Warning On Road Tunnel Finances

Press, Volume CIV, Issue 30839, 26 August 1965, Page 1

Warning On Road Tunnel Finances

Unless there was more traffic through the tunnel there would be a big deficit in the year ending March 31, 1967, and the Government would have to be called on to meet its guarantee, Mr R. A. Witbrock, chairman of the Christchurch-Lyttelton Road Tunnel Authority, said yesterday.

Mr Witbrock gave this warning without, he said, criticising any other local body.

Now that from July the tunnel had to meet all costs, including interest, out of revenue from tolls, it needed 800,000 tons of cargo a year. Last year it had 57,000 tons and on this year’s figures, under the reduced charges, it would receive 200,000 to 250,000 tons.

All planning had been on the basis that an increased volume of cargo would be available to ro a d transport from the end of 1964 by new construction and reconstruction works at Lyttelton, Mr Witbrock said, but this had not yet materialised to any extent, through no fault of the authority.

Reviewing nearly three months of operations at the new toll rates, Mr Witbrock said that in June vehicle tolls showed an increase of 30.5 per cent, goods tolls an increase of 179.1 per cent, and total tolls an increase of 47 per cent. Last month there was a 25 per cent increase in vehicle tolls, goods tolls were up by 103.6 per cent, and the total increase was 34 per cent. Indications were that the increases would be maintained I this month.

“Objective Met" “It would seem that the adjustment to the goods toll has met the objective of attracting cargo available to road transport to be taken through the tunnel,” he continued. “This is all right as far as it goes, but this is by no means the final objective. “Our budget this year, based on increased use of the tunnel through the goods toll being adjusted, will provide 52.6 per cent of the revenue which must be reached for the (authority to meet operating [ expenses, interest, and repay[ment of loans. We may do I slightly better than this when the final figures are known al the end of next March." Mr Witbrock gave as the [full commitments for a normal operating year, operating expenses, £101,870: interest, £146.612; loan repayment, £36,500: a total of

£284,982. The income this year was estimated at £150,000, he said. This was on the lines of 52.6 per cent of ultimate commitments. It was only because interest had been charged to capital until now and that loans had not yet started to fall due for repayment that it had been possible to meet commitments. From last month the authority had to pay all costs, including interest, out of revenue from tolls. Commercial Use “As has been stated many times, it is only from increased commercial use that the additional revenue required can come,” Mr Witbrock said. “I remind you that this was the whole economic basis on which approval was given by the Government for the tunnel to be constructed. 1 also remind you that it was a Canterbury project backed by many organisations and public bodies which were anxious to sell a fully-operating road transport access port in existence to overcome the bottleneck of the Port Hills barrier which existed for many years. “The authority has discharged its immediate objective of constructing the tunnel and bringing it into operation. The final objective cannot be [ reached under the existing | conditions.”

' After referring to the planning being based on an assumption that there would be increased road transport from the port from the end of last year, Mr Witbrock said the authority’s interest and loan repayment commitments had been taken care of up to the end of March. 1966. “But the following year is the vital one when full operating costs and interest must be met from toll revenue for the full 12 months,” he said. “Failing which the Government will be called upon to meet its guarantee under the act establishing the authority. “For my part, and 1 am sure I speak for the whole authority, 1 have no desire to see this position arise. Canterbury has entered into a commitment and we are dutybound to see it honoured.”

Wharf Sheds “We know perfectly well that the sheds at Lyttelton are not operating.” Mr W. P. Glue said. “The Harbour Board is concerned, and is i making efforts to get them 'going. It is unfortunate, bid J there you are." “We anticipated this." said Mr F. W. Freeman. “With the roll-on. roll-off ferry coming on next year we are going to get more traffic." Mr Witbrock: Yes, but it will be only a small proportion of what we require. We are looking for 800.000 tons I of cargo. j The public were not fully | aware of the authority’s com linitments. Mr J. J. B. Connor said. “We have told them that we are up to our budget, and that our traffic is increasing, but we have not given them a proper appreciation of the long-term result. It is no fault of ours that we are not getting the tonnage anticipat-l ed." Mr L. G. Amos: Have youl some fear, or is this a' general warning? Mr Witbrock: 1 have no fear at all. Mr Amos: Do you seei things in a less optimistic light than 12 months ago? Mr Witbrock: We expected that the port would be fully

operating in 1964. On the present figures unless the port is fully operative we will have a deficit in 1967.

Coming Year On present commitments, the authority was “going along very well," Mr Witbrock said. With the reserves built up over the last two years it would be all right for the coming year But unless the additional cargo was received in the year to March. 1967. the authority would not be able to meet its commitments. It would show a verylarge deficit. “It is a pity we are not able to work the sheds at Cashin quay.” Mr Glue said. “The opinion of those working the sheds is that they are delighted with the whole set-up. But confidentially . . (Mr Glue then turned to the chairman and whispered.) When there was further discussion on harbour board works, Mr Witbrock intervened: “That is something that can be discussed in another place at another time”