TAWA FLAT FINANCE

Evening Post, Volume CXV, Issue 14, 9 May 1933, Page 6

TAWA FLAT FINANCE

From the beginning of the economy policy it has. been evident that there is no general overriding principle that can be applied to the question whether new construction of railways is to be continued. Each new work has had to be considered on its merits; and policy has, after investigation, ceased construction on some lines and has completed it on at least one other —the Stratford line. Such discrimination was not arrived at without careful weighing of the evidence in each case. Among the points that enter into consideration are: (1) The percentage of total cost required to complete; and (2) the "probable retura" o|<tb«^woiking

line. Emphasis has also'been placed by advocates of the South Island Main Trunk railway on the words "Main Trunk," meaning that branch lines, not trunk lines, are the weak points of the railway system —wherefore trunk construction must continue. That, again, is a principle not to be blindly applied. There are trunk lines and trunk lines. The Taws Flat deviation is a shorter link in the most successful trunk system in the country. It is a saving link in a going concern. Its business awaits it. There is no need for any wild guessing at the "probable return"—such wild guessing as marks a fifty miles proposition in new country. If there is one permanent thing in the railway system it is the North Island Main Trunk railway. The Tawa Flat deviation is a long approved "cut" in the cost of carrying on a known business. It is one of the few "cuts" that everybody may welcome —.this without prejudice to the feelings of people on the Johnsonville hill. The hill itself is an overwhelming prima facie case for the Tawa Flat tunnel. And engineers and accountants have confirmed the assumption that Main Trunk traffic needs the deviation. There is, therefore,. no doubt concerning the return. As to the cost of turning the tunnel track into a working railway, we have no figures of this, and therefore cannot say what percentage it is % of' the borrowed capital already sunk in the hill, nor what the anticipated saving will be when the traffic of today and the finally checked cost-of-construction are brought into relation. But, assuming that the traffic of today is abnormally low in comparison with what will be, we feel confident that the completion of the Tawa Flat deviation will result in such a saving as will provide a profit on working, and probably as big a contribution to its interest-cost as is made by any other part of the trunk railways. In short, we believe that an up-to-date estimate will indicate that the deviation, if completed, will not weaken present finance and will greatly strengthen it as business recovers. The Railway Board of course has to consider not only what will be the return on the required capital expenditure, but also where the capital is to" come from. In other words, can the capital, if its expenditure is warranted, be obtained? The position would be clarified if an official statement were issued' covering the points in doubt, and placing the argument as far as possible on a basis of facts. In principle, the case' for completing a shortening and saving link in the country's best railway asset is strong, but principle must be considered in relation'with the particular circumstances, and also the money-raising .question. It is sad to see railway millions scattered along the East Coast, with just one gap, and a return based on hope. It would be still sadder to see huge idle borrowed capital lying waste on the, approved route of a traffic from which the return is known, and which is New Zealand's railway backbone.