NEW ZEALAND RAILWAYS

Otago Daily Times, Issue 21147, 3 October 1930, Page 6

NEW ZEALAND RAILWAYS

REPORT OF ROYAL COMMISSION. V IMPORTANT PROPOSALS MADE. HIGHER FARES AND FREIGHTS. REMOVAL FROM POLITICAL CONTROL . > BOARD OF DIRECTORS SUGGESTED. PROBLEM OF MOTOR TRANSPORT. (SPECIAL TO DAILY TIMES.) ■ / WELLINGTON, October 2. The higher trafficratea and -widespread economies recommended in the report, of tho Railways Commission, which was presented to , Parliament yesterday, are estimated to result in an annual savins ' of £628,000. v , Drdstic changes are advocated by the commission, including the complete divorce of the Railways Department from political Control, to which end it is suggested that a board of directors should be established, serving in a manner similar to the directors of a limited liability company. Increased charges are estimated to yield an additional £334,000 -a year in revenue, and economies are expected to produce an annual saving of £294,000. •• ' The opinion is expressed that a decrease in existing fares woidd not appreciably improve short distance traffic, but a slight increase might be made in ordinary fares which, while not affecting individual passengers to any extent, would produce £45,000 in additional revenue from long distance traffic. An increase of 'id in the selling or part of a shilling is recommended for this class of traffic. A further increased annual revenue of £7491 is estimated by raising sleeping berth charges. - It is recommended that various concessions should be abolished and the prices for others raised. The disposal ,of all surplus labour is strongly advocated, the commission believing that the staff of the Railways Department is too large and that the expenditure could be curtailed by reducing the personnel. ‘ It is advocated that the grading of positions should be abolished ■ and that promotions be made solely on merit.' It is recommended that the -Appeal Board be reconstituted, the ■ final decision to be with the Minister, and the permanent head of the department to be vested with full powers of staff, control. Important changes are also recommended ini departmental organisation. It is suggested that the .two divisional‘superintendents should he done away with and- full divisional control instituted. ' , ' ' , Numerous “ outs H are considered neoeosary; The discontinuance of fion-paying services is considered essential.' . Legislatioh for the ico-ordination of road and rail traffic is urged, so'that a suitable authority/may be established to regulate the licensing and control of, motor transport throughout the Dominion. • An important feature of the report relates to a rearrangement of the railways finance. - It is recommended that a general -reserve r ' fund of £2,000,000 be built up, and that accrued depreciation of assets be provided for by writing down the capital account by , £10,000,000. 4 A further appropriation of £1,900,000 by the Treasury is considered'necessary for this.

MORE REVENUE REQUIRED. PASSENGER FARES INCREASED. TRAFFIC RATES AFFECTED. ..Increases in passenger fares by 3d- in the shilling on long-distance lines, the raising - of certain concession fares, and * additional traffic rates are among the ■ major recommendations of. the Railways Commission which directly effect the travelling public and ■merchants. The report points out that there has been a heavy falling off in ordinary passenger teaffic during the past eight years, the : decrease being caused to a large extent by the increasing use of private cars. It appeared that the diversion of traffic from the railway to the road would continue. Although the train mileage had been increased, no good results had been , obtained, The opinion is expressed that any decrease in, the existing fares would not appreciably, improve the short-distance passenger traffic, but the commission is of the opinion that a slight increase might be made in ordinary fares,' which would individual passengers to a very small extent, but which, in the aggregate would substantially increase the revenue from long-distance nassengef traffic. It was estimated that an increase by 3d in the shilling or part of the shilling would .produce another £45,000 a year. iThe earning capacity of the sleeping car is stated to be considerably less than that p! the ordinary car, and, being much heavier, it causes greater haulage , ex- . peases, - It is recommended that'sleeping berth charges be increased, and that the cnaVge for the special cars be raised from £1 to fl 6s and the ordinary sleeping cars from 12s 6d to 15s. This is estimated to_give an increased revenue of £7401. • The commission is of the opinion tliat the rates for concession tickets are low, and as in the majority of cases the fares charged by competitive services are based on the railways ordinary fares, a slight increase in the present concession rates Would not cause any loss of traffic, and would also materially increase, the revenue. While 4 the granting of reductions for holiday fares is not opppsed, it is believed that an increase of id in the shilling or part of a shilling should be made for this class of ticket. It is also recommended that trip-bearer tickets should be limited to three months for 12-trip tickets and six months for 30trip tickets. At present there is no limit on these tickets, A moderate Increase is recommended for season tickets, Id in-the shilling bei> suggested in order to give £O3OO in .increased, revenue. In view of the expense involved in running trains sometimes specially for school children, and in view of the commission’s opinion that the department was entitled to a more adequate remuneration from this source, it is recommended that an increase of 6a 8d a ticket be made . on school season tickets of all kinds, which, after making allowance for reductions in branch line services, would in-, crease the revenue by £BOOO. A minimum of six instead of 12 for sporting and pleasure parties obtaining concessions is recommended. An increased revenue of £3566 is estimated to be had by a, readjustment of the charges for- railway employees’ tickets. 4 The commission is of the opinion that traffic provided for workers in the mornings and evenings should be made to bear a greater proportion of the cost of transport, the rates now charged being unreniunerative, being lo.w in comparison withthose in Australia ami South Africa. It

