INCREASED NET REVENUE

Press, Volume LXIX, Issue 20998, 28 October 1933, Page 25

INCREASED NET REVENUE

railways finance ANNUAL statement by the board review of operations ffrorn Our Parliamentary Reporter.] 1 WELLINGTON, October 27. A continued improvement in the net revenue position of the New Zealand Railways is shown by the annual stateent of the Government Railways Board which has been tabled in the House of Representatives. Net revenue increased £12,551. The event .e for the year was £6,034,403, as compared w lth £6,508,948 in the previous year, a decrease of £474,545. On the other hand, the expenditure was reduced by £487,096 to £5,183,859. The satisfactory "result on the expenditure side W as achieved by the statutory reductions in salaries and wag and by the careful and systematic pursuit of every practical means of economy, states the report. The statement reads: — "The past year has presented many difficulties in connexion with the department's operations, the principal factor, of course, being the prevailing depression in trade and industry. Notwithstanding this, however, the results obtained from the year's operations may be regarded as satisfactory when compared with the previous year's figures. The net revenue for the year was £850,544, as compared with f*837,993 for the previous year, an increase of £12,551. The net revenue has increased progressively over the last two years to an aggregate extent ot £161,817, equal Uo -3.50 per cent. "The improvement in the net results achieved over che last two years has been secured chiefly by the reductions which have been obtained in the expenditure. There is a definite limit to which this process can go, and having regard to what has been already done in this direction it will be recognised that further reductions in expenditure will be progressively difficult to obtain. ' The board will continue the policy o£ keeping costs d.,wn to the lovvest figure compatible with a , reasonable standard of service to the public and with due regard to the legitimate interests of its large staff. Ecvicw of Branch Lines. "In its report for last year the board stated that its policy was to take no action in the direction of closing nonpaying branch lines without the most patient consideration, and that it would aim to make its decision in each case in the light of the fullest information that could be obtained p.s to the traffic possibilities of each line. The board did not, however, delay the bringing into operation of economies that could be made in the working of the branch lines, and it took every practical step to stimulate traffic over the lines. The board is now able to report that its action has resulted in a certain measure of improvement in the net results obtained from tho / operation of several of the branch lines during the past year as compared with the previous year, and to that its policy has been Justified. T P e grand total of revenue from she branch lines showed a decline of £8427 on the previous year's figures. This represents a drop of 2.73 per cent, in the branch line revenue as compared with a drop of 7.29 per cent, in the revenue for the whole system. The total of expenditure on the branch lines showed a reduction of £65,148, or a 14.03 per cent, drop, as compared with a drop in expenditure over the whole system of 8.59 per cent. The operating loss on branch lines was £98,997, which, with interest £412,125 added, made a total loss of £512,122. The main line revenue from traffic to and from the branch lines, however, amounted to £418,988, or, in other words, the main line revenue from branch line traffic was £319,991 greater than the operating loss on the branch lines. It is not reasonable, however, to asume that the whole of this main line revenue would be lost to the department in respect of any such line that might be closed, for, no aoubt, the main line would hold on its own section a proportion of it. In the consideration of this problem the proPortion that would be retained can only be assessed according to the best judgment of the board as applied to ♦h f ircurnstan ces of each case, and ine board makes due allowance for this factor. Working' Patiently. "The board has felt that the improvements which have been achieved in the net results from the operation °i the branch lines still justify the policy which the board adopted of talcing no precipitate action on this question but of working patiently along the lines of endeavouring to secure the best possible net results before coming to judgments regarding the closing of lines. There are still some lines as to which there is a Prima facie case for closing'but for the I stated, as well as for the reason e ultimate development of comj, roa d traffic as it will be afby the operation of the Transport Licensing Act has a material on practically every case, the f o ,'*™ feels that some further patience well be exercised in the Si 2 °f the branch line situation, development of competitive road is very intimately connected »u ... e operation of the licensing ♦ntfl? e ? which have been constiArt lnl 1 ? r the Transport Licensing , • an d which have now commenced to function. At the risk of <sw , re P e tition the board cannot too JWy emphasise the responsibility var! , rests the people in the localities concerned to interest w? ve . s the transport problem, ):iS se boarcl must inevitably be in a £ mc * e d in its decision regardthf J? e branch lines by the attitude of , ® , peo Pl e themselves, and the board pvwi * e as affording very strong sire * ee . of . the sincerity of their de-hi-or, u ,? ust ify the retention of their ■ ne the steps which the people J I connexion with the licensing ■with ff. s , ery icos that are competitive \vhir.i branch lines and the support "Wh they accord their line. Commercial Activities. jj, J'ke year tor commercial activities tVm i been marked by any ameliorav \av» v, & dverse conditions which Thif ? een experienced for some years, the n resu lted in a stimulation on to <;< Fart var i°us transport services np<t . the maximum share of busier t ,°" er mg, and in the organisation nhio 5 Col pmercial branch much valuSMtment VlCe haS been given tho de " comw °f the efforts made by I trancS? i ve , servicea to secure the j inc tn dairy produce, it is pleas- ! bepn recor d that the department has Of tv*i sU< l ce i s / ul in retaining the bulk butt*. 8 The total tonnage of year . j obeese handled during the renre"^. er review was 241,703 tons, as ng , an . ln crease of 32,196 tons Ihs w ith the previous year. Pete y ? f I , road operators to comths ®" ccess£ uHy with the railway for from fi veyS L nceof seneral merchandise inepnt i n to country districts is conon their success in •EDerinnn s " lta ble back-loading, and nce bas shown that they are

