Operation Phoenix (railway) - Funding Difficulties

Funding Difficulties

After the 1951-52 financial year, the Victorian Railways were almost £6 million pounds in deficit. Freight rates and passenger fares were increased, but the VR still did not expect to make ends meet. The program of works for 1952-53 was intended to be £12.5 million pounds, and was intended to cover the duplication of the Alamein line between Camberwell and Ashburton, track amplification between Flinders Street and South Yarra, a new Richmond station, importation of 1500 precut houses from England for railway staff, and the purchase of equipment for the use of pulverised brown coal in steam locomotives.

However loans became difficult to negotiate due to money market issues, and so the budget for Operation Phoenix was cut back to £6.8 million pounds. Capital works were slowed, with the loss of employment for many men, and hundreds of thousands of pounds of material were held in storage. Works on the Gippsland electrification was to be completed to Warragul station by 1953, but due to the funding cuts the time line was revised to 1954. 500 of the precut houses were cancelled, the Victorian contribution to joint carriage stock for use on the The Overland was cut to 6 sitting cars, and work at Newport Railway Workshops building locomotives, carriages and livestock trucks was suspended. Outside rolling stock contractors were also told to slow down, and to defer claims for progress payments until the 1953-54 financial year.

By June 1952 the rolling stock situation was:

• All 50 of the N class steam locomotive order in service
• 64 of the 70 strong R class steam locomotive order in service
• 60 J class steam locomotives on order
• 10 F class diesel shunting locomotives delivered
• 26 B class main line diesels on order
• 25 L class electrics on order
• All 30 of the Walker railcars in service
• DERM fleet refurbished
• 137 goods wagons built by the VR workshops
• 1825 open wagons built by outside contractors

By the end of that year five of the B class diesels and five more R classes were in service.