BRANCH RAILWAYS.

Hawera Star, Volume XLVI, 7 August 1926, Page 6

BRANCH RAILWAYS.

UNPRODUCTIVE AND COSTLY

EFFORTS TO AMELIORATE SITUATION.

The problem of unproductive and costly branch railway lines is dealt with as follows iri the annual Raiway Statement which tire Rt. Hon. J. G. Coates laid on the table of the House on Thursday:—-

in pursuance of the policy previously announced, an investigation has been made into the finances of branch lines, and. isolated sections.’ of railway, which were built in order to encourage settlement, and to develop the resources of the country. Officers of the Treasury, Audit, Crown Law, and 1 Railway Departments conferred in order to determine an equitable, basis for arriving at the true position of such lines, after assessing their value a.s feeders of the main lines.

The outstanding facts are the low earning capacity of these lines, and the high ratio of fixed capital charges to revenue. At the present stage of development, the earnings could not be materially .increased, even if the railway had a monopoly of the traffic. Since the investment in railways consists mainly of loan moneys, the capital charge® cannot be reduced, as, even if the lines were closed, the capital charges would still have to be met. The only, method by which any appreciable improvement can be effected is by the reduction of the working expenses. In order to reduce traffic and locomotiive charges, experiments are now being made with light rail-cars of various types, while maintenance charges are also being reduced to the lowest point consistent with safe working. The best that can be expected* of such means is, however, the reduction of the gap between, operating revenue and expeniture. In very few cases is there any immediate prospect of obtain-

ing any net revenue to meet capital charges. The problem of providing adequate transport facilities in sparsely-settled coxurLt-ri-es is not T>ec.ixlia.r to N<&w eZa-

'and. Investigation shows that the practice in other countries is to pay tho railway authority from, the public funds for remunerative services involved in the working theeref, it being recognised that the benefits accruing to the State a.s a whole far outweigh the cost to the State.

In New Zealand the payment made to the railways has been confined to specified branches, and to usolntUd,

sections of line not- connected with the main svstem The. payment is so regulated that every improvement effected

in the results on unassisted lines must automatically reduce the payments in aid of branch lines, and in a, lesser degree of the isolated .sections. There hag been from time to time some criticism of tlie arrangement under which the specified branches and isolated sections of line are directly subsidised from the Consolidated Fund, such criticism being generally in the ‘direction of suggesting that the pay-n-e.nt involves practically giving the railway administration a blank cheque on the Consolidated Fund wherewith

to provide services at its discretion on branch lines, the inference being apparently that services wasteful in their nature, or unjustified, will be provided under such circumstances which would

nob otherwise have been established. Such a suggestion is quite wrong, and must he based on a very superficial f.na'hvsis- of the arrangement. The truth is tliat the very opposite is the effect. Under the old system thfe accounts did not disclose what was. being lost in the operation of these developmental lines. Under the new system this amount is known exactly, and exact information is also obtainable from the railway accounts as to the extent to which the Railway Department is reimbursed on account of that loss. The reimbursement again is based on. the operating- cost of the railways and is incapable of manipulation in any way. Instead, therefore, of the facilities of wasteful administration being extended the arrangement provides a. very efficient check thereon. It does, indeed, what the critics suggest it .should do.