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20. Throughout this chapter we have referred to the railway budget in its present commercial form; and the departmental figures have compelled us to bring in the element of depreciation, as if a special fund existed. It is not our view that the present system is a wise one. We are strongly impressed with the necessity for securing close financial control over the railway estimates, and the recommendations which we make with this object are independent of our scheme for reducing the railway to a goods basis: if the total expenditure of the railways were no more than Rs.1,200,000, it would be an obvious exaggeration to maintain a separate

" com- mercial "* budget for the Railway Department; but even if the expenditure were at the present figure of Rs.2,500,000, we should consider the separation of the budget to be dangerous. The present system is an unnecessary imitation of the practice in the totally different conditions of much larger countries. When we study the latest proposals of the department, and when we read the remark that the railway estimates are put up in too much detail, which produces a rigidity in departmental working that may be fatal to an efficient and commercial service" we are inclined to be thankful that the railway losses have prevented the building up of a depreciation fund (a second Improvement and Development Fund) which would have been at the mercy of the departmental enthusiast for experimental development.

The chief need of the Colony is strong financial control; funds and appendices, lump sum entries, and vague descriptions (such as already appear in the Estimates for Quay D): all these must go. There is no room in Mauritius for the free hand of the expert.

We recommend that the railway estimates should take their place in the colonial budget as an ordinary head, in accordance with the system previously in force. The railway revenue should, as before, be shown in a separate division of the revenue, the usual items being distinguished. This revenue should not include "services rendered by the railways" to different departments : these amounts should continue to be shown as expenditure by the respective departments, and should be deducted from the total expenditure of the railway by an entry less expenditure for other departments." The expenditure of the railways should continue to be shown in full detail as in the present railway budget. follows that the " assets," represented by the advances made to cover the railway deficits, and by railway stores accounts, should disappear. The loss must be borne, as in fact it has already been borne, by general revenues.

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There should be no depreciation fund capital expenditure and revenue charges should be budgeted for as they are required.

We do not, however, suggest that the commercial accounting of railway receipts and expenditure should be abandoned but the proper place for these figures is in the annual report and not in the budget.

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Electrical Branch.

21. We have had occasion to remark on many features of the Colonial budget which are not only inconvenient but are prejudicial to sound financial administration. A conspicuous example of this class of defect is given in the presentment of the accounts of the Electrical Branch which is nominally attached to the Railway Department.. Abstract "F" of the railway budget shows an expenditure of Rs.40,867 on two undetailed items, 117, Block telegraph, traffic control and telephone, and, 118, Electric lighting. fans and power, together with Rs.2,625 which is the share of the general railway store expenses (pay of storekeeper, clerks and Abstract H, Renewals labour) charged against this branch.

Account, indicates capital expenditure of Rs.60,232 mainly for new electrical machinery for the railway workshops, most of this having been charged originally to the 1930-31 estimates, but having been revoted for 1931-32. There are also small items, totalling Rs.3,908 for electrical appliances charged to railway capital, Abstract G. No reason obviously appears why this electrical expenditure should be divided between capital and renewals, the work for Plaine Lauzun workshop being, as we have seen ourselves, not the replace- ment of old plant, but the scrapping of comparatively modern steam plant and the introduction of an improved plant to be worked by power purchased from a company. Appendix I of the railway estimates gives a detailed statement of the staff and other charges of the Electrical Branch costing in all Rs.210,632. It is not easy to discover from what sources this expenditure is met, but a footnote to the appendix gives the clue: Rs.107.632, the items which we have mentioned, is charged to the railway estimates, i.e., this amount helps to increase the railway deficit which is represented under the item "advances to the General Manager of Railways.” as an "asset of the Colony. Rs.33,000 is charged to a mythical "Electrical Depreciation Fund" which is shown as a liability of asset " of the the railways, and is in this way passed on to be an Colony, included in the railway debt. The balance of Rs.70,000 is charged against the colonial estimates and is represented by the item under the Miscellaneous Head 22 entitled "Government contribution to the Railways."

This is a most unpractical system and we recommend that it should be stopped. We do not suggest that the administrative subordination of the Electrical Branch to the General Manager of Railways should be changed, but the estimates of the branch should form a distinct Head in the colonial budget, and should show the same details as in the appendix of the railway estimates. A note should indicate the shares of this estimated expenditure which re- present work done (a) for the railways (b) for the Posts and Telegraphs Department, and (c) for other government depart- ments. There should be no corresponding entry in the estimates

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