"CUT THE LOSS"

Evening Post, Volume CVI, Issue 29, 3 August 1923, Page 4

"CUT THE LOSS"

A MINISTER ON BRANCH

RAILWAYS

PROBLEM OF MOTOR COMPETITION.

Road and railway competition and the doubtful value of some proposed branch railways formed the subject of frank references by the Minister of Public Works (the Hon. J. G. Coatcs) to a bouth Canterbury members' deputation. One of the points raised was in relation to the future policy regarding Waihao Downs railway, which lias been almost completely formed for its full distance of 3 miles 65 chains. When the Government adopted a policy of concentration on important construction works, the Waihao line was temporarily abandoned, and Mr. Burnett (Temuka) asked the Minister of Public Works what was his policy, because, as the work stands, the money spent is wasted. 'It might be better to cut the losses at that point," was one of the Minister's remarks during a general discussion of this problem of branch lines with a doubtful financial future. Mr Coatcs referred to. the fact that the whole main road in the South Island is what ho termed 'V. terrific competitor" of the railway;: and he suggested that if the Waihap,;. branch were, constructed there was nblguarantee that farmers would put all their business over it if motors would do it cheaper. If it was right that railways should be run on business Jines, he continued, then the'Waihao claim fell to the ground, becauso tho, deputation was asking the Department to do something which would result in loss.

Ml/ Si^if ncr (Wa;'ald): "They have spent £30,000 to £40,000 on this'line." The Minister: "Will you guarantee to give it your trade if we put the line jn: . ' • :

Mr. Bitchener: "We were not asked mi. l en c line was first started " The Minister: "No doubt! But-now we know that SO per cent, of the traffic will go by road. The service has been cut down because* we were not getting the business." He added that he had m mind another case where a line wns finished and the settlers were asked what business they would provide. Their reply-was to inquire what were the freight rates, and they then told the Department they could not promise their traffic. "So we do not run the line. We cut our' losses at the start." The Minister explained that in this instance, ras with Waihao Downs, there were good _ roads, and the Department considered it would lose more money by running the railway than by letting it lie idle. On the other hand, there was the question to be considered of the developmental value of railways. If, by running services out of a city for a few years at a loss a traffic could be built up which absolutely depended on the railway, it would ' justify some losses for the ultimate profit. Waihao Downs line was stopped when the concentration policy was adopted, but he would now go into the matter again. What had to be considered was the cheapest and best transit facilities, and it might be that sometimes the railway aspect might have to be sacrificed. Mr. Burnett: "It all depends on the charges.' I believe the Highways Board will have to consider these branch railways." The Minister: "Yes, that is obvious." It was, he continued, a matter for grave concern in view of the small margin in railway finance. It was a difficult problem, which he hoped to deal with fully in the Railways Statement. He also intended to follow his Public Works system in connection with railway improvements, by bringing down a statement of important works requiring first attention, and 'dealing with them first. No doubt some would say his list was wrong, but that was his' policy, whatever was thought of it.'