TRAM ELECTRIFICATION

New Zealand Herald, Volume LXIII, Issue 19307, 21 April 1926, Page 14

TRAM ELECTRIFICATION

TAKAPUNA SCHEME ABANDONED QUESTION OF COMPETITION. UNDERWRITERS' ATTITUDE. GUARANTEE OF MONOPOLY. The proposal for electrification of the Takapuna. tramway has been definitely abandoned. It has been common knowledge for some days that the scheme of finance which the Tramways and Ferry Company had in contemplation necessitated a final decision on the point by midday yesterday.

To facilitate the scheme the company virtually demanded from the 'lakapuua Borough Council last week a monopoly of the passenger traffic, to the city from the whole area between Miiford and Belmont, and offered the municipal authorities 50 per cent, of its annual profits after allowing, for 6 per cent, on its paid-up capital and also interest .on an issue of £73,000 worth of debentures. The borough was assured of representation on the directorate by two of its councillors. These concessions were to be the consideration for an undertaking by the Borough Council to use its best en-1 deavouis to obtain for the company, from the Transport Board which is expected to be created under the coming motor traffic regulations, immunity from the competition •of buses along the tramway route. "An Absolute Guarantee," The undertaking was given by the council, as an inducement to the capitalists with whom the company was negotiating. It was embodied in a memorial couched in the necessary legal form and forwarded to the directors. In the negotiations of last week', however, it was made clear by (he deputation from the company to the special meeting of the council which considered the position, that the directors could not guarantee that the electrification system would be put into effect. Every thing, it was emphasised by the deputation, would depend upon the view taken by tile financial people as to iiie prospect the memorial gave the company of securing a profitable traffic on its tramway and ferry services. The reply to the memorial reached the borough authorities yesterday. It was a letter from the secretary of the company, and was to the effect that the directors appreciated the action of the council in furnishing the memorial, hut it had been represented to the board by the underwriters that .nothing short of an absolute guarantee, of a monopoly would justify the company in borrowing such a large amount of capital as would be required for electrification purposes. "Electrification Not Justified." The conditions, added the letter, had changed with sorri". rapidity, and the manifest determination of a .section of the public, to ride in motor-buses made electrical undertakings extremely hazardous. Therefore the directors had with great reluctance came to tho conclusion that in the present circumstances they weto not justified iu proceeding with electrification. The memorial was accordingly returned to the Borough Council, clearly in cancellation of the arrangement between the company and the borough. • An inquiry was mado last evening of Mr. ,T. Kerr, manager of the Takapuna Tramways and Ferry Company, Ltd., as to what arrangements were contemplated for carrying on the transport services between the city and Takapuna. " All I can say at present," said Mr. Kerr, " is that the electrification project has been abandoned. That is as far as the matter has gone, so 1 cannot discuss plans for the future —they have yet to be decided upon." LITTLE EFFECT ON POWER BOARD. STATEMENT BY THE CHAIRMAN. The altered situation arising from (he collapse of the scheme for electrification of the Takapuna tramway raises an important question of how the Waitcmata Power Board will be affected by losing as a consumer the Tramway Company, which was expected to be its largest consumer for electric energy. Mr. J. W. llnyden, chairman of the Power Board, stated last evening that he could not, on the spur of the moment, give specific figures as to the effect on the board's finances, in view of the fact that the tramway company had signed a definite contract to take electric power by the end of next September. The position was that the board was to supply the company at the Government rates, plus one-third of a penny per unit. This rate, would not briiiß any important return to the Power Board, for some time, until tho board had the benefit, of some diversity between the company's maximum demand and maximum demand in the rest of the area. Again, (he board would have had to spend a good deal of money in providing for the tramway company, and although it would, in return, have bad a revenue of about £SOOO a year the major portion of that would have, had to go to the Public Works Department, as the original source of supply. Therefore the department would be the losers by tho,collapse to a greater extent than the board. On the question of how the changed situation would affect the hoard's relations with its domestic consumers, Mr llavden said the effect, would be practically nil. The demand for power in other parts of the Waiteniala district was exceeding the board's anticipations This was the ease as regards both large consumers and domestic consumers. There was not the slightest ground for fear that any increase, in the charges for current would ensue. Even without the framwnv company as a consumer, (here was still a margin of estimated revenue over expenditure. The arrival at finality on the tramway supply question would mean that the preparatory work of the hoard in Takapuna could now bp expedited. To a great extent it bad so far been hung up pending the decision of the company, so thai the reticulation of other parts of the board's area was considerably in advance of that in Takapuna.