DOMINION RAILWAYS.

New Zealand Herald, Volume LXIII, Issue 19255, 18 February 1926, Page 13

DOMINION RAILWAYS.

BOARD CHAIRMAN'S REVIEW. ANALYSIS of gross revenue COMPETITION BY MOTORS. SUGGESTION OF CO-ORDINATION. [BT TELEGRAPH. —9WN CORRESPONDENT. J DUNE DIN. Wednesday. Various aspects of railway administration in New Zealand were reviewed byMr. F. J. Jones, chairman of the Railways' Board, in his presidential address to the New Zealand Society of Civil Engineers. Mr. Jones said that generally it, might be said that if the construction of a railway were financially justified, it must largely benefit the community as a whole. On the other hand'there might be sufficient justification in the benefit, derived by the community to warrant i.ts construction, although the line did not pay its way. In such'" a case the loss was ,4 justifiable charge against the community benefited. Logically if a, railway were to be run as a business enterprise provision should be made for such 1< sses to he recouped to the rail way accounts. Ratio of Working .Expenses. A figure much in use with railway administrations was the rotio of working expenses to revenue. For the year ended March 31, 1925,, this figure for the New Zealand railways was 77.9? per cent. The only portions of line on which the figure came under the average the North Island main line and branches and the Westport section, which gave ratios respectively of 70.61 per cent, and, 70.02 per cent. The highest ratio was given on the Nelson section with 100.80.

If the traffic -were fairly intensive, the ratio might be kept' down to somewhere in the vicinity of 70 per cent. ; on trie other hand if the traffic were sparse it is often' difficult to keep it below 100, at which point the* revenue just met the working expenses without allowing any margin for interest. Meeting Interest Charges. The problem of sparsely trafficked lines <vaa one with which all railway administrations were faced to u greater or lesser extent, and it was' not easy of solution. Given the ratio of working expenses for any particular line and the rate of interest the amount of revenue necessary to raable the interest on cost of -construction to be provided could tie fixed. Assuming a ratio ,of 70 per cent, with interest at 5 pet cent., the amount of revenue per mile of line necessary to pay interest ori £IO,OOO a mile capital cost would be £1666 and at £20,000 a mile capital cciit, £3333 a mile of line will be required. The actual revenues derived from various sections vary greatly. Country lines, dealing with only agricultural and pastoral communities, rarely reach more than a few hundred pounds a mile revenue. Such a line as the Auckland Main Trunk, with a heavy express passenger service and a heavy goods service., might reach £4OOO to £SOOO a mile. The Westport section, which had a heavy coal traffic, has a revenue of £3500 a mile. The average earnings for the whole railway system last financial year were £2316 a mile; of this £BB9, or 38 per cent., was for passengers and £1427, or 62 per cent., for goods.. New Zealand and Australia. Mr. Joies gave the following figures regarding the revenue of the two mam systems and of the whole of the New Zealand railways, together with comparable returns for Australian railways:— Revenue per mile of line. Passenger. Goods. Total. New Zealand .. .. £BB9 £14517 £2316 N.I. m&in line and branches .. .. 1490 2112 3602! 8.1." main line and . branches .. .. 570 1007 1637 New South "Wales .. 1:246 17(14 3010 Victoria .. U. 1844 1524 ' 2868 Queensland .. .. 'IOB 76>1 1163 South Australia .. 587 1099 1636 Western Australia .. 1265 6&1 916' Tasmania. ■ .. " 329 4E15 814Reference was made by Mr. Jones to the question of motor competition with railways. He said the competition of the 'motor-lorry was not likely to be so pronounced as that of the motor-bus, as the field of the former was more limited, and when, with the adoption of accurate costing, the true expense of motor-lorry service was disclosed, its operations would be largely confined to the short haul and small! lots traffic. Too much stress could not l.e laid on the'necessity for accurate costing, ais it was only by a full knowledge and accurate analysis of the various charges on the service that revenues sufficient to cover all charges could be fixedNecessarily assuming satisfactory service on both aides, the guiding factor in determining which service would carry the traffic would be the comparative costs. In Great Britain, the United States, Australia audi other countries, railway administrators were fully alive to the fact that it was necessary to co-ordinate motor services with railway servict'3 rather than to enter fhto a war of systems, which would only be disastrous to both. As an illustration of the necessity for the revision of the railway tariff last year,. Mr. Jones mentioned the increase in road metal charges. Prior to tho adveint of the new tariff, the average l*aul for road metal wss 46 miles. The gross receipts were .73d a ton-mile; after deducting terminal charges, the receipts averaged .30d a tonmile. This gave for a full train load for the length of average haul, a revenue of nnder £6, clearly an impossible position.