WORK SUSPENDED ON RAILWAY DEVIATION.

Manawatu Times, Volume LIV, Issue 6887, 17 April 1929, Page 7

WORK SUSPENDED ON RAILWAY DEVIATION.

Enormous Expenditure Unjustified, says Premier 1 Men Employed to be Transferred The Government has decided that work on the Palmerston North railway deviation shall be discontinued, the men being employed clsew’here.. In announcing this reversal of policy yesterday, the Prime Minister (the Right Hon. Sir Joseph Ward), said it was considered that the huge expenditure involved was not justified by the present congestion at the railway station, / while the idea that the deviation would totally eliminate level ci'ossings was erroneous. Sir Joseph said that when the deviation was propsed in 1924 the expenditure was suggested because traffic developments at that point indicated that it would double in 12i years. Subsequent experience had shown that this expectation had not been iulfilled, and that crucial fact, coupled with financial considerations, had determined the Government in deciding to suspend the work. j ) . The actual expenditure up to March 31 on the deviation was £216,000, which on the latest estimate, left £509,000 still to he provided to complete the work. If, even 30 years hence, it became necessary again to go on with the work, it could be commenced practically from the point to which it had been brought, with comparatively no loss in the shape of deterioration.

Tlio Prime Minister said that the important question of the deviation from the present railway station at Palmerston North had been receiving very close attention and the most searching investigation by the government for the last eight weeks, and had been beforo Cabinet during that time on several occasions. Ten of the Ministers had visited Palmerston North personally to examine on the spot the work they had been dealing with in Cabinet from plans and reports, and this week they had arrived at a unanimous decision “that the Palmerston North railway deviation work be not proceeded with.” Sir Joseph Ward said that both he and his colleagues d'feeply regretted that in the general interests of the country, not excluding the town of Palmerston North itself, an immediate review of the work was necessary, and the decision arrived at appeared to the whole of the Ministers to be the only one that they could come to in the true interests of the country. The question from the beginning had been approached entirely free from political considerations, of any kind, and ho wished to put on record some of the facts as they presented themselves to the government. The general public must be the judges, and from its con elusions from the facts as they were now presented.

Costs Considered. “The latest estimate,” said Sir Joseph Ward, “of the sum. required for carrying out this deviation —including a new station at Palmerston North and the Whakarongo deviation, which is a continuance of the new portion to connect' up the new line with the present line leading to Napier, is £725,000. That is the lowest estimate made recently by the officers of the Public Works and Railway departments, and the cost of the new railway station, with verandah, platforms and subways included in that is estimated at £80,006. The, amount actually spent up to March 31, is £156,000 by the Public Works department, and £47,000 by the Railway department (payment for land), whilf *here are some land claimi not yet settled which are estimated to involve approximately £13,000. This makes.a total of £216,* 000, which, deducted from the latest estimate of the total cost, leaves £509,000 still to be provided to complete the work. The whole.. of the work when completed is not expected to produce aqy additional revenue to the railways whatever. On the contrary, tho cost of working the new station and yards will be increased to the extent of approximately £BOOO per annum, apart from the los3 of interest and sinking fuid. Between 1921, when the traffic reached its peak, and 1928, the passenger traffic had not only not increased, but had decreased to such a largo extent that it was back to about the same as it was in 1905. The goods traffic also reached the peak in 1921, and ffince that time has shown a decrease. Unjustified Expenditure.

“As regards congestion on the present site of the railway station, 'I desire to say that conditions as now operating do not show that this exists In any such measure as to justify the huge expenditure involved in providing the new, station and yards. With tho failure of the traffic to increase as was anticipated, and with a suitable arrangement of the work of trains, the situation has completely altered, and to such an extent that the General Manager and his officers have reported that they are quite satisfied that an expenditure of about £33,000 in tho present Palmerston North railway yard will afford all the facilities necessary to enable the business at Palmerston North to be carried out with reasonable convenience on the present site for some years to come. “It is found also that the working costs of tho railway yard and the station on the new site will bo approximately 50 per cent higher than on tho present line. This is the result of careful calculation and compilation of detailed figures by the General Manager of Railways and his officers. TheGeneral Manager informed the government that he holds a strong view that the removal of railway stations to a distance from business centres reacts very unfavourably against railway business as regards competitive modes of transport. “The main difficulty in the railways to-day arises from the necessity to

