1975-1976 — Page 16

61.

(b)

(c)

higher revenue from passenger services reflects the impact of the increased fares and the operation of 40 new coaches, (both introduced on 4th November, 1974) for a full year compared with five months in the preceding year. fares are approximately 35% higher than the old ones which had remained unchanged since 1947.

The new

increased revenue from advertising on railway property.

As the

Following the re-construction of the Railway accounts in the year ended 31st March, 1970, the Reserve Fund from Plant and Rolling Stock appeared as depreciation in the subsequent annual accounts. amount provided for the replacement of 11 coaches was excessive, there was a surplus of $3,477,156 when this rolling stock was disposed of in 1975/76. It was considered inappropriate to credit this over-provision to the Profit & Loss Account and it was, therefore, brought directly to the Balance Sheet as "Replacement provision no longer required".

62.

In order to improve management attention to the differing characteristics of the passenger, freight and other businesses a Businesɛ

The basis of the Account has been prepared and is shown as Appendix IV. Account is to identify costs which are joint for both the freight and passenger services and therefore incapable of specific allocation to either and, after showing those costs which can be specifically associated with the two services, to show their individual contribution to the joint costs.

63.

It will be seen from this appendix that both the passenger and freight businesses make a contribution to the joint costs of $5.4 and $16 million respectively and that these, together with the income from other businesses, exceed the cost of joint activities by $11.74 million.

64.

This analysis assists in transferring attention from a charging policy based solely upon costs to one also orientated towards market considerations.

65.

There needs to be an improvement in the control of expenditure incurred in project implementation and it is hoped that the appointment of a Project Manager will make a significant contribution towards this situation.

66.

Apart from the improvements to Lo u Station ($313,900) and the installation of cables and telephones ($472,400) there was no significant increase in fixed assets.

67.

The accounts and supporting data are published in Appendices I to VII in this report.

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