RAIL SERVICES

Wanganui Chronicle, 5 October 1946, Page 8

RAIL SERVICES

PAST YEAR’S WORK NEW RECORDS SET Increased revenue from both passenger traffic and goods traffic, the handling of record goods tonnage, and a number of passenger journeys well above pre-war years is reported in the annual Railways Statement presented in the House of Representatives by the Minister of Railways (Mr. Semple). The report refers to the completion of negotiations for the purchase of equipment for the Hutt Valley electrilication scheme, and to difficult problems created in the Auckland suburban electrification project, which envisages the first underground railway in this country. A shrinkage in revenue is forecast with the return to normal conditions, which, it is stated, still seem some distance awuy.

The financial results of the past year were a g- od deal better than was anticipated, states the report. The gross revenue for the year was £15,444,847, which establishes a new record for railway gross revenue. The previous record figure was established in the year 1943-44, and this year’s total exceeded that record by £119,541. The increase over last year’s figures was £985,097, or 6.81 per cent.

Increased revenue was received from both passenger traffic (rail and road) and from goods traffic. On the passenger side, although there was a decrease in ordinal’’’ rail passenger journeys due to the closing of military establishments and the easing of petrol restrictions, this decrease was in short-distance traffic, and was more than counter-balanced by an increase in receipts from journeys on furlough passes and from long-dis-tance civilian traffic. For the year the receipts from military passenger traffic constituted 34.59 per cent, of the total rail passenger revenue. Passenger revenue from road operations increased substantially, due to the reinstatement of services curtailed for war reasons and the establishment of new services. In the case of goods traffic t-< re was a substantial decline in military freight, but this was more than offset by other increases, and both the goods revenue and tonnage constituted new records.

The handling of a record goods t' linage and a number of passenger journeys well above the pre-war years must be considered an oucs’.arming performance when regard js had to the various operating difficulties oevoiid the control of the Department. REASONS FOR EXPENDITURE. Expenditure for the 12 months amounted to £14,384,844, an increase of £1,124,567, or 8.48 per cent, over last year’s figure. The increase is due in the main to two factors’, firstly, the cost of implementing the decisions of the Government Railways Industrial Tribunal, and secondly, to the provision of reserves for deferred maintenance and track renewals. As to the first, the decisions of the Tribunal are estimated to have increased expenditure by £304,500 for the 12 months under review. As to the second, the position re-

garding deferred maintenance was that £410,500 was set aside in the year 1943-44. At the end of the year 194445 the position was considered and it was found that arrears of maintenance overtaken had been balanced by other work deferred. The matter was again considered this year, and it was found that it had been impossible to overtake arreas, and that further maintenance work which would ord narily have been carried out during the year had been deferred. Provision of a further sum of £246.000 was made to meet this position. This amount is credited to the general reserve.

A further item of increase in expenditure is the increased contribuunchanged since 1931, and increased provision was necessary to meet the rising level of wages and materials, the provision of heavier rails, and the additional mileage of track now operated.

The net revenue of £1,060,003 shows a decrease of £139,470, or 11.63 per cent., compared with 1944-45, the net return on average capital being 1.47 per cent., compared with 1.69 per cent. During the year a number of reports on projects mentioned in last year’s review have been completed and considered by the Government. Action on these reports is being correlated with and included in the planning of regional development by the Ministry of Works. The actual progress of work on the projects will 'depend upon their order of priority in relation to supply of man-power, materials, and finance.

In the case of the Hutt Valley electrification, the supply of materials from overseas is a matter of difficulty and uncertainty and it was considered that the only satisfactory method of overcoming the difficulties lay in personal contact. Mr. F. W. Aicken, staff superintendent and chief legal advisor, and Mr. P. R. Angus, chief mechanical engineer, therefore proceeded to Great Britain, and have now successfully completed negotiations for the manufacture and supply of the necessary electric locomotives, mul-tiple-unit stock, etc. UNDERGROUND STATIONS. The Auckland suburban electrified tion also raises difficult problems, particularly as the project envisages the first underground railway in this country. The chief engineer (civil), Mr. H. C. Lusty, has therefore gone overseas to investigate the problems entailed in underground operation and to obtain first-hand information on the latest developments in underground station layout and allied problems.

The year 1947 will be the first ful) peacetime year for six years states the report. During that time, principally due to wartime influences, gross revenue has expanded enormously, the revenue for 1946 exceeding that earned in 1939 by £6,099,460, or 65.27 per cent. With the return to normal contion to the reserve for track renewals of £241,989. The rate of annual contribution to this reserve had remained ditions—which still seem some distance away— a shrinkage must be expected in railway revenue. On present indications, apart from a decrease which must occur during 1947 in Army fares (particularly furlough passes), and freights, there are grounds for the anticipation of a high volume of traffic during the current financial year. Thus it is hoped that a substantial portion of the anticipated loss in Armed Services’ receipts will be made good from other sources.

Expenditure, however, is expected to increase, mainly due to the granting of additional concessions to employees, with contributory causes in higher costs of materials and stores and higher superannuation subsidy.

The net result is that it is anticipated that revenue will no more than meet expenditure, and the question immediately arises as to whether or not rates and fares should be increased Io meet the interest bill. This problem has been given full consideration, having special regard to the present-day situation and the need Io avoid inflation.

Any such increase would have a widespread effect and a tendency to “snowball.” resulting in an increase in costs of production and in retail prices. Having regard to all the factors involved. it is considered that the interest. bill should at the present time be met. from the Consolidated Fund rather than by an increase in rates and fares.