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Reference -
C.O.882/12
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these figures it cannot be correct to assert that to close down passenger traffic will only reduce the loss of one million attributable to this traffic by Rs.160,000.
The costing figures have been prepared carefully and completely by the Railway Department, and this has very much facilitated our task. It is necessary to compare them closely with the later figures now furnished.
The latest estimate of the effect of a reduction to a goods service is as follows:-
Expenditure
Depreciation
Pensions, etc.
Total Revenue
Deficit
Passenger and Goods. (Average existing conditions.)
Goods
only.
Rs.
2,256,459
260,000 99,000
2,615,459
1,904,800
Rs. 1,168,534 316,425 227,594
1,712,553 1,152,578
Rs.710,659
Rs.559,975
This estimate means, therefore, that the curtailment of service would reduce the loss from Rs.710,659 to Rs.559 975. A saving of only Rs.150,684 is, as we have said, astonishingly small in view of the known facts of passenger costing.
But we must note the following initial points
(a) The depreciation charge is, in any case fictitious as there is no actual fund but there is no reason why the figures should be increased by Rs.56,425 in the case where goods traffic only is run, inasmuch as the train mileage would then be far less than half the present figure.
(b) Not only is the passenger revenue deducted but also all the parcels traffic, amounting to Rs.80,000, while Rs.50,000 is deducted from the general goods traffic. This is unfair comparison.
(c) In the statement quoted the real comparable figure of deficit, if goods only were carried, should be Rs.373,328, com- posed of Rs.128,594 for extra pensions and Rs.244,734, which is practically the same figure as the normal estimated demand for depreciation.
(d) A large part of the item for pension and gratuities is non- recurring.
On these figures our conclusion is that the receipts from goods traffic would balance expenditure, but (1) could not provide for depreciation and (2) could not pay for extra pensions. On the other hand no provision is now made for depreciation, and the provision
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required would be far less when there was much less traffic, and secondly, the terminable charge for extra pensions and gratuities cannot be given the effect of a permanent deficit, and used as an argument against any change.
We find good reason, therefore, for thinking that the alternative of reducing the railway to a goods basis is not an alternative which can be brushed aside on the ground that it would produce little or no saving. On the contrary, we consider that the Railway Depart- ment's own figures establish a prima facie case for reducing the deficit by closing down passenger traffic.
7. Turning to the figures of expenditure, we are prepared to accept in their general lines the statement of cost which the Rail- way Department has prepared for the scheme of a goods service. We note that these figures were prepared by the late Acting General Manager, who has been in charge of the Railway for more than two years, and has had experience of its detailed operation. There are no other authoritative figures. We must qualify our general acceptance of them, however, by stating that they appear to us to be open to the same charge of inflation as those furnished with regard to depreciation. Using the costing figures of 1930-31 and excluding special charges for the Bois Cheri Light Railway and the proportionate share of net revenue and depreciation, we find the following figures for goods expenditure divided between dependent (or direct) charges and independent (or overhead) charges.
Dependent. Independent.
1930-31 Proposed
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Rs. 382,091 382,091
Rs. 384,409
765,409
The comparable amount allotted by the Railway Department to the goods service, if no passenger trains were run, is Rs.1,147,500. We can deduct from this total the same dependent costs, Rs.382,091, for there is no reason why the actual running charges should be greater than before. This would leave Rs.765,409 representing the independent charges of the new goods service. Consequently the departmental scheme has the effect of doubling the overhead charges. We are well aware that if goods were separated and passenger services closed down the goods would have to carry a much greater share of overhead charges, but to double the independent charges, as is proposed, would mean a transfer to goods of much Inore than half the amount which last year was allocated to the passenger traffic.
The Acting General Manager informed us that the expenditure which he proposed for the goods service was not based on the costing figures, but represents the actual expenditure item by item which
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