D—2

SUBSIDIARY SERVICES Particulars of revenue, expenditure, and net revenue for the various subsidiary services are set out in the statements at the end of this report, and the following table shows the variations in revenue and expenditure with that of the previous year :

f Those factors which have governed the financial results of purely railway operation have also, in general, governed the results of the subsidiary undertakings ; that is to say increased costs of labour and materials have not been accompanied by corresponding increases in charges. . The loss on the operation of the Lake Wakatipu steamer services increased slightly, and charges on these services were increased at the same time as rail charges generally--i.e., 15th May, 1950. In the refreshment service the loss was £18,166, mainly due to losses on dining-room service. Charges have also been increased on these services in an endeavour to rectify the position. The bookstall and advertising services continue to show profits—in the former case reduced by £855 compared with last year and in the latter case increased by £1,961. The provision of dwellings for the staff cost the Department £199,194 over and above the rentals received. This was £51,929 more than last year. Here again, rentals have not been increased for many years, while labour and material costs have risen steeply. The increased loss during the past year was due mainly to additional staff being employed on maintenance and renovations and to the increased wage-rates. The principal item in this table, however, is the Road Services Branch. Its revenue amounted to £2,033,891, an" increase of £123,640 over last year, while the expenditure rose to £2,103,545, an increase of £220,630. Considerable improvement is now being made in the type of vehicles used in the service, 50 new vehicles having been added to the fleet. These include 15 Mack 37-passenger omnibus vehicles, 14 Leyland 33-passenger, 10 Mack 30-passenger, 3 Bedford 16-passenger, and 1 Ford coach specially constructed for the Milford Sound traffic. By the use of road passenger vehicles it has been possible over the years to improve transport by eliminating passenger accommodation on a number of mixed trains, So far nineteen rail routes have been affected. The result has been to enable the Department to operate the trains according to the requirements of the goods with consequential benefits to both the passenger and the goods operations. At the same time a saving of approximately 214,300 train-miles per annum has been achieved. The loss in operating the road services was due to losses in the suburban areas, which, in turn, were due to the low suburban fares having regard for the higher costs of operating applicable to all branches of the railways. The losses in the suburban areas were as follows : Wellington, £69,953 ; Napier, £7,804; Dunedin, £4,094.

14

Revenue. Expenditure. Amount, 1950. Variation, 1950 With 1949. Amount, 1950. Variation, 1950 With 1949. £ £ Per Cent. £ £ Per Cent. Lake Wakatipu steamers 14,798 + 1,168 8-57 20,038 + 1,445 ■ 7-77 Refreshment service ... 367,917 + 32,677 9-75 386,083 + 30,548 8-59 Bookstall service 247,707 + 399 0-16 244,171 + 1,254 0-52 Advertising service .. 62,945 + '3,272 5-48 47,073 + 1,311 2-86 Dwellings .. 181,260 + 9,176 . 5-33 380,454 + 61,105 19-13 Other buildings 64,496 + 7,796 13-76 54,463 + 7,196 15-22 Road motor services .. 2,033,891 + 123,640 6-47 2,103,545 +220,630 11-72 Totals 2,973,014 + 178,128 6-37 3,235,827 +323,489 11-11