71.
Freight income at $15.848 million continued to be slightly higher than passenger revenue while the proportion of non traffic revenue rose to 9.7%. The value of net fixed assets rose by $5.0 million and the return on capital fell to 10.25% from the exceptionally high figure of 29.98% in the previous year.
72.
A Business Statement is included as appendix V. Its purpose is to identify the more avoidable expenditure as distinct from costs which are wholly joint and generally invariable. From this the dependence of the railway on freight traffic can be seen with goods revenue contributing $13.47 million to joint costs against a passenger contribution of only $1.72 million. The Statement is part of a management information system aimed at developing profit and cost centres as an aid to identifying the performance of individual managers and to help in formulating commercial policy.
73.
Appendix IV further analyses the passenger business and shows that of the total passenger revenue of $15.612 million, 20.17% relates to international traffic with the People's Republic of China and 67.37% to passengers travelling wholly within Hong Kong originating or terminating their journeys north of Shatin. This demonstrates the advantage in encoura- ging longer journeys. The development of Shatin as a new town will un- doubtedly increase the usage of the railway but growth in the Tai Po and Sheung Shui areas and increased travel to and from China will give the railway a greater financial benefit which, moreover, relates to a market less affected by road competition.
74.
MECHANICAL AND ELECTRICAL ENGINEERING
All locomotives, rolling stock, electrical and mechanical equip- ment, machinery and plant were maintained to a good standard during the year, especially during the interruption to train services due to the damage to Bridge No. 11 on 25th August, 1976. within the period between the accident and up to the resumption of service on 11th October, 1976, there were only four locomotives north of the bridge, but there were no failures which testified to the high standard of maintenance. Also during this period, the Railway Workshops made sidings available for unloading food stuff and other commodities from China. In order to enable unloading to be undertaken after sunset and at other emergency yards during this period, temporary lights were installed for the temporary yards at Sha Tin, Fo Tan and Tai Po Kau. The Workshops Section also played an active part in conjunction with other sections in developing and implementing a number of projects.
75.
A comprehensive Work Study exercise conducted by Organisation and Methods Division of the Finance Branch, Government Secretariat, on be- half of the railway was carried out at the Workshops at Ho Tung Lau in the later part of the year. Recommendations including improvements in and an increase of supervision were made. The report is being studied by the Management to analyse the feasibility of implementing the recommendations.
76.
Locomotives The availability factor of diesel locomotives was 87.9% compared with 91.3% in the previous year. The comparatively lower availability was due to a greater incident of locomotive overhauls during the past year. When the railway was severed due to the need to reconstruct
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