RAILWAYS’ YEAR

Taranaki Daily News, 26 August 1931, Page 7

RAILWAYS’ YEAR

A MINISTERIAL REVIEW SEARCH FOR ECONOMIES COST OF VARIOUS WORKS EXCEEDED ESTIMATES The only comment on the appointment of the Railways Board contained in the Railways Statement presented to the House of Representatives yesterday by the Hon. W. A. Veitch is a re-ference-to Mr. H. H. Sterling, general manager. The Minister commends Mr. Sterling for his offer to sever his contract with the Government and remarks that “the Government is fortunate in that it will continue to have the services of Mr. Sterling after his retirement, when he becomes chairman of the board.” The Minister reports that the gross . income from all sources during the year ended March 31 last was £7,571,537, a decrease of £716,579 on that of the ■previous year, while the expenditure • was £6,8'82,810, a decrease of £476,049. The capital invested in the lines open for traffic, including the steamers and plant on Lake Wakatipu and other subsidiary services, was £60,545,154, as compared with £57,787,671 on March 31, 1930; an increase of £2,757,463. The increase in. capital comprised £855,154, cost of the Eskdale-Putorino extension, 26 miles 74 chains, taken over on October 6, 1930, and £559,012 expended out of the vote for additions to open lines. The latter sum represented the provision .of new rolling stock, grade easements between Crichton and Lovell’s Flat, additional dwellings, .improvements and extensions to buildings and plant, workshop equipment, rearrangement of station yards, and other facilities. Expenditure under the Railways Improvement Authorisation Act, 1914, totalled £1,044,433. The new works carried out during tl;e year included the completion of the new station and yard at Auckland, new goods -filled at Wellington, and reclamation for station yard, Papatoetoe-Papakura duplication, reconstruction and strengthening of. bridges, completion of Ravens-•bourne-Burkes Deviation, telegraph and telephone lines, safety appliances, and train control. A sum of £766,073 was charged against revenue for depreciation and provision of renewals, and the amount expended from thia fund was £385,724 for assets written off. The accumulated credit balance in the renewals and depreciation fund at March 31, 1931, was £2,067,910.

PAYMENT OF INTEREST CHARGES.

The cash resources of the Railways Department were exhausted as a result of the policy which required ,the department to pay interest charges irrespective of the fact that the net earnings for the year were insufficient to meet the total interest debit. In order to meet this position a further amendment was made, and section 14 of £he Finance Act, 1930 (No. 2), authorised .the Minister of Finance to reduce the interest charges on capital where 'the annual accounts of the railways disclosed that the full amount of in- ■ terest could not be paid out of the working railways account. The Finance Act, 1929, section 20, provided that interest should 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 computed in terms of the Finance Act, 1929, totalled £2,255,345, as against £2,132,324 for the year ended March 31, 1930. The sum actually .paid for interest charges for 1930-31 was £685,000. The net earnings totalled £088,727, which amount deducted from the total interest charge of £2,255,345 left a deficit on the year’s operation of £1,566,618, an increase of £35'5,349 compared with the figures for the previous year. Compared with the previous year, the net earnings showed a decrease of £240,530. Revenue decreased by £718,579, or 8.7 per cent., while expenditure decreased by £476,049, or 6.5 per cent., notwithstanding an increase of £66,806 in the amount set aside to provide for depreciation and renewals. “Channels for economy in expenditure were fully explored in every direction during the year, and the figures given above indicate the very large . measure of success that was achieved in that connection, and there is no doubt that an even greater extent of reduction in the expenditure might have been achieved if the staff adjust-' ments that were found possible had •been rigorously pursued .regardless of any other consideration than the reduction of expenditure within the department. It was felt that, having regard to the general state, of the labour market and to the very great distress that was likely to be occasioned if a sudden, and extensive reduction of staff had been decided upon, a steady process of more or less gradual reduction was justified, even though the department were involved in some expense in . SO doing.

ECONOMICAL ADMINISTRATION.