generally prepared to accept traffic at very low rates rather than be forced to ran their vehicles empty on the return journey. In such circumstances dairy companies in many areas served by rail have at their disposal the alternative of road transport at rates which, in ordinary circumstances, must bo regarded as quite uneconomic. The serious decline in the market values of butter and cheese has impelled a numoer 01 these companies to seek means ot reducing transport costs, and in some cases it has been necessary to adjust our rates to meet them. This, it should be noted, is not a matter of the board 'cutting rates.' but in these 33 a P 01 *? of meeting the rates oi competitors in order to retain the „" SII I? SS of the department's customers, thereby holding traffic that had P^ V A? US y be S n carric d by rail. During the year the Government arranged with the board to reduce the freight charges on certain classes of primary per cent - the revenue department being reimbursed by the Government from the Consolidated Fund. Passenger Traffic. "A pleasing feature of the year's operations is the increase in ordinary passenger journeys as compared with the preceding year. This result may be ascribed very largely to the substantial reduction in return fares which became effective on September The increase in the number of ordinary passenger journeys during the year was 141,166, and, although this was not sufficient to meet the whole ox the loss of revenue involved in giving efleet to the reduction, the fact that a continued decrease in traffic | has been turned into a substantial in- | crease shows the wisdom of the policy I that was adopted by the board in the new scale of fares. Much has been done in special passenger business, an improvement of no less than •Jb7,OQ4 in the number of passengerjourneys dealt with in the year compared with the previous year indicates the gratifying measure ot success that has attended these efforts. Financial Statement. "On March 31, 1933, the capital invested in the lines open for traffic, including the steamers and plant on Lake Wakatipu and other subsidiary services, was di 51.480.949, as compared with £51,424,883 on March 31, 1932. "The additions to the capital account totalled £390,006, and comprised: Maintenance branch £72,878, chiefly in bridge strengthening and reconstruction; signals branch £20,750, in new telephone lines and extension of train control; Public Works Department £118,042, expended on Tawa Flat deviation; and £179,326, expended on the construction of new rolling stock and workshop machinery. "During the year loan moneys amounting to £334,930 were repaid to the capital account, of which amount £323,423 was provided from revenue on account of depreciation. The net addition to capital for the year was therefore £56,066. "The financial results of the operations for the year ended March 31, 1933, were as follows: Year ended Year ended March 31 March 31, 1933. 1932. £ £ Gross revenue ~ 6,034,403 6,508,948 Gross expenditure 5,183,859 5,670,955 Net revenue .. 850,544 837,993 Interest charges .. 2,230,655 2,221,465 Excess of interest charges over net revenue .. 1,380,111 1,383,472 Subsidiary Services. "The revenue from subsidiary services amounted to £695,328, as compared with £719,983 for the previous year, and an analysis of the figures is as fol-

Totals .. 350,105 369,302 476,687 Figures of Coal Supplies. "The average consumption of coal a week during the year ended March 31, 1933, was 6573 tons, which was a decrease of 524 tons a week, compared with the previous year, and 1754 tons- compared with the ' year ended March 31, 1931. A comparison of the purchases of New Zealand and imported fuel for eight years ended March 31, 1933, is as follows: New Zealand. Imported. Year. Tons. Tons. 1925-26 85,393 278,076 1926-27 .. 187,793 193,163 1927-28 .. 288,646 152,025 1928-29 .. 356,724 66,675 1929-30 .. 355,214 121,037 1930-31 .. 367,686 40,827 1931-32 ... 373,335 42,756 1932-33 338,005 "It will be noted that the purchases during the year were all in New Zealand coal. Ol* these purchases 221,831 tons were hard coal and 116,174 tons soft coal.

