RAILWAY ADMINISTRATION

Otago Witness, Issue 3754, 23 February 1926, Page 81

RAILWAY ADMINISTRATION

REVENUE AND EXPENDITURE. AN INTERESTING ANALYSE!. - At the conference* of the New Zealand Society of Civil Engineers on Tuesday Mr F. J. Jones (chairman of the Railways Board) gave some interesting particulars in regard to the cost of railway administration and entered upon an analysis of the ratio of expenses to revenue in the .New Zealand railways, making comparisons between these end various Australian systems. The effect of branch lines in decreasing the profits on the railways was also touched upon. Mr Jones said that generally it. might be said that if tho construction of a railway were financially justified it must largely benefit tho community as a whole. On the other hand there might be sufficient justification in the benefit derived by the community to warrant its construction although the line did not pay its way. In such a case the loss made was a justifiable charge against the community bene fited. Logically, if a railway were to be run as a business enterprise, provision should be made for such losses to be recouped to the railway accounts. A figure much in use with railway administrations was the ratio of working expenses to revenue. For the year ended March 31 last this figure for the New Zealand railways was 77.97 per cent. The only portions of line on which the figure came under the average were the North Island main line and branches, and the Westport section, which gave a ratio respectively of 70.61 per cent, and 70.02 per cent. The highest ratio was given on the Nelson section with 128.80 per cent. It would thus be seen that the ratio varies between somewhat wide limits. If the traffic were fairly intensive it might be kept down to 9omewhere in the vicinity of 70 per cent. nO the other hand if the traffic was sparse it was often difficult to keep it below 100. At 100 the revenue just met the working expenses, without allowing any margin for interest The problem of sparsely trafficked lines was one which all railway administrations were faced with to a greater or lesser extent, and it was one that was noteasy of solution. Given the ratio working for any particular line and the rate of interest the amount of revenue necessary to enable the interest on cost of construction to be provided could be fixed. Assuming a ratio of 70 per cent, with interest at 5 per cent., the amount of revenue per mile of line necessary to pay interest on v \o per mile capital cost would amount to £1666, and at £20,000 per mile capital cost a sum of £3333 per mile of line would be required. The actual revenues derived from various sections vary greatly. Country lines dealing with only agricultural and pastoral commnities rarely reach more than a few hundred pounds per mile revenue. A line such as th 9 Auckland main trunk line with a heavy express passenger service and a heavy goods service might reach £4OOO to £SOOO per mile. The Westport section which had a heavy coal traffic has a revenue per mile of line of £3SCO. The average earnings per mile of railway for the whole of the railway system last financial year were £2316. Of this £BB9 was for passengers and £1427 for goods, or. expressed in percentages 38 per cent, was passenger revenue and 62 per cent, goods revenue. As showing the general incidence of revenue, the following figures per mile of line were given:— North Island Main Line and Branches. Passenger revenue £1490 Goods revenue 2112 Total £3602 South Island Main Line and Branches. Passenger revenue £570 Goods revenue .. 1067 Total £1637 South Island Main Line Only, Excluding Branches. Passenger revenue .. £832 Goods revenue 1600 Total £2432 South* Island, Branches Only. Passenger revenue £IOO Goods revenue 305 Total £405 In all the passenger figures, luggage and mails, etc., were included. The above comparison showed the effect of branch lines on the financial position. A comparison with other Australian railways showed passenger revenue per mile of line as— New South Wales .. . .. £1240 Victoria 1344 Queensland 408 South Australia .. 587 Western Australia .. .. 265 Tasmania .. 329 New Zealand .. .. .. .. .. SSi) Both New South Wales and Victoria had an intensive suburban traffic, due to the fact that the metropolitan population is 45 per cent, and 53 per cent, respectively of the States population. The goods revenues, including miscellaneous, per mile of line were: New South Wales £1764 Victoria 1524 Queensland 761 South Australia ~ 1099 Western Australia 651 Tasmania 485 New Zealand 1427 Goods traffic consists of many commodities, and the incidence of tonnage in round figures was as follows: General merchandise .. .. 2,942,000 Coal, coke, etc •« 2,082,000 Other minerals 837,000 Live stock .« 430,000 Grain, flour, etc. •• ,*• 529,000 Wool .* 113,000 Hay, straw, chaff .. •• *• 92,000 Total * •*.- 7,025,000 An analysis of the cq.<t of operating showed that 21.04 per cent was due to maintenanoe of track and works; 1.60 per oent. to signal appliances; 19.28 per cent, to rolling stock; 26.39 per oent. to locomotive power; 30.04 per cent to working

charges; and 1.65 per cent to general charges.

For the purposes of comparison and to gauge the effect of increase of revenue and economy of working, the various departments are also analysed under other headings such as: Percentage "of expenditure to earnings, expenditure per average miles open, expenditure per train mile, expenditure per 1000 gross ton miles. In the maintenance of track and works, 70 per cent, of the cost -is due to upkeep of the permanent way. 15 per cent, to the upkeep of bridges and structures, and 15 per cent, to the upkeep of buildings. In comparison with other railway systems it may be said that the standard worked to is high. On express routes and considering the nature of the country worked over this is a wise provision; on some branch lines where the country was not difficult and where speeds were limited and services were sparse, there was not the same necessity.