Profitable operation eroded by circumstances
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Elim nosedive by STG last year
THE Scottish Transport Group, which made a Elm surplus in 1973 had an operating deficit of £2.6m after depreciation in 1974, and a consolidated deficit of £3.2m after paying interest on long4erm borrowings.
These losses are revealed in the STG's annual report and accounts, just published.
The 1974 figures are: Road passenger transport £1,271,000 loss Shipping £1,532,000 loss Other com panies (including Macarayne Haulage) £221,000 profit The STG had an accumulated deficit on revenue rereserves at December 31, 1974, of £12.9m after fully providing for deferred taxation of £9.4m. "Such a level of deficit emphasises the need for a sound commercial approach with maintained earnings sufficient not only to meet continually replacement costs of assets but also to provide for recovery of the slippage of past years," says the report. The report looks forward to the changes resulting from Scottish local government reform. The structure of the Group is aimed at central policy-making combined with local control of operations. Arrangements have been made for each of its subsidiary companies to offer every assistance to the new regions, the overall aim being •to provide an efficient system of public transport.
An obvious worry for STG is what importance the newly formed regions will place on maintaining loss-incurring rural bus services, especially with regard to Government instructions that bus operators should increase fares to a viable level rather than work under a general subsidy. Subsidies for individual services are still clearly a necessity.
Bus operations in 1974 showed a slight increase in gross receipts, but a decrease in mileage, passengers carried vehicles and staff. Receipts went up from E42.7m to £44.4m; vehicle miles went down from 147.2m to 134.0m; passengers carried decreased from 456.3m to 395.3m, vehicles from 4,531 to 4,514, and staff from 14,877 to 14,586. 1973's operating profit after depreciation and before tax of £1.9m was converted into 1974's loss of £1.3m. A major contributing factor to this loss was the 1974 strike by platform staff which resulted in an estimated loss in net revenue of £2.1m.
Passenger resistance
Before the strike the trend in passenger carryings had shown a six per cent reduction, blamed by the report on resistance to the three fares increases, increased private car usage, and the Group's own inability to operate scheduled services in certain areas owing to staff shortage.
One bright spot in the report was the continued success of the Group's express coach services. New services introduced during the year were an Edinburgh-London day service, direct summer coaches from Aberdeen to London, and internal routes from Glasgow to Uig, Inverness to Ullapool and Inverness to Kyle of Lochalsh.
Vehicle replacement continued to be both "protracted and erratic," says the report. However, experience with the Ailsa double-decker and the Seddon-Gardner single-deck bus were both encouraging and had justified the group in placing substantial orders for both types. The overall proportion of lightweight vehicles was also on the increase. "Although such vehicles are assumed to have a shorter life, they are capable of operation on all but the most arduous of services," says the report.
The bus replacement programme for 1975 covers 341 buses at a cost of £4.2m, but based on present indications this programme will not he completed before mid-summer 1976,