transport between business places and N railway stations, and as the distance of this transport increases so does the disadvantages to the railways also in< propqp An Expert’s Opinion. “In 1921 Mr J. P. Maxwell, who had had nine years’ experience as General Manager of Railways, five years’ as Commissioner of Railways, and five years' railway experience in England before coming to New Zealand, said in his evidence before a Commission which was set up inquire into and report respecting the facilities for the conduct of railway business at Palmerston North: — . '■ I think that to divert the railway, to expend £700,000 on making a new station is the height of extravagance/ I do not think there is any reason in it, especially in these times, when everything in the way of economy is eo important. £700,000 for one stationl . It is terriblel The circumstances as they have developed' appear to fully justify the • opinion then expressed by Mr Maxwell. “The alteration now being, made,” said Sir Joseph, “cuts off all railway connection as at present with the racing club from the main lino of railways and places the agricultural show grounds at a greater distance from the station than at present. It also affects the industrial area north of the po3t office where some concerns having an extensive business with the railways have their private railway sidings connected with the main line. They would, under the rearrangement, be some two miles -from the railway centre, and would be involved in additional expense for shunting charges—probably not less than 2/- per truck. This may not, to people not familiar with it, seem a, large amount, but it is a matter which requires to be considered by ' the Railway department when it becomes an added charge to the railage their business clients are called upon to pay. The idea that the deviation is going to totally eliminate the level crossings at Palmerston North is quite erroneous, because I feel satisfied that the line serving these industries would still require to remain with its level crossings and lines running across the streets into the private sidings. It would unquestionably eliminate the traffic over the streets in the Square, but the railway track required for industrial purposes would of necessity remain, and would require to be worked by shunting engines from the new sito. I-

Prospective Revenue. “It must not be forgotten in assessing the position that the loss of interest on | the amount of borrowed money that it is proposed to put into this work has to bo considered and takon into account. The General Manager of 'Railways advises tho Government that he can see no prospect whatever of extra revenue being earned as a result of the carrying out of tho deviation now under construction, and therefore it is certain that both the interest and sinking fund upon tho lowest amount that it is estimated these works will coat, must be taken into consideration to get tho truo position and to ascertain tho loss that the country would sustain if the works were completed. “Tho foregoing,” said the Prime Minister, “will give a general idea of the position as it Las officially presented itself to the government. In view of tho unsatisfactory nature of it from a financial point of view, it is only fair —and, indeed, necessary—-to ask where tho country would stand if the government were to shirk its responsibility and go on with tho knowledge of tho facts that are before it and spend the balance, making a total of £725,000 in all. The debt repayment term on account of interest and sinking fund covers a period, under the present system for repaying loans, of 55 years. I propose to calculate the loss of interest upon the £725,000 over a period of 30 years—little more than half tho term thao the Act now provides for tho repayment of loans. This is giving nearly a 50 per cent reduction of interest upon the £725,000, and to calculate the interest and sinking fund at the rate of 5$ per cent it would amount to a loss (including interest for only 30 years, not for 55 years as the Sinking Fund Act now provides) of £1,196,250. As the Railway department states that the loss of working the new yard

as against the old yard is £BOOO a year, even by reducing the period for repayment of loans by half, the result financially would be one that could legitimately be termed disastrous. “In The Public Interest.” “Summed up, the position is that neither the railway officers mor the government have any motive to serve other than what appears to be tile public interest. The fact remains that in the light of the conditions as they have developed, 'the whole proposal, unless it were an indispensable necessity, is one that has nothing train a railway point of view, nothing from the country's point of view, and nothing from a financial point of view (but quite the reverse) to justify any government in going on with it. | ‘ ‘ The amount already expended will, of course, have its repayment provided for by sinking fund. From an economic point of view the amount already expended may by some appear to be thrown away, but this is not so, because the wiiolo of the expenditure already incurred has been spent on the acquisition of land and the carrying cut of eaithvfork and the construction of bridges.

“No buildings whatever have been erected, and if, even 30 years from now, it became necessary again to go on with the work, it could be commenced practically from the point to which it has now been brought and comparatively no loss in the shape of deterioration would have occurred. Reabsorbing Men Employed. “In dealing with this important-mat-ter the government as the employer of labour engaged at the Palmerston North deviation have given the fullest consideration to the positron that the stoppage of works will effect the workmen. At present there are 215 officers and men employed. Most of the formation work is in such a state that it could be stopped at once. bur. there are several works such as drains and a canal which will have to be completed to make them safe to avoid future claims for possible damage by flooding. The requisite number of men will be kept on for that purpose. The majority of the men are labourers, and a ' start will be made immediately by sending them forward to the GisborneWairoa railway at the rate of 40 per week. These include blacksmiths, carpenters, and possibly some of the mechanics. It,is calculated by the Public Works department that most of the men would Tje transferred within four weeks from the stoppage of the work. i Thirty or 40 of them would be retained for the purpose of finishing drains and the canal mentioned. Arrangements will be made as was done in tiie case of the men from the Rotorua railway, by which the government will transport the men and their gear to the new work and provide for cost of transit, also allowing them Arbitration award rates for two or three days of the necessary travelling time. Anything that can be done in this respect the government will do. “The foregoing,” said the Prime Minister in conclusion, “gives a clear outline of the views of the government in connection with this important mat- - ter. I have not stressed or exagger- . ated the position in any way, but have endeavoured without casting reflections upon anyone to show the reasons for arriving at the decision which the government feel to bo their clear and unmistakable duty to give effect to in the general interests of the people of the country.”