“Consideration of the financial results for the year would, of course, not be complete without reference to the very severe trade depression that has been experienced during the period under review. So far as the financial position has been within the control of the department—and this has particular reference to the expenditure side —the record of what was accomplished during the year stands out' as a credit to the administration, while it must be equally recognised that the phenomenal drop of gross revenue which brought about the shrinkage in the net revenue was undoubtedly due to. conditions which are affecting practically every other business in common with the railways, and which are quite beyond the control of the railway administration.

“I desire to place on regard the Government’s appreciation of the achievement accomplished by all ranks of the service in meeting a difficult situation following the disastrous earthquake which occurred in the Hawke’s Bay district on February 3. The resources of,the department were placed entirely at the disposal of the relief organisation without charge, and the expeditio.iw manner in which the permanent3Way' was repaired enabled the department to facilitate the removal of re-

fugoes from the . stricken . area, and at the same time convey foodstuffs and other important necessities which were urgently required in this area. The cost of these services to the department has been assessed at £23,006.

' f' **■- LOSSES ON BRANCH LINES.

“The loss on branch lines and isolated sections was £780,299, as compared with £761,091 for the previous year. These figures include interest charges. On branch lines the loss on working, exclusive of feeder value and interest charges, was £203,604, as compared with £218,483 in the previous year. Interest charges increased from £475,/17 in 1930 to £485,512 in 1931, due to . the Eskdale —Putorino extension being taken over on October 6, 1930. The revenue on branch lines decreased during the year under review by £16,826, or 4.2 per cent., while expenditure decreased by £31,697, or 5.1 per cent. .“The working of the isolated sections, Kaihu, Gisborne, Nelson and Picton resulted in a loss of £39,131, as compared with £35,649 in the previous year. These figures exclude interest charges. The increased loss is due to the heavy decline in traffic on these sections, which in the case of the Gisborne and Nelson sections amounted to 21 per cent, and 22 per cent, respectively. Substantial economies were made in the operating of these sections, but the effect of these was not felt until a fair proportion of the financial year had passed. Further reductions have since been made in the services on these sections. on account of the decreased- traffic and also in an endeavour to reduce the expenditure to a minimum. “During the year the policy of utilising as large a proportion of New Zealand coal as possible was steadily pursued, and the ’result is shown in the fact that the proportion of New Zealand coal rose- to the record figure of 90 per cent. It must be frankly admitted than on a basis of strict economv the department would have been justified in preferring imported coal to some of the New Zealand coal at the prices at which the respective supplies could be obtained, and it will be appreciated that ndt only from the point of view of the high proportion of New Zealand coal that has been used, but also because of the circumstance I have mentioned, the policy of the Railways Department, as above mentioned, has been of very great benefit to the mining industry in the Dominion. . f “Tests were carried out with the Langer combustion appliance with a view to enabling more extensive use to be made of run-of-the-mine New Zealand hard coals and of New Zealand soft coals more particularly—in the case of the soft coals —during the summer months, when such coals cannot be used on account of sparks. The tests which were carried out by the representative of the vendors of this appliance in association with the officers of the Departments of Railways and of Scientific and Industrial Research gave results which indicated that very substantial advantages could be obtained by the use of the appliance. With a view to proceeding further with tests under ordinary running conditions, it was decided to purchase twenty sets of this appliance. The sets have now come to hand, and ten sets have been fitted to locomotives in the North Island and ten sets are being fitted to locomotives in the South Island.

ELECTRIFICATION PROJECTS.

‘‘ln connection with the construction of the new line between Wellington and Tawa Flat the question of the tractive power to be utilised on this section called for consideration. The longer of the two tunnels by this route will be two miles 53 chains long, and the standard of transport service now demanded by the public renders it a practical impossibility to work such a length of tunnel by steam with any reasonable prospect of ensuring the public satisfaction. It is practically unavoidable, therefore, to adopt electric traction for this section of the line. In considering the length of line to be electrified the question of working the Pukerua grade came under review, and it was found that by the adoption of electric traction the economic disadvantage of this grade in the working of the traffic between Wellington and Palmerston North would be very substantially nullified, inasmuch, as the electric locomotives would be able to take over the grade a load approximating that which our present standard steam locomotives can work between Paek.akariki and Palmerston North. The Pukerua grade is the ruling grade in the Wellington-Palmer-ston North area, and for some years it has been realised that eventually l something would require to be done in connection, with the easing of this grade in order to enable this very busy section of the railway to be satisfactorily worked. The adoption of electrification will, postpone the necessity of anything being done in this direction for an indefinite period. For these reasons.it has been decided to carry the electrification from Wellington to Paekakariki.

