Supporting Rail Costs And Losses

Press, Volume CVI, Issue 31221, 19 November 1966, Page 19

Supporting Rail Costs And Losses

(Neu? Zealand Press Association i WELLINGTON, November 17. Some method of financing the capital costs and unavoidable losses of the railways must be found or costly and uneconomic services would become insupportable, the recentlyretired General Manager of New Zealand Railways (Mr A. T. Gandell), said in Welli’\,ton today.

Perhaps some form of financing and subsidising from special national funds might be the answer, Mr Gandell told the Institute of Transport conference. It was difficult to make the railways a viable concern so long as it was also expected to be a social service absorbing rising costs and providing desirable but uneconomic services, said Mr Gandell. He said urban passenger transport was an example of a desirable but costly service. Passenger Transport Passenger transport, particularly by that for urban passengers, would require major policy decisions on the extent to which the railways might properly be expected

to finance the services in the interest of the country, said Mr Gandell. He said there was economic justification for two modern express trains on the North Island main trunk railway and progressive up-dating of some other passenger services. Passenger traffic returned only 7 per cent of the Railway Department’s gross revenue as against 77 per cent from freight traffic. While freight traffic had doubled in 30 years passenger traffic had remained practically stationary for those years, he said. “This is essentially an air ; and motor-car age for the pas-1 senger,” said Mr Gandell.