. \ ... ' ' - is proposed 'that a ’ rate for workers’ weekly tickets bo introduced, ranging from Is lOd for two miles up to 5s 8d for 20 miles. These rates would compare favourably with other countries, and they would result in increased revenue to the extent of £22,060. ROAD MOTOR' PROBLEM. Motor competition is stated to have altered the whole outlook for thp charge for goods /transport. Broadly speaking, the competition from motors was confined to the higher and more remunerative classes.of railway traffic. The railway rates for tho lower rated goods were unremunerative, in gome cases barely covering the cost of transport. CONCESSIONS NOT JUSTIFIED. 10 PER CENT. ON CLASS E GOODS. 1° recommending that the annual loss of £60,000, caused through the special reauction in rates for fertilisers’, should not be borne in future, the report states that inoa conoess i° n had been in force since It also states that the concession allowed in the free transport of lime was no longer justified. Although appeals had been made to. farmers and others from time to time, inducing them to patronise the railways in this respect, there had been little effect. The commission considered that as far as ,the goods tariff was concerned the only taken in assisting to balance the .finances of tho department was the raising of the rates or the conditions of carriage on the lower rated commodities. It is suggested that local rates are the pest means of meeting competition in regard to goods transported on classified rates- that is, those charged for ordinary merchandise. . Jt is recommended thet, except in the case of grain, a 10 per cent, increase be made for class E goods, mainly comprising produce, such as potatoes and grain, etc. Ine estimated additional. revenue from this source was £12,000. “ An additional revenue of £3200 is estimated to accrue from an increase of 10 per cent, m tho charges for class F goods, such as firewood and straw and other things regarded as " scraps." - No alteration is recommended in the rates for the carnage of wool or live stock, although a slight change is suggested regarding the minimum load of f logs and sawn timber up to 75 miles. CHARGES, ON OTHER GOODS, An increase is recommended of 10 per cent, in rates covering imported coal and goods manufactured from cement. This-is estimated to produce £2600, A similar increase is proposed under class F, relating principally to New Zealand anthracite or bituminous coals, concrete blocks, bricks, and tiles. The additional revenue as a result is computed at £33,000, A 10 per cent, increase is also suggested under class Q, relating to bulk goods, such as gravel, metal,- chaff, hay, and lime; the additional revenue being assessed at The only class of goods carried under does B is New Zealand brown coal, the rate for .which appears to be in favour of long-distanco traffic. The commission recommends an increase of 10 per cent.

