UNPROFITABLE RAILWAYS.

New Zealand Herald, Volume LXVII, Issue 20650, 23 August 1930, Page 10

UNPROFITABLE RAILWAYS.

The promised return showing the estimated financial prospects of railways under construction was presented to Parliament yesterday. On the figures as submitted the outlook is appalling. It is suggested that the seven lines on which work is proceeding will add £737,553 to the annual railway loss. As the debit balance, including interest, for the last financial year, was £1,203,000, these new lines promise to add 50 per cent, to that staggering sum. It must not be forgotten, either, that the three lines which were at the core of the United Party's election policy, the lines that were to be completed "without costing the taxpayer a penny" contribute nearly £500,000 of the estimated loss of £737,553. This is the prospect if the figures in the return are accepted. That they cannot be is revealed by analysis of the forecasted results from the 76 miles of the , South Island Main Trunk Railway. When they are examined, they appear irresistibly reminiscent of those arithmetical puzzles which begin "first think of a number." A revenue of £112,300, it is suggested, will be earned on a working expenditure of £77,140. That is to say, expenses will be less than 69 per cent, of the revenue. Last year the working expenses on the South Island main line system were 95.6 per cent, of gross revenue. Discussing railway prospects in New Zealand, Mr. F. J. Jones, formerly chairman of the Railways Board, and before that chief engineer to the department, pointed out that on the average working expenses in Croat Britain were 90 per cent, of revenue, in Canada and the United States 80 per cent. The expert who has arranged that on this section of the South Island Main Trunk line they shall be less than 69 per cent, has solved New Zealand's railway problem. He should be put in charge of the department. The section, moreover, is to return a working profit of £463 a mile, . when thfi average last year on tho 1027 miles of the South Island system was £79. In the North Island it was £348. The net earnings per milo of open lines for the Dominion, according to the return itself, are £l9l. All these figures are based on an estimate of 60,000 passengers a year. Tho FayCasey Commission reported in 1925 that 10,000 passengers a year could be expected. W r hen one item in the return reveals such features on examination, what is the value of the whole document? It serves to indicate a prospective loss that demands immediate reconsideration of tho whole railway construction policy, but it cannot be trusted to show more than a portion of the loss that will undoubtedly accrue if the present profligate course proceeds unchecked.