NOTIONAL RAILWAY HAS COST £3/4M.

Press, Volume CIII, Issue 30480, 30 June 1964, Page 1

NOTIONAL RAILWAY HAS COST £3/4M.

Subsidy Now Double: Original Estimate

(From Our Own Reporter)

WELLINGTON, June 29.

The Nelson-Blenheim notional railway has cost £744,781 in subsidies since it was instituted nearly six years and a half ago.

The cost of this subsidy system paid by the taxpayer has more than doubled the amount originally estimated.

The rise began before the introduction of the rail-ferry Aramoana on July 11,'1962, but since then the payments to make up the differences between road and rail charges have climbed even more sharply.

When the notional railway system was introduced on November 4, 1957, it was estimated the scheme would cost £75,000 a year, made up of £BOOO for passengers and £67,000 for goods.

The Railways Department report for 1957-58, giving this figure, said: “It is possible the cost of the scheme will increase owing to increased traffic.”

In last year’s estimates. £125,000 was provided for notional railway subsidy, but the amount paid in the 12 months ended March 31, was £166,381. Noting this figure, this year’s estimates say: “Traffic exceeded estimates.” The amount allowed for this year’s notional railway subsidy is an unprecedented £l7o,ooo—an advance of £50.000 on the previous highest figure, and £95.000 more than the 1958 Railways Department estimate. Annual Cost The year-by-year cost of the notional railway has

been:—l9s7-58 (five months onlv) £31,000: 1958-59, £103,105; 1959-60, £101.183: 1960-61, £107,538; 1961-62 (estimated), £114,000: 196263, £121,574; 1963-64, £166,381. The notional railway system treats the main highway between Nelson and Blenheim as a railway, connected at Blenheim to the main system, and having points on its length (including Nelson) deemed as railway stations. Goods and parcels are accepted for carriage at rail rates based on continuous mileage by way of Blenheim between the “notional” railway stations and any real railway station in the South Island. Road Schedule The road operators carrying these goods are paid according to the schedule of road rates applying at the time. The subsidy arises from the fact that railway goods charges taper with distance —that is, they increase less than proportionately to the increase in the length Qf haul.

Over long distances, the cost of railway haulage falls sharply by comparison with road operation. Passengers on the “notional railway” pay rail fares, and the road operators are

subsidised the difference between these and normal road fares.

All passengers carried on the Nelson-Blenheim route are subsidised whether proceeding through to Christchurch, to Picton for the steamer, or on a purely local journey. The scheme was introduced by the Holland Government as a consolation prize for people at the northern end of the South Island for the loss of their hopes of rail connexion with the main South Island system.