THE RAILWAY PROBLEM.

Otago Daily Times, Issue 20289, 23 December 1927, Page 7

THE RAILWAY PROBLEM.

NEED FOR IMMEDIATE SURVEY. GOVERNMENT DEEPLY CONCERNED [Communicated . ] A little while ago—when Parliament was still in session—the Prime Minister, in his capacity of Minister of - Railways, stated that the Government was deeply concerned by the problems of the State transport services and proposed to make a comprehensive survey of the whole position during the recess. The purpose of this survey, Mr Coates explained, would not bo merely to find means of meeting the existing competition, but more particularly to ascertain as nearly as possible what would be the future needs in regard to construction. Another purpose of the survey, it was indicated, would be to de. termino whether or not operations on certain branch lines should be . continued. These proposals have been warmly supported by the president of the Wellington Chamber of Commerce, who would en. trust the necessary investigation to a Royal Commission free from all party ana parochial influence, and there is a widespread feeling among observant people that this great national problem should be seriously faced at the earliest possible moment. The Dominion has spent millions of pounds upon railways, which to-day are not paying' as much as 1 per cent, upon the money borrowed for their construction. Confronted by facts of this land it clearly is the duty of the Government to determine quickly what is to be done to place the State transport services upon a sound business footing. VIEWS OF FINANCE MINISTER. That the Minister of Finance, as well as the Prime Minister, realises the difficulties and the needs of the situation may be judged from a statement made in the House of Representatives during the concluding days of the recent session. “ So long as money for railway development was called for,” the published summary of his remarks ran ; “ then it was imperative that money must be borrowed. . . . He admitted that the question whether or not railways were a wise method of public expenditure was a problem that was becoming increasingly open to criticism, be. cause the indication in New Zealand, Australia, England, and elsewhere seemed to show that it was questionable whether railways were not going to be out of date as a method of transport. ... He agreed that the further the railways were extended the more they increased the burden of the taxpayers. . . . From an economic, point of view it would be better in the case of some railway lines to close them down and pay interest on their construction rather than pay heavy operating costs.” In view of these frank statements from so high an authority it will be interesting to glance briefly at th e country’s present commitments in regard to railway construction, remembering always that many of the present Government’s obligations in this respect are legacies from its predecessors in office. . GROWING COSTS. In the Public Works Statement for the year ended March 31, 1927, it was stated that £7,464,784 had been spent upon railways under construction, and that £13,607,518 would be required for their completion. It was expected that of these linos 157 miles would be ready to hand over to - the Railways Department within one year, and an additional 27 miles within two years, leaving many more miles in different sections to be handed over at more remote periods. In these circumstances the Government may well ask itself if it is sound business to continue spending millions a year upon railway construction while the motor is revolutionising the whole system of transport. Can it state definitely, for instance, that such lines as the NapierGisborne, Glenhopc-Inanguhua, WharanniParnassus, and similar extensions, will pay the cost of maintenance and running —without taking interest charges into account at all—when competing with motor cars and motor lorries, and even cheaper methods of transport? Five years ago it was estimated that the lines then in course of construction, when handed over to the Railways Department, would just about pay operating costs and interest on the capital expended. This, it is safe to assume, was a. Sanguine computation. Someone had to be excused for the initiation of these works. What then will be the position with higher wages, higher cost of material, higher rates of interest, and largely increased and fully established competition 7 SOME EXAMPLES. The answer to this question, so far as the cost of construction is concerned, may be indicated without niuch difficulty. In 1923 the Napier-Wairoa line was estimated to cost £1.783,666, and at that time £263,663 had been spent on the work. Since 1923 an additional £509,615 has been spent, and it is 'stimated that a further £1,200,000 will be squired to carry the line to completion. Her® is an increase of £189,615 upon the original estimate, with a corresponding increase in the annual payment of mterest, a sum sufficiently large to accentuate the much larger loss through legitimate competition. Then take the Glenhope-lnangahua line. The estimated cost'of this line in 1923 was £1,363,641. The sum of £376,417 has been spent in the construction of four miles of the track.-and it is now estimated that an additional £1.600,000 will _be required for its completion—an increase, upon the ordinal estimate, that is of £613,076. Again, the Wharanni-Par-nassus line was estimated in 1923 to cost £2,000,000, and since then £44,280 has been spent upon its construction ; but now it is stated that £2,300,000, or £300,000 more than the estimate of four years ago is required for ts completion. 40osts have gone up everywhere and of course for this development ’either the engineers nor the Government are to blame. COMPETITION. It is scarcely necessary to say that the development of the motor during the past four or five years is largely responsible for the accumulating troubles of the Railway’s Department. Before the war it was only here and there, tnd under exceptional circumstances, that the motor and the horse wagon could compete with the railways. To-day the motor can do almost anything in the way of transport the railways can do, and by its greater mobility can do many things the railways cannot attempt. Simply ; new force in the social and industrial world has arisen. Hence the problem that is confronting the Prime Minister anr' his colleagues. However they may set about the solution of this problem it will ne their plan duty to see that the country is not burdened with another mile of ohviouslv unprofitable railway construction. The Government may find a way out of its difficulties in this respect by a wide extension of its motor services. The State, having spent nearly £60,000, upon railway construction. entitled o supplement its assistance to settlement by providing other means of -nnsport on strictly business basis. Its competition with existing nrivate services however, must bo on legitimate lines. There must be no insenate waste of public money nor any unfair opposition to private enterprise.