Re: Garbage In/Garbage Out

It is interesting to note how little the numbers game has changed since 1955 when the Railways Commission reported to the then Minister of Railways, Mr Goosman, on August 27 of that year, that it was unable to recommend that the Morningside deviation, as proposed, be proceeded with. This recommendation was forwarded to the Technical Advisory Committee of the Auckland Regional Planning Authority, the body responsible for the production of the Master Transportation Plan for Metropolitan Auckland – the grand plan that overwhelmingly recommended roads, roads, and more roads as the only solution to Auckland’s growing traffic congestion.

The Railways Commission reported: “The Morningside deviation with electrification of the suburban railway system between Henderson and Papakura was estimated to cost £10,876,000…was estimated to take five and a half years to complete.”

But, “To ensure a reasonable financial return on the high capital cost involved it is essential that this modern form of rail transport receive the maximum possible public patronage, having full regard to the necessity for other forms of public transport in the City of Auckland…If these conditions can be fulfilled it is considered that 25 million passenger journeys per annum will accrue to rail in the early years of operation (say 1960-1963), increasing to 35 million passenger journeys by 1980.”

“With this patronage it is estimated that during the first years of electric operation the existing steam operating loss of £189,000 (excluding interest charges) will be reduced to £97,000. In other words, the railways will earn an additional operating profit of £92,000 per annum, which represents a return of 0.85 per cent on the net capital investment of £10,876,000. If interest at 3½ per cent on a reducing balance is taken into account, the capital expenditure involves an increase of £297,000 in interest charges, and the present aggregate annual loss of £202,000 is increased to £407,000 – an increase of £205,000.”

 

“By 1980 it is estimated that the operating annual loss (excluding interest charges) will be reduced to £25,000, as compared with £189,000 at present and £97,000 in 1960. The improved operating position will then represent a return of 1.4 per cent on the capital investment. Taking interest at 3½ per cent into account, the aggregate annual loss will be £353,000 in 1980 as compared with £202,000 at present and £407,000 in 1960.”

Then, after the disgorging of numbers which must have confused even the most awake of forensic accountants, the Commission’s report abruptly changed tack with:

“The commission is not satisfied that an effective co-ordinating transport authority for the Auckland metropolitan area can be readily established. Without essential control and co-ordination of public transport there can be no assurance that an electrified suburban rail system will attract adequate patronage, and for this reason the project cannot be considered as other than a doubtful proposition at the present time. In these circumstances the commission is unable to recommend that the project be proceeded with.”

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