“Duplication Of Rail Service”

Press, Volume CVI, Issue 31152, 31 August 1966, Page 14

“Duplication Of Rail Service”

If the application for a South Island motor-vehicle transporter service was to succeed, it would mean an unnecessary duplication of existing rail services, the No. 9 Transport Licensing Authority (Mr J. S. Haywood) was told yesterday.

Percy Patrick Geddes, chief administrative officer for the Railways Department, Wellington, was giving evidence against the application, which has been made by E. H. Boyce and Company, Ltd., Christchurch (Mr H. W. Hunter), for an amendment to a continuous goods service licence by the addition of 12 vehicle authorities.

The company, which is also seeking exemption from rail restriction, is being opposed by the Railways Department (Mr F. D. Daly), Transport (Nelson), Ltd. (Mr G. S. Brockett), and McLennan’s Transport, Ltd., Blenheim (Mr R. Stacey), Car Haulaways (N.Z.), Ltd.. Auckland and Wellington, has been granted observer status.

On Monday, after submissions from objectors that the application should be dismissed, the authority ruled that a prima facie case had been established. About 16 witnesses have given evidence in support of the company, and yesterday the Railways opened its case. The hearing began last Wednesday.

Mr Geddes said that any reduction in rail profits would be a charge against the taxpayer. The reduction in revenue would have to be offset by increased taxation and Government expenditure on public services would have to be reduced.

In New Zealand, internal transport already absorbed 29.4 per cent of the country's expenditure, he said. It would be a waste of economic resources to duplicate transport facilities unless it was essential.

Any increase in transport costs of secondary industries must directly affect the country’s export income. Every transport licence granted had an effect on railway income and therefore was adverse to public interest, said Mr Geddes. The witness said that if

traffic, which the railways had the capacity to handle, was carried by road in competition with rail, there was a waste of the country’s productive resources. The private interests of some individuals were satisfied at a cost to the public. This was undesirable.

Railways marginal costs were much lower than those for road because they were spread over more units of traffic, he said. New Zealand’s overseas assets were unsatisfactory and it was necessary for imports to be restricted. The Government had drawn attention to the need for reducing inflationary pressures. “Production resources in New Zealand require imports and any waste of production resources, for example, the unnecessary duplication of transport facilities, is inflationary,” he said. A healthy railway was necessary in the public interest. It could not be maintained in such a state if long distance motor-vehicle transporters and road competition, were allowed to expand unnecessarily, said Mr Geddes. “The Railways are entitled to protection,” he said.