Workshops' Staff. "The total staff employed in workshops gradually rose, to keep pace with the volume of work offering, from 2754 on April 1, 1932, until the total reached 2927 In December, from which time the staff gradually fell until the number employed on March 31, 1933, was 2733, or 21 less than at the corresponding date of the previous year. The following tabulation shows the staff variation for the last eight years:

at March 31, 1933, including those on works chargeable to capital was 14,680, as compared with 14,930 for the previous year. The average number actually at work throughout the year was 14,696, as compared with 10,114 tho previous year. Of the average number of staff at work during the year 12,040 were permanent and 2640 were casual employees. The average number of men engaged on works chargeable to capital was 441 as compared with 738 during the previous year. During the year 138 members of the permanent staff resigned, 141 rotired on superannuation, 55 died, and 110 were dismissed or paid off. Thirty-eight employees were engaged. Twenty-one members of the second division were promoted to the first division."

For the current year it is anticipated that the revenue will reach £5,878,800, and the expenditure £5,157,938, In 1929 the net earnings were £1,898,592, the percentage of total working expenses to gross earnings 78.30, the percentage of net earnings to capital invested 3.45, the net railway operating earnings £1,150,285, the percentage of railway operating expenses to earning 84.71, the net operating earnings an average mile open £353, and the iet operating earnings a train-mile 24.84 d. . *

lows:— 1932-33 1931-32 1930-31 £.£.£. Lake Wakutipu steamers 7,864 8,013 9,166 Eel reshment service 81,890 89,020 120,563 Advertising service 33,614 39,312 49,941 D e p artmental dwellings 137,575 130,725 116,256 Leases of bookstails, etc. 16,224 17,022 20,022 Road motor services 78,644 72,740 103,348 Miscellaneous .. 339,517 354,345 370,853 Totals 695,328 719,983 790.140 "The particulars of the expenditure on the subsidiary services are as follows:— 1932-33 1931-32 1930-31 Lake Wakatipu <£< & J* steamers 8,200 10,008 14,064 Ref re shment service 77,892 86,335 116,506 Advertising service 29,937 36,414 48,692 D e p a rtmental dwellings 145,780 149,974 178,140 Leases of bookstalls, etc 10,167 10,820 9,804 Road motor services 78,12a 75,691 109,191

PermanTerm Emergent EmCaa- ■ Casency Year. ployees. uals. uals. Casuals. 1026 .. 2332 ' 494 087 16 1927 .. 2355 475 674 33 1928 .. 2241 389 053 44 1929 .. 2211 413 643 383 1030 .. 2330 461 064 761 1931 .. 2317 458 565 333 1932 2143 240 245 126 1933 .. 2084 221 224 204 General Staff. "The total number of staff employed

The following is a statement of the results of working for the last four years:— Year ended March 31, 1930. Particulars. 1933. 1932. 1931. Total miles open for traffic 3,315 3,315 3,322 3,287 Average miles open for year 3,315 3,315 3,303 3,287 Capital cost; of opened and unopened lines .. £59,228,894 £59,055,701 £68,679,025 £65,526,089 Capital cost; of open lines £51,480,949 £51,424,883 £60,545,154 £57,787,671 Capital cost per mile of £18,226 £17,581 open lines £15,530 £15,513 Gross earnings £6,034,403 £6,508,948 £7,571,537 £8,279,914 Working expenses £5,183,859 £5,670,955 £6,882,810 £7,358,859 Net earnings £850,544 £837,993 £688,727 £921,055 Interest charges £2,230,655 £2,221,465 £2,255,345 £2,132,324 Percentage of total working expenses to gross 85.91 87.13 90.90 earnings 88.88 Percentage of net earn1.61 ings to capital invested 1.65 1.64 1.16 Railway operating earn£7,473,993 ings £5,339,075 £5,788,985 £6,781,388 Railway operating ex£6,406,143 £6,848,026 penses £4,833,754 £3,301,653 Net railway operating £625;9G7 earnings £505,321 £487,312 £375,245 Percentage of railway operating expenses to 90.54 91.58 94.47 91.62 earning Operating earnings per £1,610 £1,746 £2,053 £2,274 average mile open Operating expenses per £1,458 £1,59!) £1,939 £2,083 average mile open Net operating earnings £152 £147 £114 ■ £191 per average mile open Operating earnings per 130.37d 136.63d 144.26d 149.21d train-mile Operating expenses per 118.03d 125.13d 136.28d 136.71d train-mile Net operating earnings 12.34d ll.SOd 7.98d 12.50d per train-mile Passengers, ordinary 0,870,570 6,503,566 7,288,674 8,498,441 Season tickets 437,775 459,063 600,440 667,432 Total passenger journeys 18,368,654 19,151,480 22,813,708 25,413,621 Goods tonnage 4,945,592 5,272,253 6,409,831 7,233,295 Live-stock tonnage 545,094 552,558 556,498 566,407 Train mileage 9,828,853 10,168,720 11,281,898 12,022,043 Engine mileage 13,205,878 13,845,966 15,618,776 16,735,624