RAILWAYS £432,743 DOWN

Sun (Auckland), Volume III, Issue 784, 3 October 1929, Page 12

RAILWAYS £432,743 DOWN

Minister Presents Annual Statement

UNPROFITABLE NEW LINES Attacking Problem of Costs I THE St'.VS Parliamentary Reporter) PARLIAMENT BLDGS., Today. THE railways last year lost £432.743, a sum which re->re-seuts £141,291 more than the previous year’s deficit The Minister of Railways, the Hon. W. B. Taverner, in his annual statement, attributes this increased loss largely to the unprofitable new lines recently taken over. In his accompanying report, submitted to the House ot' Representatives this afternoon, the General Manager of Railways, Mr. 11. 11. Sterling, explains the heavy deficit and deals extensively with the problem of running and operating costs.

The gross revenue received during the year March 31 last, the period which is covered iu the Minister’s Statement, was £5,249,535, and the credit attributed to developmental lines was £495,937, bringing the total revenue up to £8,747,975. The gross expenditure reached £6,549,353 and interest £2,331,335, a total expenditure of £9,150,715, leaving a deficit below revenue of £432,743. Passenger traffic, which realised £2,124,746, fell by £20,550 from the previous year, though freight receipts disclosed a gratifying increase of £165,990 over the previous 12 months, the sum received reaching £4,546,125. This increase in freight returns was produced almost entirely by the carriage of agricultural products, grain, butter, cheese, wool, agricultural lime, soft coal, road metal, benzine and artificial manures. Lire stock assisted in the increase, 560,311 head more being carried last year.

The increased expenditure of the department from £6,685,123 in 1928 to £6,849,383 in the year just finished was attributed by the Minister mainly to the maintenance of rolling stock and transportation. Renewals and overhead expenses in connection with the workshops reorganisation increased the rolling-stock maintenance, while the additional mileage of line taken over during the year raised the transport costs to a great extent. NOT PROFIT-MAKING

The Minister does not regard the heavy deficit as a direct loss to the Dominion. “The railways, in the first place, were undoubtedly constructed as a developmental institution rather than as a profit-making institution,” he says. “Indeed, it is scarcely possible to conceive that much of the mileage of the present railway- system, even of the main lines, would have been constructed at all if the question as to whether they should be gone on with or not had been decided on a profit-making basis. As the years have gone on this policy has been continued. Nor has it been confined to construction only; it has extended also to operations, and many services and tariff concessions have been given in the past on the basis of the developmental aspect of the railway- policy.

“It is beyond the possibility of question that the country has reaped very material indirect return from the existence of the railways. This return, however, has not been reflected in the annual Railway-s Statements. It is none the less real. The whole question resolves itself into one as to whether the time has arrived when the country- is paying through the deficit on account of the railway work too much for the indirect returns that it is getting. “If we take the passenger figures alone we find that as compared with pre-war the revenue is down some £600,000. Taking also the natural increase that took place in the department's passenger revenue prior to the advent of the road motor, we could confidently have expected that the passenger revenue alone, but for the influence of road motors, would have approximated to the amount of the present deficit, and the extra revemte would have been earned with comparatively small increase in expenditure. “The question therefore arises as to what proportion of the railway- deficit should be regarded as properly payable in respect to the developmental work of the railways. This obviously will depend on what the railways can be made to earn in the face of the fact that road-motor transport has now to be accepted as a permanent factor in the transport industry. “Before this can be determined it is essential that the respective spheres ot railways and road transport should be determined and the fullest possible measure of co-ordina-tion obtained. As matters are at present, it would be impossible to say with any degree of certainty what the railways are worth as a revenueearning institution. The first step clearly is so to regulate the transport industry that the true value of each method of transport can be made clear. NEW WORKS The Minister explains the Government’s decision to stop the Palmerston North deviation, and gives the assurance that all other works in hand by* the department for the current y*ear j will be carried through. As these j works are of great magnitude, the sum i required to carry’ them out has, as far as the present > T ear is concerned, absorbed all the money made available to the department fpr new works. This position is likely’ to continue for the next year«»or two. The Minister declines to establish a

programme ot works for some ahead, mainly- because ot Hoid’ changing conditions, but he is special attention this year t 0 methods of communication withi n ,2 department. The sum of £sl 000 4 being sp*ent upon train control system in the current year.

Improved time-tables and the «tesion of the night-train system are oetioned as receiving attention: and th« care of locomotives, and the progre<ot the renewal fund, are also dea:with by the Minister, who concludes his statement: —“The strictest economy consistent with proper efficient will be aimed at *o far as the intend working of the department is ecn cerned. As regards its eitenh relationship with other factors of the transport industry, it will be my po’j v to work to the fullest possible deyr;, in harmony with other forms of trine port, constantly endeavouring to giv, the fullest measure of usefulness t« the community- of the transport industry as a whole."

The general manager of railway Mr. H. H. Sterling, in dealing in A report with the railways deficit, er plains that no credit for loss trai received by the department for the Kirikopuni line, and the East Coas: Main Trunk section, which, had the, not been taken over, would hare «l lowed the railway-s accounts to shot t surplus of nearly £2.000,000 instead r: the loss already disclosed. From the viewpoint of operating revenue and expenditure, therefore, the man&geclaimed, the department has recorded substantial progress. RECOVERING LOST BUSINESS

With the continued decrease in pat senger traffic, which is dealt with ,i----tensiv- in another phase of the rt port, Mr. Sterling says the railwayi must look more and more to the gooda revenue for the major part of their r» ceipts. He sees three ways of rem*, dying the deficiency:—(l) A reduo tion in working expenses to produca cheaper transportation: (2) increased traffic to make good the loss; and (5) increased charges. So far as the first alternative is concerned a policy of constant review it being pursued. Hardly a day goes past, Mr. Sterling says, on which some aspect of the department's operatic 1 ', is not being modified and altered to secure reduced working expenses. The second provision is being attacked by improved facilities and the adoption of commercial methods for attracting rail-borne traffic. The third is the mos serious facing the department, insofar as motor transport already has cap tured most of the high-class goodß, an! the department would not achieve it? purpose by- raising the price of the lower class goods. The practice of allowing motor traffic to take all the high-class goods an! leave the lower-class goods to the railway is one which calls for the seri ous consideration of every member o: the community, Mr. Sterling says. Before increased rates could be discussed the amount of revenue that is likely to be derived from the increase had to be considered, he added, and also the amount of additional revenua that would be required. SAFETY AT CROSSINGS During the year the problem ot level crossings has continued to engage our attention, he went on. and the poli:" of progressive development in the protection of level crossings has been pursued. A few figures in connection with this work may be of interest. The department employs a total of 80 crossing-keepers at “ crossings, at an annual cost of £13,122of which £1,107 is recovered from local bodies. The expenditure on the elimination of crossings by overhead bridges or subways has been approximately £150,000. There have been warnin; bells installed at 54 crossings. “v>7 wag” signals at 32 crossings, and flash- | ing light signals at four crossings, at a total cost of £19,080. Every crossing has been provided with standard “Warning” notices at a cost of appro!--mately £26,000. The total expenditure on the protection of level crossings is in the vicirI ity of £195.080, of which amount the Highways Board has spent £13.": and the local bodies have . £24,000, and there have been minor amounts provided by other persons bodies, such as associations of mo ! The annual cost to the partment of the upkeep of warning - vices amounts to £3.880. Adding to the wages bill for the cross 1 keepers it will be seen that the T 1 ' ring expense to the departmen. * I these two aspects of its operation approximately- £16,000. _