HUTT BUSES

Dominion, Volume 23, Issue 7, 3 October 1929, Page 8

HUTT BUSES

REASONS FOR LOSSES COST OF MAINTENANCE AND REPLACEMENT GOODWILL A FACTOR The difficulties which the Railway Department had faced in its development of the Hutt Valley motor-bus services were frankly outlined by the General Manager (Mr. H. H. Sterling) in his annual report presented to Parliament yesterday. Mr. Sterling stated that the service made a loss on the year’s operations of £7200, due to the high maintenance costs. It was found that the buses purchased from private concerns running on the Hutt Road had arrived at the stage where maintenance had become a' very considerable item. A thorough investigation showed that many of the buses were not in a condition to justify the large amount necessary to keep them in proper condition. The position was considerably accentuated by the corning into full operation of the motor regulations, which required a very much higher standard than had previously been the case. The seating had to be reduced in order to comply with the regulations, and that, of course, bad a directly depressing effect on the earning capacity of the various vehicles. Fresh Orders Placed. A complete review of the fleet brought the Department to the conclusion that it was hopeless to expect to give satisfaction in the matter of service or to show a reasonable financial return with the vehicles so purchased, and it was decided to at once purchase ten more buses of the four-wheeled single-decker type. Those busese were now in course of delivery, and were already enabling the Department to materially improve the service. Further buses would be required during the coming year to replace vehicles that had ceased to be economically efficient. Before embarking on further purchases, however, inquiries were being made as to the suitability of other types of buses, such as six-wheeled single-decker and double-decker in order that the fleet might be built up in a way that would give the best results both froth a traffic and financial point of view. Writing-off Process.

Another very material factor affecting the financial return on the Hutt services had been the writing-off of the amount represented by goodwill in the purchase price of the buses. The difference between the valuation of the buses as taken over and the total amount paid to the previous owners was £16,530, and that represented the amount paid by way of goodwill. “I think it is desirable that this should be written off as quickly as possible, and we are aiming to eliminate it from the accounts in five years.” said Mr. Sterling. “This involves a writingoff of £3300 each year, and this amount, of course, represents a burden on the working expenses that will continue until the total sum is finally disposed of.” Another factor which bore materially on the financial results was the imposition of the petrol tax. This accounted on the Hutt service for no less than £2284.