N.Z. RAILWAYS

Stratford Evening Post, Volume I, Issue 257, 8 October 1931, Page 3

N.Z. RAILWAYS

Sj v- —a huge national concern such as the New Zealand Railways should not be condemned unjustly as "not paying" without very critical examination as to why it is not paying. The Year Books declare positively that the "railways have never been regarded er run as a profit-making concern" with much more of the same tenor, going op to explain the various rises of rates of interest required from the railways": Even with a drop of revenue and increased expenditure, both of half a million in 1920-30, the net revenue to capital cost-was £1 12s 4d against the lowest figure of £1 Is 4d in 1922, whilst in some years the railways earned much more than the required rate. The 1929-30 drop was due' to causes over which the railways had no control—unemployment relief being one—and it is as well to say here positively that there is nothing wrong with the railways that cannot be cured.- By a process of elimination, saying what is not wrong, the real soundness of the service can be established.

Firstly, running costs (including re pairs) are not responsible for losses. These were 22.75 d per mile in 1919, when-railways paid £4 12s lid per cent. They rose to 47.4 din the railways worst year, 1922. gradually decreasing to 26.32 d in 1929, and rising to 29.61 din 1930. In 1920 these charges were 29.23 d, practically identical with 1930. and the railways paid £4 Gs lid per cent. In 1930 exceptionally heavy repairs account for the increased running charges to a great extent.

All transportation charges include much besides bare running costs and may cover extravagance. Taking total transportation charges as a percentage of gross revenue, these were 37 per cent, in 1919, 41 per cent, the next two years, rising—through wages increases—to 56 per cent, in the bad year 1922, dropping to 47 per cent, in 1923,and dropping continuously to 39 per cent, in 1929, the rise in 1930 to 44 per cent, being due to abnormal circumstances. It is clear that unpay- , ability of railways cannot be charged to the actual train-running or stationwork, though anyone with eyes in his head can see that great economies are possible in the latter. Increased cost of coal is blamed, but this comes in the running expenses, which even in 1930 were about the same as in 1920, as a proportion of receipts. Coming now to the new mileages, although construction cost has been beyond all reason, the railways could have stood the expense. It is impossible to say what new business new lines bring. Figures spreading tHe whole capital cost over open, mileage, given in the Year Books are of little •use, because the increased capital cost can be shown to be only partly due to now railways. In 1908,. 2474' miles of railway stood at about £2Ol million, a capital charge of £10,711 per mile, and in 1930, 3287 miles stood at 057 787,671 (for lines handed over to railways only), or £17,581 per mile. (The original (1908) cost carried ad facilities, stations, stores, etc., as does the 1930 figure.) The charge since 1908 lias increased by'£3,287,0 <l, or by nearly £4h,000 per mile. Since 1915, 342 miles of railways have been opened, capital charges increasing by £23,653,840, which, it it had been due to new' lines, would have meant a cost of aboift £70,000 a mile. Although a portion of one of the new lines is reputed to have-cost more than this, the average cost is nowhere near that S figure and if it were so, inquiry would be essential,-for the cost of all lines to 1919 including terminal facilities, was only £10,882 per mile. But a mere examination of what the new mileages would have cost, had they been the cause of all capital increases, will dispel any illusion on that score. Between 1908 and 1915, the total increase in capital charges against the railways works out at £16,208 per mile of railway opened in that period. Thirty"eight more miles were opened by 1919, the cost in capital charges per new mile opened being £53,522 per mile. Four years later, 45 more miles had been added, costing £91,277 per mile in increased railway capital, but. the next four year period—to 1927—saw 136 miles opened at £65,505 per mile. The 16 miles opened by 1928 would have to share two millions sterling capital increase, costing £125.210 per mile, while 107 miles in 1929 would have to meet over £5 millions increase in capital charges, working out at £50,291 per mile. In 1929-30 no new mileage was opened, but capital charges increased £1,219,073. It is clear that new railways are not the main culprit. If, however, the-increases in capital were debited to new lines it, would be equally fair to credit increases of revenue. Back in the good pre-war days, 1904-8, new mileage only "earned'" £350 new revenue, from 1908-15, £2,852, but the successive four-yearly .increases* after 1915 were £23,241, £38,648, £12,550, dropping to £5618 in 1928, to £2OBB in 1929, and 1930 showing for the first time in many years a decrease in earnings—though no new mileage was opened to create the loss.

It is to be considered whether building of ornate railway stations, workshops fit for the Great Midland Railway of Britain, and such-like unnecessary faltherals had not much more to do with the capital increases, which have, with other mismanagements, put the railways into an impossible position, and whether new building is not the scapegoat. Two windows in Auckland railway station are said to have cost £3OOO each; it would not take much saving in windows at that rate to finish some of the new lines. Head office and general charges, now including superannuation subsidy, have doubled in the past 10 years, though total employees have only increased by half (1919-1930). To abandon lines which have cost many millions is a serious step which should not be contemplated without most searching inquiry into Public Works methods and railway accountancy and even then, whatever the results, every attempt should be made to salvage all that could be rescued from the wreck. As actual train-run-ning, with repairs, costs less than half a crown a mile, all trains in, it should bo easy to run trains at a profit to the public—if not to the railways and on paper—by cutting out all unpayable station services, cutting down train crews—or perhaps by rail-motor services. At any rate both public inqury and an effort to save new construction are urgently called for. It is not so much a question of whether New Zealand can afford to complete the 1 new railways, but whether New can afford to lose what is alrear'.'./ invested in them. —I am, etc., A. E. ROBINSC.r.