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The New Zealand Railways Magazine, Volume 2, Issue 8 (December 1, 1927)

Rate Fixing for British Railways

Rate Fixing for British Railways.

The close of the present year marks the passing of an era in the history of railway rating at Home. For five years the railways have been wrestling with the rates ploblem allotted to them by the grouping Bill of 1921, which called for the fixing of conveyance rates on such a basis as to yield to each group a net standard revenue comprising the net receipts for the year 1913, with certain allowances, in respect of capital expenditure incurred after 1913, capital expenditure which had not fully fructified in 1913 (and was consequently not reflected in the receipts for that year), and economies effected as a result of grouping. Now the rating experts have completed their task, and the Government Tribunal has decided that the new standard charges shall come into operation on January 1st, 1928.

First the net standard revenue had to be established, and then the expenditure had to be ascertained for the first year in which the new rates would operate. This proved an especially difficult matter, for the expenditure, including page 19 provision for the renewal of rolling-stock and track, had to be related to the estimated traffic of a future year. The addition of the net revenue and the estimated expenditure gave the gross receipts. Standard rates for twenty-one classes of freight, in place of the existing eight classes, next had to be prepared, which, when applied to the estimated carryings of the normal year, would yield, with the product of the exceptional rates and the receipts from passenger traffic, a figure representing the gross receipts.

The sum of £196,632,901 has been agreed upon as the total standard revenue to be raised by the four group lines, with net revenue £50,075,847. To secure this revenue, Home goods rates are to be approximately sixty per cent. above the base rates operative on January 14th, 1920, or roughly the same rates as are at present being levied, and which were introduced last February to meet the heavy losses sustained through last year's labour troubles. On the passenger side, the existing fares of 2½ d. per mile first-class, and 1 1/2d. per mile third-class, are to be standard. (These are higher than the New Zealand standard first and second class fares. -Ed., N. Z. R. M.)