DARGAVILLE RAILWAY

New Zealand Herald, Volume LXIX, Issue 21289, 16 September 1932, Page 14

DARGAVILLE RAILWAY

FILLING IN THE GAP COMPLETION OF WORK URGED REDUCTION OF OTHER LOSSES The suggestion that if the WaiotiraKirikopuni railway and the DargavilleDonnelly's Crossing line are to continue in operation the published returns of costs and revenue would indicate that the filling of the Tangowahine-Dargaville gap would be a paying commercial proposition is made in the September number of the Auckland Chamber of Commerce journal. When the Railways Board decided in favour of discontinuing construction on the Tangowahine-Dargaville gap, it was clear that fairly heavy working losses on the branch line from Waiotira were likely to be incurred.if the line were continued in operation, and these would be avoided if the line was entirely scrapped under the powers conferred on the board, the journal says. There was also evidence that 1 lie reduction in working losses, if the Tangowahine-Dargaville gap were completed, as compared with the working losses from Waiotira to Tangowahine, added to those of the Dargaville-Don-nelly's Crossing line, would be virtually sufficient to offset the: interest on capital expenditure still remaining to complete this gap. This statement is based upon the following" figures :—Operating loss on Kiri-kopuni-Tangowahine line (say) at £3Ol mile per annum, £3,300; operating loss on Kirikopuni-Dargaville line, £1170; operating profit on Tangowahine-Dargaville line, £2130; interest on cost of finishing uncompleted gap at 5 per cent, equals 5 per cent on £46,000, £2300. Therefore, looking at the matter from the point of view that the capital already sunk in the line is there, and that the interest bill must continue, it would "pay" to finish the gap if the resulting economies op the Kaihu section (Dargaville-Donnelly'.s Crossing) are £l7O per annum or over. Aid to Other Lines

Such economies as £l7O per annum seem certain, especially as the present Kaihu railway will then have a substantial feeder value to the main line. It is clear, then, from the published figures, that if the Waiotira-Kirikopuni line and the Dargaville-Donnelly's Crossing line are to continue in operation, it will "pay" as a commercial proposition to fill the gap. In other words, the discontinuance of construction work on the gap between Tangowahine and Dargaville seems to have been dependent on the assumption that the Waiot'ira-Tangowahine branch would not be operated, and apparently: also on the assumption that the present Kaihu isolated section, Dargaville-Don-nelly's Glossing, would he closed. So far, however, no definite move has been made to discontinue operation of these lines. No doubt, as last year's legislation in connection, with the licensing of road traffic is not yet in fjull operation, a postponement of a. decision by the Railways Board in this matter is justifiable,' but the position is one of considerable interest. •

The foregoing argument, of course, is based on the following assumptions:—(a) That one is justified in affirming that operating losses per mile on the Kiriko-puni-Tangowahine line .when taken ovfjv, by the Railway Department from the Public Works 'Department would not be substantially different from the present operating losses on the Waiotira-Kiriko-puni line, (b) That the Kirikopuni-Tango-wahine section (at present operated by the Public Works Department) cannot continue to be operated by that department indefinitely, and that, if the Waio-tira-Kirikopuni line is*, maintained in operation by the Railway Department, the Railways Board must eventually take over the-section to Tangowahine also. System in Australia

It is, of course, obvious that certain economies of operation would occur if the line were completed from Tangowahine to Dargaville that cannot be obtained if the line were operated merely from Waiotira to Tangowahine, This being so, it would be quite possible for there to be an accretion to the operating losses on the Kirikopuni-Tangowahine line being taken over by the department and for an operating profit to emerge on the TangowahineDargaville section if and when completed. At this stage a caution seems necessary against judging the operation of a .railway too narrowly oil a purely accounting basis. In New .South Wales when the question of the closing of a branch cornes up for consideration the railway authorities have proceeded as follows: (a) Amount of interest sunk in line has been regarded as definitely fixed, \yhether the line continues to be worked or not', and is therefore disregarded, (b) Figures are worked out showing operating loss on the line—that is, revenue, Jess working expenditure without interest, (c) There is also taken into account the annual loss to tho farmers and other people using the line if the line were closed. When such an item is taken into consideration and a truly national view of the closing of the railway' is taken (as distinct from the purely railway accounting standpoint), a decision based on considerations (a) and (b) alone is often reversed, (d) There is another consideration which must be borne in mind in connection with the completion of such a line as that from Tangowahine to Pargaville, and that is the fact of competing methods of transport. On a broad national view it would be fair to take into consideration in connection with such a line the losses of capital in the form of river steamers, etc., if any, that would be thrown out of commission if the railway were completed.