UNPROFITABLE RAILWAYS

New Zealand Herald, Volume LXVII, Issue 20650, 23 August 1930, Page 14

UNPROFITABLE RAILWAYS

THE NEW CONSTRUCTION. | I ANNUAL LOSS OF £737,500. GOVERNMENT'S ESTIMATES. EARNINGS LESS THAN EXPENSES. ' / [BY TELEGRAPH. —SPECIAL REPORTER. J WELLINGTON. Friday. An annual loss of £737,553 is estimated on the seven lines of railways now under construction, according to a statement to-day in redemption of a promise given tabled in the House of Representatives by the Government last session. The statement deals with seven sections of railway, aggregating 342 miles 31 chains, of whifch tho total cost is estimated at £13,631,000, including expenditure to June 30 amounting to £6,465.350. Following is a summary of the estimated capital cost of the various lines, showing i in parentheses the average cost a mile ' and also the total expenditure to Juno 30:— Capital Spont to Cost. June 30. Okaihau-Rnngihua .. £1530,000 £576,809 (48,181) Kirikopuni-Dargaville 5 til,ooo 377,40S ('.>9,143) Eskdale-Giaborne— Glaborne-Waikokopu 1,898,000 535,249 (53,405) "Waikokopu-Wairoa . 035,000 607,8-11 (25.053) "Wairoa-Eskdale 2,3;>8,000 1,855,814 (38,797) 4,871,000 2,988,901 (40,427) Okahukura-Tahora .. 2.259.000 1,707.580 / . . (54,434) South Island M.T. .. 2.581,000 193.631 (33.961) ' "Westport-lnangahua . 877,000 373,398 (33.731) Kawatiri-Inangahua . 1,853,000 187,500 (39.817) Totals . .. £13,031,000 £6,465,350 (£39,812) The anticipated results from tho several sections are shown in the following sum-« mary, which comprises estimated gross ro'venue and working expenses, and the operating loss or profit with, in each case, the interest charge on capital cost and the total estimated annual loss: — OperEx- ating-

Kevenue. penses. Losa. ©kaihau-Ranginhua £7,(XX) fB,OOJ £I.OOO Interest and losa . . 04,tL0 35,0j0 Kirikopuni-Dargaville 9,000 10,1.0 oK'™ Interest and loss . . 20,3j0 26,1)70 Gisborne-Eskdale . 60,876 103,459 39,5?3 Interest and loss . 243,550 283.133 Okahukura-Tahora . ,^9 - 700 39,700 Interest and loss . . 112,9a0 15j.,600 South Island M.T. . 112,300 77,140 35.160* Interest and losa . . 135,1 jO 105,030 AVestport-Inangahua 43,0 CV 3G.GCO 7,000* Interest and Io3S . . 43,850 36,850 Kn watiri-Inangahua 38,200 18,800 10, COO Ihterest and losa . . 92,650 103,250 'Estimated profit on working. The total estimated- revenue is £270,376 end the expenses £320,269. leaving a losa of £49.8.93. With the addition of £637,660 interest charges the annual loss is £737,553. A further table gives the following com parison between lines under construction and lines open for'traffic . New Lines Onen Lines '■ Per Mile. Per Mile Average coßt* .. £39,R!0 £14,109 Interest charges .. 1,992 610 Operating earnings .. 790 2.274 Operating .expenses .. 936 2.053 K"t operating earnings 1461 191 Net loas .. .. 2,138 419 •Exclusive of rolling stock. fLoss on operation II North Auckland Lines. A brief review upon the construction of eacjh section is given as follows: North Auckland Main Trunk railway, Okaihau-Rangiahua extension (14 miles 9 chains). This line is an extension of the lirie from Otiria to Okaihau (24 miles 42 chains).. It is constructed through the most treacherous piece ot country on •which railway construction has been u/idertaken in New Zealand. The major earthworks are nearing completion and it is thought that the worst slip movements have bean overcome R;iils have been laid for 10 miles. The line may be expected to give operating results very similar to the Otiria-Okaihau section. Dargaville branch, final section, Kiri-kopuni-Dargaville (17 miles 49 chains). This is the uncompleted portion of the Waiotira-Darg'aville line, tho estimated annual loss on which is £87,000, and will be. the connecting link betwen the Kaihu sfection and the North Island main lines. The Tangowahine section (lOj miles) is practically complete and goods traffic is being conveyed over it. On the Dargaville section (7£ miles) formation is complete for 5i miles and plate-laying for miles. Four bridges have yet to be built. The East Coast Railway.

