MINISTER'S STATEMENT

Evening Post, Volume CX, Issue 49, 26 August 1925, Page 9

MINISTER'S STATEMENT

"RESULTS VERY SATISFACTORY" POLICY FOR THE FUTURE. ■ Taking into consideration the extraordinary circumstances that prevailed, and the exceptional demands that had to be met during, the last financial year, the Minister'of Railways says, in his annual Railways Statement, he considers the results to be very satisfactory. The net revenue amounted to £1,567,108, equal to 3.55 per cent, on the capital invested in lines opened for traffic. , The complete cessation of operation* for eight daya, as the result of the disagreement with one section of the railway employees, resulted in a loss estimated at £150,000. Increased contributions to the Government Railways Superannuation Fund amounted to i £90,000. The infantile paralysis epi- I demic adversely affected the Depart- j •ment's revenue during the summer months, and was responsible for a loss | of about £100,000. The most important ohanges in policy were the creation of a special railway fund, and the general reorganisation of the Department s financial and accounting systems. The placing of the accounts on &■ commercial basis has not been done with the object of making increased profits, but purely for the purpose of ensuring efficient working dud enabling the administration and the public to ascertain the true position with regard to the Department's operations. The Statement reviews at some length the finding's of the Boyal Commission of Inquiry, and the policy which has been! put into operation since the Commission sat, ajt well as the question and the tariff, which was recently revised. In view of its magnitude the tariff is to be presented as a special Parliamentary paper this session. MEETING ROAD COMPETITION So far as the commercial branch is concerned, the Statement says that the most important departure from-the Department's past policy has been the creation of special rates to meet special conditions due to serious motor competition in certain localities. ■ Investigation, showed that this competition was securing a good deal of the best-paying business and leaving the lower-freighted commodities for the Department to handle. There were instances in which carrying firms brought the latter class of goods to the nearest railway station, while carrying those in the higher classes right through to destination by road. Benzine and dairy produce constituted the backbone of the motor competition, and to the carriage of these much attention lias been given by the officers of the commercial branch and the board, Benzina has been reclassified from Class A (rate and a half) in 1922 to Class B (plus 25 .per cent, for any quantity), representing a reduction from £3 14s to £2 Hi lid per ton for a distance of 100 miles. In addition special ratee have been arranged to secure traffic in . certain districts. As a result, our benzine traffic is increasing, and the position is being very closely watched. For dairy produce special rates have been arranged to recover traffic from competitors, and the latest reports indicate that in the forthcoming season the result will be highly satisfactory. • "It is natural that differentiation of rates should give rise to some cony plaint against such a policy in a Stateowned undertaking such as the railways, but the study given the problem by those concerned made it clear that in localities where the motor could compete under the conditions existing, extraordinary measures would have to be adopted," states the Statement. "Unless it was checked this competition would make such serious inroads into the Department's revenue as to leave the Government no alternative but to increase freight rates all round to make ends meet. In addition, the further loss of traffic would mean reduced service, which in itself is sufficient under modern conditions to drive traffic away.' IN THE PUBLIC INTEREST " Undoubtedly the stepi taken were in the public interest. In this connection it is. clear that the position of railways versus roads is economically unsound, inasmuch at commercial lorryowners have not been called upon to jxy a quota of the cost of road construction and maintenance commensurate with the service obtained, whereas the railways have to meet all such obligations. I, have stated from time to time that where it is found that districts are more economically and conveniently served by road than by railway, they should have one and not both. It is clear, however, that this can be only ascertained by placing both systems on an even footing as far as may be possible and scientifically comparing • the relative cost of service. ' The Railway Board states that the Department was practically subsidising the construction and maintenance of roads to the extent of £65,000 per annum by carrying road metal at an unpayable rate, which is indirectly a cause of the Department's having to reduce its rates on the higher classes to meet road competition. " The commercial branch has obtained also a good deal of information about a collection and delivery system at stations, and tenders have been accepted in some places. Through rail and motor tours are being, carefully investigated in the various localities with the object of influencing the maximum amount of traffic to,the railway. Successful arrangements have been made in many places for linking up the railways with reliable carriers and passenger transport firms serving towns and country districts from the nearest station." MAIN TRUNK READJUSTMENT It is estimated > that during the current year the train-miles will be increased about 800,000. The Statement says it may be possible to so arrange the running of the ordinary Main Trunk expresses next summer a» to enable the scenic part of' the Wellington-Auckland journey to be covered in daylight hours. As in the case of deck-cabins on ferry steamers, a slight increase in price will be made for the improved type of twoberth sleeping car, with its added comforts and conveniences, which is being constructed. Consideration is . being given to. utilising the converted emergency sleepers, provided for J(he "Limited," for second-class passengers. Information is being obtained with .regard to all-steel sleeping cars for the Main Trunk expresses. There can be little doubt that later on it will be desirable to make the "Limited" express a full sleeping-car train, in which case the Department's stock of these cars will require to be very considerably increased. A study has been made of many modern designs 'of day .coficlies .for use on the more important services. CURTAILING UNPAYABLE SERVICES The management was actuated by the best motives in curtailing services' on 'unpayable Ike* ill oixiw w reduce the

