns is again reached. •

BRANCH LTNES AND ISOLATED SECTIONS.

The loss on branch lines and isolated sections was £780,299, a'-s compared with £761,091 for the previous year. These figures include interest charges. On branch lines the loss of working, exclusive of feeder value and interest charges, was £203,604, as compared .with £218,483 in the previous year. Interest charges increased from £475,717 in 1930 to £465,512 in 1931, due to the Fskdale-Putorino extension being taken over on the 6th. October, 1930. The revenue-on branch lines decreased by £31,697, or \ 5.1 per cent. The working of the isolated sections, Ttaiihu, Gisborne, Nelson, and Picton resulted 'in a loss of £39,131, as .compared’ with £35,649 in the previous year. These figures exclude interest charges. The increased loss is due to the heavy decline in traffic on these -sections, which in the case of the Gisborne and Nelson Sections amounted to 21 per cent. and. 22 per cent, respectively. Substantial economies were made in the operating of these- sections, hut the effect of these was not felt until a fair proportion of the financial year had passed. Further reductions have since been made in the service® on these sections, on account of the decreased traffic and also in an endeavour to reduce the expenditure to a. minimum. COAL-SUPPLTES.

During the year the policy of utilising as large a pronortiou of New Zealan coal as possible was steadily pursued, and the result- is shown in the fact that the proportion of New Zealand coal rose to the record figu r e of 90 per cuit. It must be frankly admitted that on a basis of strict economy th°' Department would have been justified in preferring imported coal to some of the New Zealand coal at the prices at which the respective supplies could be othained, and it will

be appreciated that not only from the point of view of the high proportion of New Zealand coal that has been used, but also because of the circumstance I have mentioned, the policy of the Railways Department, as above mentioned, has been of very great benefit to the mining industry 'in the Dominion. The past year has been a difficult one in dealing with coal-purchases, owing to the heavy decrease in traffic necessitating a reduction in our requirements. The Hikurangi Mine was flooded on thf 29th July, 1930, and did not recommence operations again until January, 1931. DANGER COMBUSTION APPLIANCE. During the year tests were carried out with the Langer combustion apliance with a view to enabling a more (extensive use to be made of run-of-the-mine New Zealand hard coals and of New Zealand soft coals more particularly—in the case of the soft coals—during tne. summer months when such coals cannot He used on account of sparks. The tests which were carried out by the representative of the vendors of this appliance lin association with the officers of the Departments of Railways and of Scientific and Industrial Research gave results which indicated that very substantial advantages could be obtained by the use of the appliance. With a view to proceeding further with tests under ordinary running-con-ditions, it was decided to purchase twenty sets of this appliance. The sets have now come to hand, and ten sets have been fitted to locomotives in the North 'lsland and ten sets are being fitted to locomotives in the South Island. Tests of the appliance under general working-conditions are now in progress. BRIDGE-STRENGTHENING. During 1929 a comprehensive survey of the bridges throughout the Dominion was made, and a programme of bridgestrengthening a'nd reconstruction work extending over five years was drawn up. The estimated cost of the fiveyear proposal for strengthening and reconstruction was £521,000, and satisfactory progress has been made with the work during the past year. The provision of new bridges at Ngaruawahia, Waikanae, Otaki, Oroua and Whenuakura has been completed. A number of small bridges on the r l hames and Rotorua Branches and the North Auckland line have been rebuilt and on the North Island main line and branches a number of bridges have had a new superstructure of rolled-steel joists provided and in the case of others the floor-beams have been strengthened. ELECTRIFICATION, WELLINGTON'-P-AEIv A'lv AiR I Ivl. In connection with the construction of the new line between Wellington and Tawa Flat- the question of the tractive power to be utilized on this section called for con rid-ration. The longer of the two tunnels by this route will be 2 miles 53 chains long, and the standard of transport service now d> ! manded by the public renders it a piactical impossibility to work such a length of tunnel by steam with any reasonable prospect of ensuring the public satisfaction. It is practically unavoidable, therefore, to adopt electric traction for this section of the line,

AUCKLAND NEW STATION. The new station at Auckland was officially opened on the 24th November, 1930, and, notwithstanding the complicated nature of the working of th:s station, the staff are to be complimented for the manner in which they so readily "and"‘efficiently ' 'adapted, themselves to the new conditions, The original estimate, including the station-yard, as set in D,—-2A, 1924, was £550,000, exclusive of £325459 -cost of the reclamation of the site /'or the yard and buildings, and work : performed in connection with the eivc- ! tion of and alterations at the locomotive depot prior to 1924. The actual cost o" the work at 31st March, 1931, was £1,230,645, which includes the sta- ! tion-buildings,‘ construction of yard, ' goods-sheds, interlocking and signalling, etc. AUCKLAND-WESTFIEhD DM VTA TION. The completion of this work synchronized with the completion of the Auckland Station. The estimated cost of this work in the 1924 I).—2A was £450,000. The final cost to complete amounts to £770,000. GAiRRATT LOCOMOTIVES. I have to record the fact that the three Garratt locomotives! which were impolite <i into New Zealand had notshown up to the end of the financial I year any' marked improvement in mechanical reliability, but that since then [ it has been seen that the modifications j made to two of these engines have made ' them fit for regular service. Unfortu-liate-y, the falling off in traffic dining recent 1 months has mitigated against their being loaded to their full capacity, and it has therefore been impossible to take advantage of their maximum potentiality. ! The foregoing charges do not include modifications and repairs to one of these locomotives —viz., “G‘ 99—now being undertaken at Hutt shops. It is estimated that the charges in respect to this engine will be £4OO for modifications and £1,400 for repairs.

The matter of the continued operation of the Garrett engines has been carefully considered, and it has been decided, in view of the expenditure that has already been incurred, to continue working them for a further period of, -say, twelve months with a view to giving them a thorough try-out, and more particularly in order to ascertain to what extend the latest modifications improve the operating results. CONCLUSION. As the direct responsibility of administration of the Department will in future devolve upon the Board,'! desire to take this opportunity of placing on record my personal appreciation of and gratitude to all members of the Service for their co-op-'vatlon in the conduct of the various phases of the Department s operations during a period of unparalleled difficulty. Considering the climatic and geographical conditions in New Zealand, which vitally affect, the running of our trains, it is highly creditable that the Service has been able to maintain a safe and reliable means of transport throughout the country for so many years.

| The unwavering efficiency and devotion to duty of the entire staff which, although called upon to make sacrifices iti common with all other sections of the people, ik the chief hope for the future success of the Department. These factors will prove to be tile mainstay of the Board in its difficult task of directing the Service in the interests of the people as a whole and at the same time stabilizing the railway finances. I would also like to take this opportunity of acknowledging the assistance which as Minister of Railways I I have received from members of Parliament. The full and constructive criticism which has been forthcoming has materially helped in the administration of this important Department of State.