COST OF THE RAILWAYS.

New Zealand Herald, Volume LXVII, Issue 20607, 4 July 1930, Page 15

COST OF THE RAILWAYS.

REVIEW OF EXPENDITURE. BURDENS ON THE FINANCES. NEW MINISTER'S CRITICISM. [JIT TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON, Thursday. "It is not so much the connecting of the main lines and the giving of a better service to the people that is going to increase the cost of the Railways Department," said the Minister of Railways, the Hon. W. A. Veitch, in speaking on the Address-in-Reply debate in the House of Representatives to-day. "It is the big fancy jobs, (lie building of expensive tunnels and extravagant and ambitious expenditure on the reorganisation of depots and workshops, that are crippling the Railway finances." . Discussing railway works undertaken by the present Government the Minister said there was only one railway construction work in hand which had not been started by the Reform administration and there had been no commission to investigate these works, although the Leader of the Opposition had suggested that present constructional activities should be subject to such a survey. The Minister had just received a report from the general manager of railways upon branch lines in both islands. The report contained facts and figures as well as suggestions as to how it might be possible to reduce the cost of running tho railways. The Waiotira-Kirikopuni Line. In the general manager's report upon tho Waiotira-Kirikopuni line it was pointed out that the section was reported upon to the Government in August, 1927, by the chairman of the Railways Board, who estimated that the loss on the line would be £77,000 a year after making an allowance for the subsidy of £IO,OOO .1 year that was at that time being received on the Okaihau section. In as much as the subsidy was not'being received the loss was estimated at £87,800 a year. That included £72,800 for interest, so that there was an estimated operating loss of £15,000. A Labour Member: Who built the railway ?

The "Minister: The Reform Government.

Mr. Veitch added that he did not think the figures he had quoted over-estimated the position. They were based on the revenue of the Okaihau line, doubled, and that of the Waiotira section quadrupled, so that a very liberal view had been taken. He accepted the statement of tho Leader of the Opposition that certain investigations were nude before the construction of the line was undertaken. The present Government had laid down its policy in regard to the reduction of losses on railways services. Reorganisation ol Workshops. Tho Minister said he desired to remind Mr. Coates that the losses on the railways were not so much due to the building of main lines carrying through traffic, but to the very heavy expenditure in other directions. The reorganisation of the workshops was an instance of that. Tho chief mechanical engineer reported to Mr. Coates that tho estimated cost of this reorganisation would be £1.600,000, but before it was completed it would cost £2,500,000. Mr. Coates: There lias been a lot of additional work.

The Minister said he was willing to assume that the first estimate was not complete. However, the chief mechanical engineer had advised that the reorganisation would mean a saving of £279,000. However, in the first year of the operation of the new shops repair work had increased by £556.000. In fairness it had to be explained that during the transition stage there had accumulated » considerable amount of work and the rolling stock had got into a. very bad state. A Labour Member: It still is. New Stations and Depots. The Minister said that accumulation of work had to bo set alongside the difference. However, as far as he could judge, there would be a considerable loss on the workshop reorganisation scheme. Discussing the scheme of the construction of new railway stations and depots the Minister said it had imposed a very heavy loss upon the finances of the department without increasing the department's earning power at all. The provision of the large depots at Wellington and Auckland would cost more than the old to run and they would be a constant load on the finances of the department. It was interesting to note that the construction of the missing link in the South Island Main Trunk lino would cost just about as much as the reorganisation of tho Auckland railway station and its environs. Although he had not yet had a chance to go fully into tho question of finances, from what he had seen already he was afraid that carelessness had been shown in the drafting of expenditure. Large sums of money had been spent without investigation being made as to the value of work to be undertaken or what the financial result would be.