Railways’ freight up, but revenue down

Press, 20 August 1984, Page 28

Railways’ freight up, but revenue down

PA Wellington Road transport deregulation, and industrial disputes such as the Picton roster row, have cut The Railways’ profitability, the corporation’s chairman, Mr Lyn Papps, has said. In the first four months of the financial year to the end of July, the Railways had carried more freight than the comparable period last year, but revenue was down, Mr Papps said. “This has been partly because of the very competitive rates being charged. Obviously, our ferry freight has been down because of the ■ industrial problems. That has had a marked effect and it has hurt our credibility. “We have been controlling

expenditure fairly well, but we have had the combined effects of devaluation. We have had to pay more interest on loans, we have had to take into account the capital loss on overseas loans, and we have had the increased cost of fuel,” he said. However, Mr Papps said he had not given up hope that the Railways would return a profit in the current fiscal year. In its first year as a corporation, the Railways made a $24.2 million profit in 1982-83. Within the next few weeks, Mr Papps says he will announce a similar return for 1983-84. In spite of the poor revenue returns of the first four months, the Railways

would be out to reduce costs and capture more freight. Freight rates and fares would probably be increased to recover costs, but he was unable to say by how much. The executive director of the Road Transport Association, Mr Dion Savage, said that the road industry was not surprised that the Railways was losing money. “The cartage rates they are charging are completely unrealistic. They appear to have adopted the attitude of maintaining their volume at any cost. “That depresses the whole market, because road carriers have to do the same and it creates a ratchet effect,” Mr Savage said.