Public Works Statement.

Thames Star, Volume XI, Issue 3625, 9 August 1880, Page 2

Public Works Statement.

WOEKINO BAILWAYS

During the recess the management of working railways has been the subject of inquiry by the Royal Commission appointed by the Governor to report on the Civil Service of the colony, and also to some extent by the Royal Commissioners on railways. The efforts of the department were directed to greater economy in the system of railway management by working with a smaller staff of officers and men, and by reducing the number of trains and the speed at which they were run."' The train service has been reduced by 37,000 miles a year, the staff has been reduced by 266 men, and it is estimated that these and other economies which

have up to the present time been effected will save in one year upwards of £44,000. Serious and constant attention is still being given to economised charges, and I am satisfied that working expenses will be much further reduced. lam sorry to say for the nine months ending the 31st March the railways only gave us a return equal to slightly under 2f- per cent, per annum, while the rate of interest we have to pay is over 5 per cent. The loss on the cost of lines which stands at £8,629,402 was at the rate of £237,730 per annum, and had to be furnished from ! taxation. In the prosperous years j through which we have just passed we did • not seriously regard the railway deficit, I but thought only of the immense ad van- ' tages of railways in settling and develop- i ing the resources of the country. We pointed to these advantages as justifying expenditure, and spoke of our railways as remunerative undertakings, whether they contributed interest on their cost or not. The failure to obtain a greater direct return from our railways, such as is looked for -in ordinary commercial enterprises, is no doubt mainly attributable to the smallness of our population. We are still a small community, and are scattered over a wide extent of country. In Great Britain there is one mile of railway to about 2000 inhabitants, while in New Zealand there is one mile to 406. For every mile in Victoria there are 108 per cent, more customers than we have ; in the United States they have 43 per cent.; in Canada, 53 per cant.; in New South Wales, 148 per cent.; iv Great Britain, 383 per cent.; and in France, 614 per cent, more people per mile than in New Zealand. If this contrast with other countries were confined to the South Island, which contains by far the largest proportion' of our railways, it would show the disproportion still more forcibly; for, instead of having 406 people per mile—which is the average for the colony—the South Island has only 330 people per mile. Our average receipts, per mile of railway last year, were £648, while in England they amount to £3485 ; yet, even with these comparatively large receipts, the railway dividends declared in England only average 4$ per cent, per annum. I adopt the opinion expressed by Mr Gladstone when, discussing the best means of making the Metropolitan District Railway pay, he said that'" as a rule, the State, or individual, or company thrives which dives deepest down into the mass of community and adapts its arrangements to the wants of the greatest number." But our population is, as I have already said, so small and so sparsley settled that rule.i of this kind just quoted hare amongst us only a limited application. The tonnage carried on our bur lines com* pares favourably with the neighbouring colonies. Our principal railways are on the East Coast, and we are restricted in our tariffs by the competition of water carriage. On the island railways, too, the tariffs are at present more strictly limited than they would usually be, because of the cheapness of horse feed and the competition of ordinary vehicles. Even if this were not so, I should not in any case advocate excessive high rates. It will take time to develop the true system of tariffs adapted to our circumstances. Our efforts must necessarily be carefully made and constantly watched. Bail way rates that are only designed to bring 5 per cent, on the cost surely cannot be considered high.

SHOULD WB SELL OT7B BAILWJLTB. No doubt if we ould find a purchaser for them at cost price they should seem to present an easy solution of the difficulty. It is a suggestion that might have been expected, and has at least the marit of exceeding simplicity. I fear the proposed solution will not help vi much. It is clear that no company would buy out the lines, except at a price calculated to yield at least the current rate of interest which, at least at present, may be stated at from 7to 10 per cent. If, therefore, we seek to sell our railways, which are now paying only 5Jj per cent interest, we shall have to accept for them a sum representing only a portion of their cost. Probably we should hare to face a loss of millions, of money, and certainly we should still be liable for the payment of the whole of the interest as at present, while we should abandon all chance of retrieving our position by improved management and forfeit for the railway system the advantages of increased population and growing industries of the colony. I feel quite sure that it will never be necessary to accept this alternative, for I believe, that careful and intelligent management, and the natural growth of traffic, will yet make our railways commercially successful.

THE PEOGEAMMB OF CONSTRUCTION. The estimated cost beyond the present liabilities of completing the lines of railway, authorised by Parliament is £6,666,200. That being the case, it becomes sufficiently apparent that we must greatly modify our scheme of railway construction, postponing some important parts of it until population and settlement have largely increased, and until the railways already constructed hare become more nearly self-supporting. We have not the funds necessary to complete at present, nor will the ordinary revenue bear the increased demand which every additional mile of railway makes on it for yearly loss in working. We have no alternative, therefore, but to confine our operations to the extension of some of the incomplete lines to such nearest points as will bring them into use, and as tar as possible make the expenditure already incurred to some extent reproductive. Of the amount voted last year for public works, no less a sum than £2,356,729 was for actual liabilities, which we found in existence, and further expenditure to a considerable amount was made necessary by these liabilities. Realising the position of the Public Works Fund, we have endeavored to minimise the expenditure, and to spread it over as large a space of time as possible. We have stopped many new works, even after contracts had been prepared by the department, and tenders received. In his Financial Statement, the Colonial Treasurer showed that the total ways and means, on the 31st of March last, was £3,261,410, and that the liabilities of the Public Worka Fund, on the same date, amounted to £1,122,860, on 31st of March, 1880, clear of liabilities, Since that time, the liabilities have increased, and we have now £821,923, as available balance on the 31st of July. „ The new works and services, the estimates of which 1 am about to submit, make a further demand on this balance of £674,238, leaving £247,685 only for future appropriation from the Publio Works funds. Bearing in mind the importance of spreading the expenditure of the balance of the loan over the next two years, we should have preferred to ask for the appropriation of « much

smaller sum, but we have not found it possible to do so. The votes for various works which we now propose are designed to provide for expenditure up to the 30th June, 1881. After that date, and until we are again in a position to become borrowers, the only sources whence we can draw supplies for these purposes will be a portion of the proceeds of land sales, and the saving from estimates for the purchase of native land, a saving which we have reason to believe may be considerable, but which, at present, it is impossible to estimate. Railways.—The question of the pro* priety of constructing the WaikatoThames Railway has been raised by the Railway Commissioners, who have recom* mended it should at present be completed only to the junction with the proposed Cambridge line, and that the Cambridge section of eleven miles should be substituted. Government intend to have the subject very carefully investigated, with a view to determine which proposal will be most beneficial to the country, and will act accordingly. The vote will therefore be proposed in the alternative. [Mr Oliver then stated in detail the works to be gone on with in the southern portion of the North Island, and in Otago and Canterbury.]