Railways- Statement

Press, Volume XC, Issue 27434, 21 August 1954, Page 6

Railways- Statement

The most obvious, and probably the most satisfactory, feature of this 1 year's Bailways Statement by the i Minister (Mr Goosman) is that ’ financially the department has had - its best year since the end of the war. In five of the intervening eight years the department has i shown operating losses varying from £264,000 in 1946-47 to £1,102.000 in 1948-40 and £1,202,000 in 1951-52. . The last is the only loss shown under ’ the present Government’s adminisi tration. This year there is a useful I operating surplus of £404,000. Satisfaction with this improvement should be tempered by the know- ! ledge that a drop in the price of > fuel oil saved the department ; £574,000. Possibly the most ; important result of a working ; surplus will be the encouragement 1 to management and Staff to - increase the efficiency of a department that is now apparently finan1 dally liable The statement gives little evidence of any marked * progress in improving overall ( efficiency in the last year; and the Railways Commission has been overi cautious in dealing with uneconomic ■ branch lines. Nevertheless, the ! minor advances noted in some ■ directions are probably as much as . can be expected until the depart- ■ ment gets its modern rolling stock. ’ While this equipment will add to ; the total capital cost, on which the • department is not yet able to make reasonable interest payments, the J new investment will show a good ■ return for the extra money. Dieselelectric locomotives and modern ■ rail-ears will give the department j fresh opportunities of profitable and improved service. One aspect of railway operation that should not be overlooked is the profitability of the North Island main line and branches, where I a working surplus of £774,451 was , shown. No doubt the use of cheaper , oil fuel contributed to this; but other L factors are probably more important

The density of traffic in the South Island is only about half that in the North Island, the average South Island haul is much shorter, and in the South Island the proportion of goods tonnage carried at low rates, such as grain, lime, and coal, is higher. Attached to the statement is a special report from the commission on the differential rating system, which points out that freight on small articles of high value is a relatively minor cost, while freight can make the cost of cheap, bulk commodities prohibitive. The commission therefore argues fairly that transport of low-value bulk materials at low freight rates is vita] to the prosperity of the country. Almost half the tonnage carried by the railways last year was at rates below the average charge. The Minister and the commission advance this particular function of the railways as the chief reason why they are entitled to some protection from rpad transport, which is favourably placed to compete in the high-rate field and can ignore the low-rate field. This has been an accepted principle in New Zealand for more than 20 years, so that the reason for the emphasis at this stage is not clear, unless it is in the committee’s conclusion that railway transport and road transport should be regarded as complementary forms and not rival forms of transport. This may be preparing the ground for some new approach to . transport co-ordination. An up-to- . date examination of this matter i S Certainly overdue.