ABSTRACT
In the railway industry, fixed capital charges represent a high proportion of the total cost of carriage, whereas in most other industries the ratio of capital costs to prime costs is much less. The costs of operating a railway can be divided into three groups, viz.: (1) The actual out-of- pocket expenses of working any particular traffic, e.g. loading, provision of special wagons, driver’s and guard’s wages, overtime, coal, etc. (2) Fixed charges, e.g. maintenance of the plant and equipment, salaries, and a large part of the wages bill. (3) Interest on capital.