up to 100 miles, and a gradual increase of 15 per cent, is suggested. The estimated additional revenue, is £65,000. It is recommended that lime which, hitherto was carried free for farmers up to 100 miles be subjected to the class F rate, and that should it be decided to grant some concessions by means of lower rates the loss in revenue should not be borne by the Railways Department. The additional revenue is estimated at £30,000. Road metal for local bodies is carried at five-eighths of the Q class rate, but it is recommended, that the /full rate be imposed,. the additional revenue being assessed at £29,000, - . It is also suggested that if any conces- .; sion is granted the Railways Department should not bear the loss. For the carriage of fresh fruit and vegetables there is a maximum rate of 32s fid per ton for all products consigned for 211 miles or over. The commission recommends that the scale be extended to 300 miles at a rate of 5d a ton for each .five miles. The rate at 300 miles would be 40s, and a further 10 per cent, is to be added to the rate.s, The estimated additional revenue is £13,200, Regarding the' carriage , of artificial manures and raw material, except lime fpr the manufacture of artificial manures, a reduction of 40 per cent, on the class E rate for six-ton, lots and over was made in 1920, and it is recommended that the full rate be restored. Should some concession be allowed the commission considers the Railways Department should not have *°Tha "extra' revenue under this heading ip estimated at £61,000. HIGHER CHARGES FOR MAILS. The commission was ashed to consider ’ whether the existing arrangements for the carriage and delivery of parcels and goods were the best from the viewpoint of the net earnings of the railways from that .source, ana to inquire into the necessity of meeting; competition and co-ordination with the Post Office. It is recommended by the commission that the collection and delivery ef goods carried by rail be undertaken, by toe Railways Department between towns where it is desirable to combat motor competition, and that where necessary local rates be made use of, the department to co-operate with existing carrying firms, either at agreed-upon rates or by calling tenders rather than to establish a departmentally-operated carrying ■ New rates are recommended in making charges, for services given to the Postal Department. The effect of the' new schedule is shown by the fact that it is estimated the revenue from this source would be £154,740 against an actual payment of £117,867 in 1929-30. DEPARTMENTAL HOUSES. INCREASE IN RENT. 25' all-round increase by one-third, in rentals for departmental ho,uses is recommended by the commission. It : suggests that the rental basis should be fixed on square footage, but oven "to it is esti-. mated that the loss in this connection will be £40,000 a year. It is not considered desirable to fix toe t|tes so that interest and fixed charges on toe capital cost would Be obtained. It is pointed out that there are about 3617 departmental houses, the capital cost of 'which was £1,883,469, .and including the land specially acquired £2,094,487. For .the year ended March 31 last the rentals totalled £109,000, or 5.23 per cent, of the capital cost. POLITICAL CONTROL. The commission recommends that the railways should \be completely removed from political control. ; “The endeovour to effect joint control of the railways,” states the report, “is unfair both to the Ministerial head and to the management ” ; and it is submitted that the further the functions of the Government of the country and the control of railways can be separated the better will he the result of the railway operations. The commission’s recommendation is that legislation be enacted to provide for the appointment by toe Governor-in-Coun-cil of a board of directors, and that this board be given full, and- complete over all the operations of the department, including control of the staff. Discussing this proposal, the commission points out that, in practically every country of the world, it has been shown that the . best result is not obtained through , an intimate control as between management/ and Government. , “The position in the Dominion calls for drastic and immediate action, and the transfer of the management- to persons not subject to political influence. / COMMERCIAL MANAGEMENT RECOMMENDED. 1 “To illustrate the necessity for sound management and the call for commercial considerations in dealing with the operations of the department, it is submitted,” continues the report, " that definite action would have been taken by commercial interests as the result of the following figures extracted from the railway accounts:— Gross revenue; 1926, £8,101,221: 1930, £8,288,115. Gross expenditure: 1920, £0,468,428: 1930, £7.358,858. “In four'years the gross revenue of the department increased by only £186,804, whereas toe expenditure increased by £890,430; in effect, a cost in excess of the increased revenue earned of £703,536. It is suggested that such a position as this would not arise in a business conducted as a commercial enterprise. A hoard of directors would cost the department, including office and travelling expenses, not more than £4OOO, and the, commission has in mind men who would give their services in, a similar" manner to those of ordinary company directors. As regards future capital expenditure,' toe board would be subject to the vote of the Legislature. ORGANISATION INEFFICIENT. The commission gives a definite negative to the question™ Whether the general organisation of the department is such as to produce the maximum of economy and efficiency in administration and operation,” The report points out that the Minister of Railways has vested in himgeneral control of the policy, and also takes an active part in the administration. He is the final authority /on matters of policy, rates of pay, conditions of employment. On staff questions, the power of the general manager is restricted, and both the decisions of the general manager and the Minister are subject to final review by the Railway Appeal Board. “This," says the report, has a far-reaching and prejudicial effect on the efficiency of the department, and also on the financial results obtained. In the opinion of your commission it is essential that the management shall have control of the staff in respect to employment conditions, service discipline, and 1 all other matters which affect the economij ca! operations of the department,” Reviewing the general control of the department, the commission finds that the , present system is neither departmental i nor divisional, and it approves of the plan of the general manager for full divisional control of the railways, with district divisional superintendents at Dunedin and Christchurch in the South Island, and at Wellington, Auckland, and the central area in the North Island. Each would have a complete establishment, including a traffic manager, engineer, locomotive engineer, and accountant. The administration would 1 be more effective, and -there would be some economy, ROAD MOTOR COMPETITION. The general recommendation applicable to goods traffic is as follows:—" That road and rail traffic be co-ordinated, that legislation be enacted to provide for the establishment of a suitable authority to make regulations for the license, control, and regulation of motor transport through, out the Dominion.”

THE RAILWAY STAFF.

