RAILWAY LOSSES

Daily Telegraph (Napier), Volume 58, Issue 166, 15 August 1929, Page 6

RAILWAY LOSSES

,,/'Jr lour cndiDg ilarcli, IJ-J. tho lo.sses on whai are slyled clevelopracntal lines " — mainly ! dcad going from nowhere in j parUcular to similar destinations— I was over two millions. \Ye oive j not the aetual total, bufc as ifc is ; sefc out in an official return. The i hgures are as linden:- — 359 A(1 19Jb-2/ 44.3 00 1 1027-as 489.is 1928-29 770,000 Total R2, 064, 330 —This fails (0 sefc out- ihe real loss by a very substantial amount. For example, tiie figures quoted above show tliafc for the year 1927-28 the sum contributed by the Consolidated Fund— the taxpayer— to mcet losses was £489,568, bufc a later report admilted thafc, in addition to this, there had lo be taken into accounfc losses totalling £'291,452, thus making the loss for thafc year not £489,568, as sefc out in the table above, bufc £781,020. We do nofc know whether the figures for 192829 as sefc oufc in the table are as cballengeable as those given for the preceding year, and some member of the House can do sei'vice by inquiring what the real situalion'is. ' The major portion of the loss has to be debited to the South Island, which, as Sir Joseph Ward has recently sliown, lias 22 losing "developmental lines" as againsfc s'ix in the North Island. Aparfc from these dead end lines, the losses on which are nofc sliown in the Year Book for 1928, a table in thafc volurne (page 369) shows tliafc all t-lie general losses have to be debited to the South Island. In the year 1926-27, for example, while the North Island railways paid 4.02 per cent. upon capit-al cost, the South Island system gave a return of only 1.25 per cent. This, by the way, has since dropped to 18s per cent. The position is rendered the plainer by reference to the table in the Year Book for that year (also on page 369), showing the net revenue per mile of open lines. This for the Noi'tli Island is £708.76 and for the South Island only £160.04. The South Island- record, which stands practically as above over a long term of yeai's, obviously raises the question of whafc the House should do in regard to Sir -Joseph Ward's proposal for the expenditure of several millions more in the South Island for raiiway extension. We do not prejudge this. We prefer to state what, in our opinion, the att-itude of Parliament should be. Obviously ifc should demand scrupulous investigation into the revenue-earning prospects of every suggested raiiway extension. This is the more necessary when we consider the problem of motor competition. Here, however, ifc is riglit to state that the huge raiiway losses accruing in the South Island are not by any means explained by motor competition. Those losses date back for very many years, to an era long prior to the time when motor competition came to the front as a challenge to the railways. Aloreover, motor competition exists in the North Island to just as great a degree as in the South Island — this is putting the case mildly, for motor competition is "fierce" in the north — yefc, as the official figures show, while the North Island system shows annual earnings of £708.76 per mile of line open for traffic, the similar figure for the South Island is only £160.04. The difference in financial results is emphasised if we consider the two main lines and their branches. Tn the South Island the net revenue per mile of the running main line and its branches is £163.82, whereas in the North Island the similar net revenue is £761.76. Should we conclude that the South Island is over-railed? It has to be noted that the South Island, with less than two-fifths of the population, has nearly tliree-fifths of the running railways. However this is to be construed, ifc is evidenfc, in view of the enormous losses oh the railways as a whole, that new railwav proposals should be scrutinised with great care. There is one favourable condition . Sir J oseph Ward announces his raihvay policy as one for completing main lines, and for "scrapping," where f'ound advisable, the so-called developmental lines, the dead ends brought into being years ago by pollitical intrigues and wire- 1 pulling. The countiy just now is bewailing the necessity for the imposition of increased taxation. Parliament, will do well, in view of J proposals to be laid before it, tu remember that this increase is largely due to raiiway losses over a long period of years.