THE RAILWAYS

Southland Times, Issue 21178, 3 September 1930, Page 5

THE RAILWAYS

ANNUAL STATEMENT FINANCIAL FIGURES FOR YEAR NET EARNINGS DECREASE Wellington, September 2. The Minister of Railways, the Hon. W. A. Veitch, presented his first annual statement to the House of Representatives today. He said: During the short period in which I have had the honour of administering the Department I have not had an opportunity of, doing more than adopt such measures as have been necessary to effect immediate economy. No comprehensive changes of policy will be instituted until the report of the Royal Commission, which is now investigating the Department’s operations, has been considered. I submit hereunder the financial figures for the year ended March 31, 1930. The gross income from all sources was £8,288,116, an increase of £39,078 on that of the previous year, while the expenditure was £7,358,859, an increase of £509,476. The net earnings were £929,257, as compared with £1,399,655, a decrease of £470,398.

On March 31, 1930, the capital invested in the lines open for traffic, including the steamers and plant on Lake Wakatipu and other subsidiary services, was £57,787,671, as compared with £56,568,598 on March 31, 1929, an increase of £1,219,073 on the capital account of the previous year. The increase in capital comprises £393,072, expended chiefly on rolling-stock and signal-construction, and charged against capital account under “Additions to open lines,” and £824,496 expended under the Railways Improvement Authorization Act, 1914, on work such as new workshops, etc. A sum of £699,177 was charged against revenue for depreciation and provision of renewals, and the amount expended from this fund was £339,635 for assets written off on renewals effected during the year. The accumulated credit balance in this fund at March 31, 1930, was £1,687,562. The Finance Act, 1929, section 20, provides that interest will be charged on the total amount of capital moneys expended in respect of railways, reduced by the sum of £8,100,000. The interest charges, amounting to £2,132,324, have therefore been computed in terms of the Finance Act. The interest charges for the vear ended March 31, 1929, totalled £2,331,335, and the decrease in these charges for the year under review is £199,011. The deficit on account of revenue and expenditure on the year’s working was £1,203,067, to which must be added the sum of £8,202, an adjustment of the branch line debit for 1929, making a total deficit for the year of £1,211,269, an increase of £778,526 as compared with the results for the previous year. The Finance Act of 1929 cancelled as from April 1, 1929, the credit which had been received since April 1, 1925, for the losses incurred in working certain branch lines and isolated sections, and this, together with the fact that the Railway Department was called upon to bear a higher proportion of the concession rates on fertilizers and lime, had a substantial effect on the deficit incurred in the past year’s operations. Branch Lines. As indicated in my predecessor’s last report, a thorough investigation was being made into the whole of the train services, with particular reference to the branch lines. Since I assumed control comprehensive reports have been submitted, and in view of the heavy annual losses I was reluctantly compelled to authorize the closing down of certain branch lines and isolated sections. In order to effect further economies in train operation, certain passenger train services have also been curtailed. I found that the Department in this connection had been striving to regain lost passenger business by providing attractive services over long distances, and, although train mileage had increased, there was still a decline in passenger revenue. The following table of figures will emphasize the position:—

The train-mileage increase was due to a fairly large extent, to the growth of goods traffic; but even with this favourable aspect a large proportion of the increased mileage was due to passenger services. In view of the financial position of the Department the running of several of the passenger trains has had to be restricted, at least until the busy season commences. New Stations. It is anticipated that the opening of the new station at Auckland will take place towards the end of October. Thia will enable the staff to become familiar, with the working of the station before the busy season commences. It is anticipated that the final cost of the station and yards, which includes interlocking, signalling, etc., will approximate £1,210,000, while the cost of the Westfield Deviation, including several stations en route will be £790,000, making a total expenditure of £2,000,000. The work of reorganizing the Wellington station yard is progressing satisfactorily. The completion of the Tawa Flat Deviation works and the rearrangement of the railway facilities will synchronize with the completion of the new station. The sum of £468,000 has already been spent on reclamation works and new yard accommodation, and it is estimated that £1,085,000 will be required to complete the undertaking—that is, station buildings and yard. This figure does not include the Tawa Flat Deviation. At March 31, 1930, the sum of £670,000 had been expended on this work. It is estimated that a further sum of £545,000 will be required to complet it. The total cost, therefore, will be £1,215,000. Royal Commission. With a view to investigating all branches of the Department’s activities, and to advise where economies could be effected, the Government decided to set up a Royal Commission. The order of reference was a comprehensive one,' and it is anticipated that the commission’s report will be. submitted to the Government on September 1. The commission has visited the four main centres, where considerable evidence and data have been collected. Workshops Reorganization. This scheme, covering the four main centres, is now practically completed. The original estimates in connection with it have been considerably exceeded, and it is doubtful whether the annual savings contemplated will be effected. It may be appropriate to furnish the following figures, which will indicate the position when I assumed control of the Department. On April 11, 1925, the Acting Chief Mechanical Engineer recommended the construction of—■

