EXPENSIVE OMNIBUSES.

Auckland Star, Volume LVIII, Issue 135, 10 June 1927, Page 14

EXPENSIVE OMNIBUSES.

LOSS OF £39,118. TRAMS SHOW PROFIT OF £9005. OVER £21,000 SPENT IN REPAIRS. A net loss of £39,1 IS is shown in the accounts of the Tramways Department for the rear ended March 31, 1927. The loss was made on the operations of omnibuses, £45,124 being set down under this head, with a deduction of £9005 in respect of profits made on the operations of the tramways. The fixed charges of the undertaking, namely, interest and sinking fund, amount to £123.870. Interest on the tramways undertaking totals £53,765, and sinking fund £3.~>,Qt]6. In respect of omnibuses the interest totals £4197, and sinking fund £S3O.

The total amount of the accumulated sinking fund, with interest to March 31, amounts to £311,423, which is a direct set-off to the loan debt, amounting to £1,795.000. During the year the sum of £14,766 was debited to the tramways net revenue account, as the third instalment in liquidation of the deficiency in value of assets on the realisation of the Hobson Street power station. This was incurred in connection with the disposal of the city's electrical undertakings to the Auckland Power Board. In view of the position created by recent competition, the Tramways Committee recommended that the balance of this item, £28,522, be written otT in four equal amounts of £7353. More Maintenance Possible. Payments of £420 on account of street rent and Queen Street lighting, and £.)45S on account of rates, were met during tlie year. The committee recommended that in future the committee be relieved of payments in respect of the first mentioned items. During the year the sum of £17,095 was expended in permanent way maintenance. This figure was substantially lower than in previous years. It was, however, the maximum amount which the undertaking could carry. With the benefit of the increased fares for the current year more permanent way maintenance will be undertaken. Substantial amounts wore expended in the maintenance of rolling stock. Many of the trams ran ttO.OOO miles during the vcar.

Expenses Exceed Revenue. "As regards the omnibuses, it will be noted that the traffic expenses alone exceeded the revenue," the report states. "A sum of £21.407 19/7 was cxpenacu during the year in repairs and maintenance of the omnibuses, and it should be pointed out that this includes the cost of necessary alterations to meet the requirements of the now regulations issued by the Public Works Department. Practically the whole of this expenditure in bringing the rolling stock to the requirements of the Public Works Department was incurred in connection with omnibuses taken over from other concerns. The outstanding item in connection with the omnibuses account is that of depreciation, for which the sum of £11.401 18/ has been allowed. This represents \2\ per cent on tho value of the council's original fleet, and 33 l-3nl per cent for a period of five month' on the value of omnibuses taken over from other concerns.

Over-valued Buses. "It must be borne in mind that council is being required to take over omnibuses, not at the value placed upon them by council's valuers, but at a figure fixed by the court, and which figure is admittedly in excess of the actual value of the vehicles."

The committee is of the opinion, and the general manager eon;urs, that the amount allowed for depreciation is not too great. The question of financing the omnibus undertakings which the council has taken over 13 uncW consideration, and this matter will be reported upon shortly. The committee has most carefully considered the accounts, and is giving" the mo«t earnest consideration to possible economies and means of increasing revenue. It is already clear that the tramways undertaking can be placed in a thoroughly satisfactory position, both as regards public convenience and financial results. It is equally clear that in the case of the omnibuses the council is faced with great difficulties, due to the impossibility of giving the public the service it appears to demand at a fare it is prepared to pay. Power Board Profits. Mr. J. 15. Paterson taid the last paragraph of the report summed up the position pretty accurately. A dead loss of £48,000 had to be met. At the annual meeting of the Auckland Power Board, it was reported that a profit of £6-1,428 had been made. Mr. Paterson considered that the board ought to give a dividend to the public in the form of a reduction in the price charged for supplies. He had worked it out and found that the council took about a third of the power supplied by the board, and used it for traction purposes in connection with the tramways, so that about £18,928 profit had been received by the board from the council. Mr. Paterson thought the city should apply for some reduction in the cost of the power. Had the Power Board made a reduction, it would not have been necessary to increase tram fares. The sooner the council scrapped the buses, except those essential to the city area, the better it would be for the ratepayers, and the sooner the council would be able to make a reduction in tram fares.

Mr. L. A. Eady. speaking as a member of the Tramways Committee, said the report drew attention to the difficulties under which the committee had been labouring. It was q\iite obvious that it was not merely a question of management. The question had been complicated by the anomalous position which had been created hv reason of the rate* payers having to foot a heavy bill for the transportation of people from outside areas. It was a wonder that they would tolerate the position. Personally, he thought that the sooner the council transferred transportation to a metropolitan board the better it would be. Miss Melville thought a lot of money had been wasted on the buses. The fact that expenses could not be met, was a complete answer to those who suggested that the council should take on additional responsibilities in outside areas. However, buses inside the city area, would always have to be run, even though they "might not pay very well.

The council should cut out those buses that ran alongside tram routes, said Mr. W. H. Murray. He could never understand why the council should run buses in outer areas, thereby increasing their values, when those areas did not contribute a penny to the city's funds.

Mr. J. A. P. Allum. chairman of the committee, said that f the council would Hav% a little til , caoa^tt^e

within a few weeks would bring down something which would be of a definite nature, though it might not be generally popular. The report that had been placed before the council showed only a traction of what had been done. Till the committee presented the complete result of its efforts, a little latitude was asked. Mr. Allum explained that the Hobson Street plant was largely obsolete before it was sold, and after purchasing it, the Power Board had to write-off a loss. Answering Mr. Paterson's criticism, concerning Power Board charges, lie said the council was purchasing power under an agreement, which was, perhaps, of a nature that the council would not agree to to-day. The power was supplied at cost, and certain refunds had been made to the council.