NELSON FERRY SERVICE

Press, Volume LXXXVIII, Issue 26636, 23 January 1952, Page 8

NELSON FERRY SERVICE

REASONS GIVEN FOR SUSPENSION EVIDENCE TO COMMITTEE OF INQUIRY (New Zealand Press Association) NELSON, January 22. In the year ended September 30,1951, the Anchor Shipping Company made a loss of £32,516 on the operation of the Nelson-Wellington passenger service. This brought the total loss for a period of four years and a half to £62,060. The last year in which a profit was made was in 1947-48 when the figure was £10,051. These figures were given this afternoon by Mr S. Cannington, manager of the Anchor Company, in evidence before the committee of inquiry into the Nelson-Wellington ferry service. The committee was set up under the Transport Act to hear representations and to suggest ways and means of enabling the ferry service to be maintained on a self-supporting basis. The Anchor Company announced at the end of November that its passenger service between the North and South Islands would be abandoned immediately after the Easter holidays in April, when the Ngaio would be withdrawn. The committee comprises Messrs G. H. Smith, Assistant Commissioner of Transport (chairman), K. McLeay, presiuent of the New Zealand Shipowners’ Federation, and G. R. McKellar, general manager of Buxtons, Ltd., Nelson, representing the users of the service.

Mr I. L. Tyler, deputy-chairman of the Buller County Council, said in evidence this morning that he estimated that 220 persons from the West Coast used the Nelson-Wellington passenger ferry each month. Additional costs and delays would be involved by use of the Lyttelton or Picton routes. , ~ Evidence on behalf of local bodies and organisations in the Golden Bay district was given by Mt L. Manson, chairman of the Takaka County Council. Because of local geographical features, Takaka was severely isolated from the main lines of communications, he said. The condition of the Puramahoi aerodrome had been the main cause of the abandonment of a regular air service between Takaka and Nelson, and this had increased the isolation of the district. Company’s Submissions Passenger vessels could not operate solely as such, and had to depend on other revenue from freights and mails, or some form of subsidy, said Mr A. R. Dyson, managing director of the Anchor Company. The inter-island passenger vessels had to maintain timetable services although the weather might prevent cargo from being handled, and although the passenger load was far from economic. “We wish to emphasise that we have never requested nor even suggested that the Government should assist us in any way in the passenger service.” said Mr Dyson. “We purchased the Ngaio in good faith to fulfil what we considered was our obligation to the travelling public. “We realised we could expect very little in profits, but unfortunately could not foresee the circumstances that have contributed to the heavy losses—the large staff, the heavy increase in fuel costs, the decrease in the passenger trade, the effects of the waterfront strike, the general increased cost of operation, the loss of cargo to the air, and inability to work adequate cargo at Wellington. “We consider we can best serve the district by concentrating our resources on the freight service. We are quite satisfied that any attempt to continue the sea service, either on the present lines, or by the building of two new vessels, will be economically unsound, and that other avenues of handling the passenger traffic should be explored.” Fewer Passengers Carried Mr Dyson continued: “No doubt the National Airways Corporation has plans to meet the demand that will arise when the Ngaio withdraws. Travel by way of Picton to Wellington can be covered in seven to eight hours. It gives us no pleasure to withdraw ■from a trade that we have been associated with for so long, but we are not in a position to continue to carry the present heavy losses, with no indication of an improvement.” A schedule produced by Mr Dyson showed that passenger traffic had declined since 1945-46, when 71,436 passengers were carried. The yearly flg£r^si!?f e 1944 were H 438: 70,602; 64 > 83< ; 58,994; 59,616; 56,973; and 00,944.

, Mr Dyson said the marked drop in 1951 was attributed to the waterfront strike. It was fair to assume that, under normal conditions, about 45,000 to 50,000 passengers would have been Durin « the last year, about 1500 cars, accompanied by passengers, had been carried each way. Replying to Mr V. W. Fletcher, who appeared for the Nelson Chamber of Commerce, Mr Dyson said his company had applied to the Price Tribunal for increased fares in February, 1951, granted S °, Ught had granted. That had only gone about cncta W !L t ?y ards mee ting increased costs, and the company had hoped to n^been‘possible ° n had ca “ s e of the present situation D £ son 1, 2 st , ed the inability to work St a „ de<!Uately at Wellington as the p riP a r y reason, with the high cost of fuel in second place. T v Uo»s«s on Service thl” / n evidence, Mr Cannington gave the following returns for individual vessels on the Nelson-Wellington serli5L^ Unng <- the four years and a half ended on September 30, 1951: Ngaio loss of £54,192; Ma tai, loss of £2O 313to« ta T£&T flt of £12 ’ 758: Arahura ’- £% sa J d th u e proflt on the Matangi would have been more than absorbed but for the fact that, because of her impending withdrawal, the Matangi (11*1949-50 nderg ° ne “ normal overhaul

. In the eight months and a half durw.blch,Ah n e^ gaio was in commis«on 1950-51, running costs had Ovorha j^ 110 ’ 365, Or £12 > 984 a month. Overhaul, insurance and depreciation , £43 ’ 924 ’ ° r £5167 a month. The total expenditure for the period monism YV £154 ’ 2 89. or £18.151 a month. Total revenue for the period with £ t 121 ,’7 73 ’- or , £14 ’ 326 a month. Without allowing for interest on capital, this gave a loss of £32,516. ■rhe public had the impression that the company was a particularly prosperous concern, said Mr Cannington, trih,^ nn ? th £ las i! years - the distribution to shareholders averaged 21 per cent., of which .8 per cent, came from reserves. It would be uneconomical to build two new vessels of the most suitable Y pe J°, proyid ? a nightly service for the Nelson-Wellington run, continued Mr Cannington. “Any investment made in new vessels to be warranted as economically sound and self-supporting, must be oh the understanding that the passenger sea trade would improve and definitely not decrease for at least the next 25 years, and that the financial return to the providers of the capital will be such as will meet the capital loss that will result when the vessels are obsolete, he said. Estimates of the revenue and expenditure for two motor-vessels of 1600 I2 n s gross eac h had been prepared, Mr Cannington added. The estimated cost of each would be £400,000. The expenditure would be p 288 ’ ’ 28 ®nd the estimated revenue £233,125, giving a loss of £53,603. Includmg a return of 5 per cent, on cap£142833 tOtal deficiency would be The inquiry will continue to-morrow.