serious losses incurred over a long period of years. Considerable public dissatisfaction was expressed because of the action taken in reducing services, but from a purely commercial point of view the running of additional trains could not be justified. It was equally clear, however, that the service provided on many of these lines at present was not up to the standard required by the public, and that it had been responsible for much of the road competition during recent years. '.'lt is the aim of the present Administration to adopt every possible means of reducing ■working costs and to so improve the services as to enable these lines to hold their own with other forms of transport," says Mr. Coates. :"It is not anticipated that the revenue will be greatly increased, but that a, much-improved service will be provided without additional cost, ,' I am convinced that better services should be provided on such lines; that working costs should be reduced as far as practicable by the utilisation of self-propell-ed units and by other means; and that legislation should be enacted providing that the railways be reimbursed for the annual losses incurred, as is done in the State of Victoria, after making adequate provision for the profits made by main lines as the result of traffic from, the branches. Unless the State is prepared to subsidise reasonable services on these branch lines it will be impossible to avoid annual deficits without a general increase in rates, which would be manifestly unfair to railway users as a whole. Deficits have to be met out of the Consoliflated Fund in any case, but the method suggested is more satisfactory from every point of view, and will enable the Department to give an efficient service in keeping with modern ideas." NEW WORKSHOPS Dealing with workshops reorganisation, which is to cost £1,500,000 and be spread over three years, the Statement says that complete • electrical installation and the adoption of accurate costing methods and production schedules is provided for. It has been decided to erect modern buildings and facilities on new sites for the Newmarket and Petone workshops, and tenders will be invited for the ' construction of theee works at an early date. ' . The savings that it is anticipated will be made possible are estimated ai follow :— £ Locomotive repairs 84,000 Car and wagon repairs ■ 92,000. New work/ 25,000 Interest on capital cost of additional rolling-stock made available 17,500 Rents from present sites at Newmarket and Petone ... 11,500 ' £230,000 Annual charges for interest, depreciation, etc 115,000 Annual profit £115,000 The above figures have been taken out on a very conservative baais, but even so, it is estimated that the economies will repay the total cost in 10.7 years after completion. The whole it based on the most modern methods ia operation throughout the world. The reports presented by the technical officers of the Department showed that under existing conditions locomotive repairs were taking nearly double the time taken in shops equipped with modern facilities. The machinery in use )» out of date and non-productive, mi the report's indicate that'6o per cent. is from twenty-five to forty-seven years old, 30 per cent, is from ten to twentyfive years old, and 10 per cent, fairly modern; and in addition much essential machinery is entirely absent. TURNING OUT HOUSES The housing scheme is an extremely good one both from the point of view of the Department and of the staff. The pi-esent receipts from rents of the old and new houses do not quite meet requirements, and it may be found necessary to rearrange rentals to bring them more into line with the annual charges. It may also be possible to reduce costs by working the factory at Frankton Junction to its full capacity and •disposing of the cut houses, over and above the Department's annual programme, to relieve the general' short-, age of houses existing in various part* of the Dominion.