Napier-Gisborne railway, Eskdale-Gis-l)orne (120 miles 39 chains). The line between Eskdale and Putorino (26 2-3 miles) is just about ready for opening. Traffic has been carried over this section for some time past. Between Putorino and Wairba (33 miles) formation work has been completed for all but two miles, which should be finished in about six months.- Two large viaducts have yet to to built, one of which t Maurigaturanga) will be complete in 15 months, and the ot'J}er (Mohaka) about 15 months later. These works are tho chief factor in the completion of the line, which should, therefore, be ready for opening Putorino to AVairoa in about two years and a-half. Stratford Main Trunk railway, Qkahu-kura-Tahora section (41 miles 40 chains). This section is the final link in tho Stratford, main trunk connection. At *he western end, 3 miles 30 chains between Tahora arid Tangarakau should be ready for opening about January, 1931 Of tho remaining 4 miles 50 chains at tho yvostem end, 50 per cent, is tunnel. Two tunnels have been completed, a third is more than half done and the fourth and last tunnel hits • the bottom heading well under way. Only about 20 chains of ■ formation have still to bo done at the oastern end miles). The line

has been completed between Okalmkura end Ohura (19 miles 10 chains), arid traf-

fie has been carried over it by the Public / Works Department for some f ime Beyond Ohura the rails have been laid for 53 miles. There are five tunnels, aggregating 95 chains in length, of which 46 chains have been completed Formation bas also been completed except for about TO chains of heavy work. Several bridges bave yet to be built. Diversion of Traffic. A considerable proportion of tho traffic (inw carried via Marlon between the Main Trunk line and stations north of YVangaDui will be diverted to the new and ihorter route, resulting in a substantial loss of revenue which will, however, be let off very largely by the reduced haul iKe costs and by any additional traffic ihat may be developed On this basis the oss will be equivalent to the cost ol working the new line, plus interest tharges on the capital cost. /South Island Main Trunk railway, JVharanui-Parnassus section (76 miles). At tho northern end, four miles of formaiion; were completed several years ago. I kn additional length of eight miles is now ii progress, and arrangements are being nade to start work on a 27-chains tunnel inder the Hawkswood Saddle. At the fttttnern end formation is in hand for four fcueß..'. ;The permanent line has been uur-

voyed for about 30 miles south of Whflift nui t and for about 10 miles north of lar

missus. The estimated revenue is based on the assumption that 60,000 passengers per annum will travel between Wellington and Christchurch by the new route in preference to the Wellington-Lyttelton route. In estimating tlie expenditure, due allowanco has been made for the fact that the existing train services would be adequate to carry the additional passenger trallie between Picton and Blenheim and between Parnassus and Christchurch. The Buller Gorge. The Westport-lnangahua railway (26 miles) will connect the Wostport section with the South Island main lines. The line is completed between West port and Cas cade station (nine miles), and tiaflic is being carried by tho Public Works Department Beyond Cascade, formation is in hand tor 12 miles, of which 6£ miles have been completed. Ihe rails have been laid for 75 chains beyond Cascade. Bushfelling and clearing have been done wejl ahead of the formation work. At the lnangahua end work has been started on I be formation between lnangahua and the Culler River, and bores have been put down to obtain information regarding the ■foundations of the bridge over the Buller River. Midland railway, Kawatiri-Inangahua soction (46 miles 43 chains). When completed this section will link up the Nelson section with the South Island main lines. The line is practically completed between Kawatin and Gowan (3 miles' 73 chains). Bevond Gowan formation is in hand for eight miles, of which 4J miles have been completed. The survey of the permanent lino is completed for 12 miles ahead of the formation work.

DEPARTMENT'S RESULTS. SLIGHT GAIN IN JULY. ARREARS OF £BO,OOO THIS YEAR. Working expenses in excess of receipts are again shown in the Railway Department's account for the four weeks ended July 19, tho operating loss for the month having been £7602. In the corresponding period of last year there was a loss of £8579. Tho gross receipts for the month were £555,685, which is £8252 more than last year; working expenses increased by £7276 to £563.287. There was a loss in the North Island of £l3,oss—following a loss of £13,817 in the Juno period—as against a working profit of only £563 last year. Earnings were £281,284, or £BB3I less than last year, and expenses totalled £294,339. an increase of £4787. In the South Island increased by £14,295 to £2li,cßo. and working expenses by £2884 to £231.203. The operating loss was therefore reduced by £11,411 to £19.873. Net r evenue from miscellaneous services increased by £3185 to £25.326. Following is a summary of the net results for corresponding periods of four weeks in the last three years

1930. 1929. 19'28. April 26 . . £122.270 £107.3(15 C 130.221 M a y 21 .. .. 53.131 121.7-JG 95.200 June 21 . . .. *4.027 52.a99 51.191 July 19 .. „ *7,602 '8,579 25.200

Totals . . £193.775 £273.131 £301.831 * Lobs on operation.

The net revenue for the 16 weeks of the financial year comprises £55,706 from the North Island railways, as against £120,761 last year; £43,877 from the South Island railways, us against £72,258 last year, and £94.191 from miscellaneous services, as against £80,112 last year. The first instalment of economies announced by the Ministor of Railways came into operation on July 16, and therefore affected only the last of the four weeks covered by tho present return.