The Rise Of Australasia

Chapter 753 - 564: The Struggle for the Budget

Building a railway is undoubtedly a hefty expense, particularly considering the premise of constructing at least 57,000 kilometers of railway over twenty years.

Some hilly areas require detours since the current technology cannot handle tunnels spanning several tens of kilometers long, hence taking detours is more realistic.

Of course, there is another solution, which is essentially to cut through mountains and fill in pits, a common practice in railway constructions worldwide.

However, this approach would increase labor and time costs. Unless it is the only option, it should generally be avoided.

The good news is, at present, the financial situation in Australasia is relatively strong with many available methods and means to raise funds.

Even facing numerous major projects including canal constructions, there’s no need to overly worry about financial issues.

If necessary, there is always the option of issuing government bonds to raise sufficient funds from the public or borrowing from other countries. Regardless, many countries will give up their position on the gold standard in a few years, causing their currencies to deflate significantly.

In fact, things aren’t as severe as they seem. After all, countries worldwide are still keen on railway constructions, and the public also holds a strong desire for it.

It’s entirely possible to adopt a segmented contracting method, subcontracting some commercial railways to the private sector to reduce government expenditure.

Most of these commercial railways are profitable. Once anyone tastes the sweetness of contracting railways, there won’t be a shortage of funds for subsequent railway constructions.

Of course, it’s still up to the government to construct railways in some mountainous areas, since these regions lack the so-called sweetness, therefore, they can’t really generate any profits.

Perhaps Minister Martin had been prepared long before the National Day, a brand new railway construction plan had been freshly baked and had already reached Arthur’s office desk.

In Minister Martin’s plan, the first five years of railway construction would be centered around the Capital Territory and Northern Australia, enhancing the railway systems in these two newly added state administrative regions.

These two regions combined require at least 7,000 kilometers of railways, allowing the total railway mileage of Australasia to exceed 50,000 kilometers.

At the same time, some defects in the current railway scope will be modified, and the construction of railway in Southeastern Australia will be improved, among other things.

It is estimated that at least 12,000 kilometers of railway will be built within five years, with an average annual construction of 2,400 kilometers.

According to the costs of railway construction in Australasia in recent years, the cost per kilometer of railway is approximately between 4,000 and 6,000 Australian dollars, which means annual railway construction costs of at least tens of millions of Australian dollars.

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However, considering that Australasia’s annual income last year reached as high as 208.7 million Australian dollars, the above-mentioned tens of millions of Australian dollars for railway construction is not a big figure.

Referencing the Department of Transportation’s fiscal funds of 8 million Australian dollars last year, this year it should be increased to at least 20 million dollars, hence fiscal stability can still be maintained.

Even though under the leadership of the British, loans from the Germans have been reduced, and even for the recent two years, there is no need for repayment.

Nevertheless, due to indemnities from the Americans, the government of Australasia still has quite a bit of extra income, which is more than enough for railway constructions.

Of course, the government will outsource railway constructions whenever possible, since there are many other areas where government funds could be spent.

After confirming the feasibility of this railway construction plan, Arthur gave the green light and ordered the Department of Transportation to immediately start the railway construction bidding and stocks public offering.

Indeed, in addition to the bidding, shares are also being sold this time around.

For this, Arthur deliberately established the Northern Australia State Railway Development Company and the Capital District Railway Development Company, selling the initial shares of these railway companies to raise funds as the start-up capital for corresponding railway projects.

Upon completion of the railways constructed by these railway companies, the profit obtained will be the return for all shareholders.

For instance, in this bidding, the estimated construction time of the railway is five years, followed by ten years of dividends, and then repayment of the principal after ten years.

From the perspective of the public, purchasing shares in railway companies is almost a guaranteed profit. And since the background of the railway companies is the government, there is no need to worry about bankruptcy.

Under such circumstances, a large number of people eagerly purchased shares in these companies and quickly raised a start-up capital of as much as 30 million Australian dollars.

According to statistics, a total of 472,000 people purchased railway shares this time, averaging 63.5 Australian dollars of shares per person.

In reality, the shares purchased by the general public are mostly around 40 Australian dollars. Because they didn’t have time to buy more shares, the bulk has already been scooped up by nobility and capitalists.

These people also know that such railways are a guaranteed profit and naturally can’t miss such a money-making opportunity.

Of course, on the whole, the railway construction can be considered as a national participation. As many as 472,000 people have put in their half a year’s work income, which speaks volumes about the public’s trust in the government.

Due to the almost nationwide participation in railway construction, the public is always keeping an eye on the progress and situation of railway construction, which greatly reduces quality issues with the railway.

Arthur doesn’t even have to worry about subsequent railway construction issues, as hundreds of thousands of the public are looking after it, since it pertains to their own interests.

Even some capitalists and nobles are more anxious than Arthur since they are waiting for dividends after the railway construction. Naturally, they are hoping the railway can be completed soon.