“Another aspect of this question is that the electrification will reduce to a minimum the number of steam locomotives which will require to be stationed at the locomotive depot at Wellington, and this will, of course, have a direct bearing on the conditions which will exist in the neighbourhood of that depot so far as the same are affected by the smoke that will arise therefrom. Tenders have already been called for a portion of the overhead gear, and specifications for the balance of the requirements are in hand and are expected to be finalised at an early date.

AUCKLAND’S NEW STATION,

The new station at Auckland was officially opened on November 24, 1930. The original estimate, including the stationyard, as set forth in 1924, was £550,000, exclusive of £325,459 cost of the reclamation of the site for the yard and buildings, and work performed in connection with the erection of and alterations at the locomotive depot prior to 1924. The actual cost of the work at March 31, 1931, was £1,230,645, which includes the station buildings, construction of yard, goods sheds, interlocking and signalling, etc. The estimate in 1924 was based on old designs that had been in existence for many years. . . . At the time the estimate was made no design for the station had been finalised, but. £lOO,OOO had been allowed for this. The contract price for the station building as erected, which was enlarged to provide district offices, dining rooms, etc., was £328,000. The fact that the station had to be erected on reclaimed ground caused the cost of foundations to be extremely heavy, and materially added to the cost of the building. The original estimate did not provide for power-locking and. signalling to meet modern requirements, costing approximately £84,000, Additional .car-repair

facilities were found, to be required, which had not been included in the original estimate. “The completion of the AucklandWestfield deviation synchronised with the completion of the Auckland station. The estimated cost of this work in 1924 was £450,000. The final cost to complete amounts to £770,000. GARRATT LOCOMOTIVES. “I have to record the fact that 'the three Garratt locomotives which were imported into New Zealand had not shown up to the end of the financial year any marked improvement in mechanical reliability, but that since then it has been seen" that the modifications made to two of these engines have made them fit for regular service. Unfortunately, the falling off in traffic during recent month.; has mitigated against their being loaded to them full capacity, and it has therefore been impossible to take advantage of their maximum potentiality. The capital cost of these engines was in each case £18,143 (including £674 cost of raising loan),- and to date modifications, and repair costs to the three engines have been as follows:—Modifications, £817; shop repairs, £2131; depot repairs, £1450; shop work for depots, £146. The foregoiim charges do not include -modifications and repairs to one locomotive now being undertaken at Hutt shops. It id estimated that the charges in respect to this engine will be £4OO for modifications and £l4OO for repairs. “The matter of the continued operation of the Garratt engines has been carefully considered, and it has been decided, in view of the expenditure that has already been incurred, to continue working them for a further period of, say, twelve months, with a view to giving them a thorough try-out, and more particularly in order to ascertain to what extent the latest modifications improve the operating results. “As the direct responsibility of administration of the department will in future devolve upon the board, I desire to take this'opportunity of placing on record by personal appreciation of and gratitude to all members of the service for their co-operation in the conduct of the various phases of the department’s operations during a period of unparalleled difficulty. Considering the climatic and geographical conditions in New Zealand, which vitally affect the running of our trains, it is highly creditable that tlip service has been able to maintain a sate and reliable means of transport ■throughout the country for so many years. “The unwavering efficiency and devotion to duty of the entire staff, although called upon to make sacrifices in common with all other sections of the people, is the chief hope for the future success of the department. These factors will prove to be the mainstay of the board in its difficult task of directing the service in the interests of the people as a whole and at the same time stabilising -the railway finances. “I would also like to take this opportunity of acknowledging the assistance which as Minister of Railways I have received from members of Parliament. The full and constructive criticism which has been forthcoming has materially helped in the administration of this important Department of State.”