D—2

Under the heading " Miscellaneous " is included provision of £125,000 for deferred maintenance. During the year a small amount of work was performed and charged to this fund, so that the increase in the General Reserve as shown in Statement No. IS was £124,573. Allowing for a decrease in the provision for deferred maintenance from £246,000 last year to £125,000 this year, the increase under " Miscellaneous " was £252,863. This is accounted for by a rise in a number of items, the main ones being in superannuation subsidies and allowances (£57,608) and the cost of ancillary lorries (£85,437).

SUBSIDIARY SERVICES Particulars of revenue, expenditure, and net revenue for the various subsidiary services are set out in Statement No. 9a, and the following table shows the variations in revenue and expenditure with last year :

The most outstanding feature is, of course, the expansion of the railway road services. This is due to several factors—commencement of new services, extension of existing services, expanded time-tables, purchase of services, restricted train services, and the replacement of mixed trains by road passenger services. The policy of replacing mixed trains has been pursued during the year and these trains were eliminated between Waitara and Lepperton, Kaikoura and Blenheim,. Westport and Seddonville, and between Oamaru and Kurow. The only disappointing feature of road service operation was the lack of vehicles to provide for sightseeing and other special trips, but with vehicles more readily coming to hand it is hoped to increase these services during the coming year. LOCOMOTIVE FUEL Coal-supplies have again been a source of continual worry to the Department, and as a result of a further decline in supplies it was necessary to bring into operation a further reduction in train services from June to November, 1946. Due to labour troubles in the Waikato coalfields, the train services were drastically curtailed during the Easter period. These reductions, apart from the fact that it had not been possible to run a normal train service since Ist February, 1944, caused considerable difficulties in the traffic and locomotive operating branches not only in making arrangements to deal with the traffic demands, but also in the consequent alterations to normal operating schedules and staff rosters.

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Revenue. Expenditure. Amount, Variation, i 1 Amount, i Variation, 1947. 1647 with 1946. 1947. 1947 with 1946. £ £ Per Cent. £ £ Per Cent, Lake Wakatipu steamers .. 12,501 4-1,830 17-15 16,477 -3,050 15-63 Refreshment service 340,798 -25,350 6-92 333,467 -5,659 1-67 Bookstall service 205,180 +21,353 11-62 202,459 +22,656 12-60 Advertising service 47,925 +7,621 18-91 37,701 +4,943 15-09 Dwellings 159,816 + 1,550 0-98 279,598 +8,600 3-17 Other buildings 53,851 +5,848 12-18 41,002 +7,181 21-23 Road motor services 1,555,686 +456,742 41-56 1,388,787 +429,700 44-80 Miscellaneous revenue (non480,516 +46,419 10-69 operating) Totals 2,856,273 +516,013 22-05 2,299,491 +464,371 25-30