A REDUCTION SUGGESTED. A considerable portion of the report deals with the railway staff, and there is a recommendation that the staffing be reduced by disposing of all surplus labour, for it is in excess of requirements. The surplus men in the workshops from November, 1920, till October, 1928, cost £45,753 in wages, and the commission is of opinion that if the department employs men for relief of unemployment it should receive the usual Government subsidy. The coat of various concessions to the staff is set out, and the commission recommends a complete revision of staff conditions and staffing, so that salaries and wages will bear their proper relation to revenue. Matters for special attention are:— First Division, payment for Sunday duty and departmental and subsequently adding the same holidays to annual leave; Second Division, allowance for meals, correspondence, standing time, payment for night duty (including between 10 p.m. and 6 a.m.), all overtime rates before a full ordinary day has been worked, and the 44-hour week now applicable to the locomotive running branch. RAILWAY WORKSHOPS. The report .confirms information previously published regarding the large excess in the cost of the new railway workshops. It gives detailed particulars supporting the conclusion that the volume of repair work carried out in the old workshops was in excess of that done in the new, and that the new work on locomotives, cars, and vans was greater the old ahopa than under present conditions, Overhead expenses have increased all round, tho details being:— Otahuhu, £65,619, Hutt, £112.595. Addington, £9922; Hillside, £68,613. Total increases, £276,657. It is expected that the overhead will be stablised at an extra total of about £250,000 above that of the old shops. " Aseumming that the original estimated saving of £230,000 will be realised, this saving wifi bo more than counterbalanced by th’e increased overhead oxnenses, and no actual economy will accrue to the department. Further, in order to effect the saving of £230,000, a considerable'reduction in staff iVould have to be made, and, the staff, rather than decrossing, shows a decided tendency to increase.” > The report criticises the methods of costing m the workshops, and recommends complete reorganisation. It also considers that the fuff benefit of the efficient machinery is not being obtained, owing to indisposition on the part of the workmen to make effective use of tho modern machinery. More power should be placed , in. tho hands of the management to discipline or dispense with those members of the. service who do not fulfil the usual conditions of employment. Without an adequate programme ‘ of replacement of obsolete rolling stock and locomotives, the volume of work is insufficient to keep all branches of the shops fully employed at maximum capacity. The volume of repair work passing through is not nearly sufficient to keep the workshops fully employed, and the 'commission recommends that, to the extent of using the equipment to full capacity, but not otherwise trenching on work carried, out for the Government by-private firms, the railway workshops bo given the opportunity of tendering for work required by other Government departments, A reduction of one-third in the staff controlling the store's in tho workshops could be made by revision of the system, without impairing efficiency. : UNPROFITABLE BRANCH LINES. In reporting on a number of unprofitable branch lines in respect to which action has already been taken in some cases by the Minister of Railways, tho commission points out that, whatever action is taken, the interest on capital expenditure would still remain a charge against the . department. Therefore particular consideration was given to the possibly of getting revenue more nearly to meet the working costs, by readjustment of goodi services and suspension of passenger services, as it was shown that the passenger business had practically been lost. The commission was impressed, particularly in the South Island, with the evident desire of local people to prevent the abandonment of linee, ahd tl|eir keen desire to help the department in every way in securing greater uee of railway faoiUtiea in future. A general recommepdation is that train services on unprofitable branch lines be reduced to provide reasonable facilities for the carriage of goods, and that the passenger traffics be discontinued on some branches; that the Orawia-Tuatapere extension be offered to the settlers at nominal rental to be used as a tramway; and that the Eyreton branch be closed unless arrangements are made by those interested to give tho department a satisfactory guarantee against loss; and that ; a careful review of the operating results be made each period. That any line which fails to pay operating costs for a period of three months be closed. RAILWAY CAPITAL AND NEW ' LINES. The report contains a lengthy summary of the financial proposals, which include the building up of a reserve fund of £2,000,009 by charging the working account a fixed sum not exceeding £200,000 annually, and that the writing down of capital already approved by Statute to the extent of £8,100,000 be further pursued by the appropriation of £1,900,000 tO o make oo the total written off amount to On the point of new capital liabilities, due to the construction of further railways, the recommendation of the commiaeion is:— That where new lines are constructed for the purpose of developing settlement or assisting industries, they be regarded as developmental lines, and that full and accqrate accounts of all costs and earnings be kept separately, and altogether apart from the general railways account; and any losses should be met out of the Consolidated Fund. PERSONNEL OF COMMISSION. The members of the commission wereMessrs R. Masters, M.L.C. (chairman)’. J. D. Hall, R. W. M’Villy, and J. Marchbanks.