Profit Held Possible For Nelson Railway

Press, Volume CIII, Issue 30568, 10 October 1964, Page 14

Profit Held Possible For Nelson Railway

With the advent of the second rail ferry, the establishment in Nelson of the motor-assembly works, prospects of a growing fish industry, a pulp mill and industrial expansion which would be stimulated by a new railway, Nelson should well exceed the 163,000 tons asked for and the Nelson railways should cover not only operating _ expenses but make a contribution to cover losses incurred on other lines, says Mr C. R. Gallagher, a member of the Nelson Progress League’s railway action committee, writing in the “Monthly Review.” Examining costs, Mr Gallagher saya steam power costs up to two and * half times the cost of diesel power. To assess the economics of the notional railway (road transport subsidised by the Railway Department) as against a physical railway, he asumes the use of DA diesel locomotives. Such a locomotive runs at 6s 9d a locomotive mile, he continues, and this includes shed expenses, sick and annual leave, subsidy for staff superannuation and wages, plus Is a locomotive mile with loadings for the guard. For the rail-car, the cost of a locomotive mile would amount to about 4s 6d. Mr Gallagher then presents the cost of a railway from Nelson to Blenheim over 48 miles by one route and 63 miles by another. He assumes four triple and one single return trip a week for goods trains and six return trips a week by a rail-car. On the first route he gives the annual cost as £66,500 and on the second as £76,500.

On 1963-64 figures, it could be assessed that the goods value was £245,600. Goods handled were general, 86,717 tons, timber, 183,657 super feet or 364} tons, stock moved 42,425 and passengers carried 52,000.

A physical railway would have operated at an operating profit of £179,100. “On the other hand, the notional railway, with a revenue of £245,600 and a subsidy of £163,600 paid out this year, shows an operating profit of only £82,000,” he said. On the most recent figures, goods traffic is up on 1963-64

figures—general by almost 20,000 tons, timber by 2500 super feet, passengers by more than 5000 and operating revenue by £17,700. The Minister of Railways (Mr McAlpine) had said that 163,000 tons was needed to recover operating costs, Mr Gallagher continues, and 900, 000 tons to recover interest costs. On the figures presented, physical costs would be recovered and a profit shown at the present load of less than 90,000 tons carried and 42,400 head of stock transported, plus 52,000 passengers.