(1) Loco workshops at Auckland 540,088 (2) Car and wagon shops at Lower Hutt 442,134 (3) Car and wagon shops at Addington 269,571 (4) Locomotive shops, Hillside .. 391,060 £1,642,853 This estimate was afterwards increased to £1,696,000, at which figure the scheme was approved. The final capital cost is now estimated at £2,297,865, or £601,865 in excess of the original estimate. This will increase the strain upon the Department's finances and will necessitatis economy in the conduct of operations in the shojis. In his original estimate the Acting Chief Mechanical Engineer intimated that an annual saving of £270,000 would result from the new scheme; but it has yet to be proved whether this measure of economy will accrue as a set-off against the heavy capital expenditure. Coal Supplies. It is pleasing to note that, of the 476,251 tons purchased during the year, 355,214 tons, or 74.59 per cent, of the total, comprised New Zealand coal. An interesting comparison of the purchases of coal appear in a table of figures embodied in the General Manager’s Report. From this schedule it is satisfactory to note the large increase in the use of New Zealand coal since 1924-25. As a result of important tests which have been carried out for some time past, there appears to be a very encouraging prospect of our being able to utilize a still greater proportion of New Zealand coal. The whole fuel position was very complicated during the year owing to the flooding of the Hikurangi Mine and to the difficulties that arose as a result of the stoppage of supplies to the open market from Newcastle. This latter feature affected the Department more indirectly by throwing several large gas-producing concerns (which previously used a large proportion of Newcastle coal) almost entirely' on to the New Zealand market. The Department had considerable difficulty during the year in maintaining its supplies, and although it is regrettable that inferior qualities of coal had to be used, with the consequent increase in departmental costs, it is gratifying to know that it was found possible to maintain the services. It is also to be noted to the Department’s credit that it was able to render very timely assistance to some of the gasproducing concerns by allowing them to draw on the Department’s stock of coal. Garratt Locomotives. The three locomotives of the Garratt type which were imported from Great Britain are now in commission. Their working has, however, not yet proved satisfactory. Certain adjustments have been found necessary in order to fit the engines to our conditions. Some progress has been made with tests and improvements on these locomotives, and it is hoped that they will prove effective. There is no doubt about their tractive effort; most of the difficulty having arisen in connection with their coalconsumption. This can only be finally adjusted by exhaustive trials under working conditions. No effort will be spared to bring them to a satisfactory state of efficiency. Motive Power. During the year one of the Department s mechanical engineers has been abroad looking into the latest developments regarding motive power, including such matters as the application of the Diesel engine to traction. This officer obtained a large amount of very valuable information, and the data which he was able to obtain indicate that the time has not yet arrived in the development of the application of the Diesel engine to traction when we would be justified in adopting it. This officer was able to make contacts while abroad which will enable us to keep closely in touch with motive power developments, so that we shall be in a position to obtain full and first-hand information as to what is being done in this connection in other parts of the world. In conclusion, I desire to express to all members of the service my appreciation of the manner in which they have carried out their difficult duties. I know I can rely on the entire service to exercise such discretion in expenditure of money and use of materials as will ensure that all increases of revenue and economy measures will be available to put the Department into a more stable, financial position.

Year. Tran-xnileage Increase over Previous Year. 1924-25 .. .. 9,083,623 59,120 1925-2G .. .. 10,319,407 1,235,784 1926-27 .. .. 10,723,864 404,457 1927-28 .. .. 10,838,594 114,730 1928-29 .. .. 11,113,482 274,888 1929-30 .. .. 12,022,043 908,561 Passenger RevIncrease or enue (includDecrease over ing Season Previous year. Tickets.) 1924-25 . .. 2,288,571 61,029 decrease 1925-26 . .. 2,537,047 248,476 increase 1926-27 . .. 2,304,180 232,867 decrease 1927-28 . .. 2,145,296 1928-29 . .. 2,124,746 20,550 ” 1929-30 . .. 1,995,927 128,S19