West Somerset Railway General Discussion

Please don't take this as in any way official as I don't have any insight whatsoever, or even any rumour knowledge, but there's a big green engine with 'Scot' in it's name currently resting inside Bishops Lydeard loco compound and it doesn't appear to have any main line commitments until after 60103 has completed it's stint with us next month. Just an observation, no more.

 

No.

 

When you say the NYMR offers lucrative terms, does that mean total for the period or per run? I thought I had read somewhere that (historically at least) the NYMR was reluctant to guarantee a minimum fee, preferring to use hired in power only if necessary. You can understand that a loco owner might not be very keen if he only gets paid mileage, if used, but he might be more interested if there was say a minimum fee of £50k.

 

There are also aspects of the NYMR which make it less than typical and "off limits" in the eyes of some owners.

 

I have to disagree with your last sentence. The NYMR has used this approach in the past in the belief that it is cheaper to use home fleet engines and so avoid paying hire charges. In the short term this is possibly true but look where it has got us. 80135 for example has served the railway so well, covering well over 100,000 miles, and saved us so much in hire fees. But when its time came for overhaul where was all the money saved? Absolutely nothing had been put aside for it and very belatedly a fund raising exercise had to be launched to raise the necessary funds. And 80135 is not unique in this - look at 3672 that was run into the ground before it. Surely as a preservation movement we should be factoring in the long term maintenance costs of the use of our assets rather than making what we can out of them today and forget about tomorrow. I think that you will find that most railways have an adequate supply of "home fleet "locos for their needs. It is just a pity that not enough of them are currently working and inadequate funding plays a large part in this.

Peter James

 

Hiring of Locomotives on the Dartmouth Steam Railway has very much been through necessity. With some unfortunate bad luck a few years ago & year on year increase in services, with just 3-4 blokes in the workshop all year round, re-builds can very quickly take a back seat to ensure the continuity of our services through out the year.

Hopefully in a coupe of years we'll be hiring our own stuff out, rather than hiring stuff in!

 

And the highlighted words are surely the key to this - just as on the big railway there are plenty of cases of train replacement being a threat to the viability of services, as there isn't the money in the bank to pay for replacements.

 

A very valid point made more than once in the last few days. It’s been commented on here previously that my posts have a very business oriented focus, I’ll make no apologies for that. In my opinion railway preservation has been brought to this point by non-business focused railway enthusiasts who just wanted to save something and usually achieved much, much more than even they thought was possible and we should all thank them from the bottom of our hearts for that.

All the pioneers of railway preservation did the impossible and have brought complete railways back from the dead with no money, no business models and no financial justifications, in fact most people laughed at them for even trying. But they did it and our lives are all the richer for that today. This has brought the ‘industry’ of railway preservation to the good (ish) health that’s we all enjoy today where we can, given the money build engines from scratch and run complete railways all year round (nearly).

But let’s be clear it’s an industry that has to change to face a new set of challenges going forward and the plain, bloody minded shear blind faith of the past won’t cut it in the future. The days of buying an ex-BR engine for £3,000 (a lot of money then) and throwing a fire in it are gone, today to run a railway you need much, much more revenue even after taking inflation into account and that means proper, sustainable and optimised business models.

The WSR is a £3million turnover leisure attraction which controls around £100 Million worth of assets, it like all other railways needs a robust financial structure where the assets are used correctly and the revenue covers the depreciation and wear and tear, be it track, engines or coaches. Now I’m not saying it hasn’t got one but I do feel it like many other railways looks backward sometimes and thinks like 1977 not 2017. Fund raising will always be important but that has to be directed toward one-off enhancements not routine maintenance, the Association will always have a place to act as others have said in a support role and of course us (I also call myself an enthusiast) who love railways will always be needed to run the railways and keep it true to its past, but underlying all of that there has to be a business that supports all the good stuff.

In my opinion all railways need a better balance of business and enthusiasm on their boards, the business people need to work the assets and improve the revenue and the enthusiasts need to do what they have always done so well, all in partnership for the greater good.

If you don’t think that’s the case look at the topic of the last few pages, we are all having a conversation about a WSR which is short of engines and complaining about cancelled trains, whilst also trying to decide which one engine which ‘we’ own out of three is going to be restored in the next few years and which ones to sell or leave stuffed and mounted on a plinth because there isn’t enough money or resources and all this whilst we are replacing lots of track in order to catch up on previous deferred maintenance.

With my business hat on looking at it purely and brutally as a commercial situation something has gone very, very wrong to get us to this point. Of course the WSR is not alone in this and it’s the way preserved railways are generally run so I’m not looking to be too critical, but it can’t continue into the future. Commercial sustainability and volunteer workforce are the two keys to the future and now is the time to change mind-sets to meet those challenges, that’s what the business focused part of me says and it will allow the enthusiast side of me to continue to enjoy throwing coal into a hole which is something I want to do on a lovely, expanding and thriving railway for many years to come (steps off soap box).

 

The B&W railway charge rent for every steaming day an engine dose, even though the engine belongs to the railway so this money will be able to use for the maintenance/overhaul/repairs to the engine fleet, so when an engine comes out of ticket there is money put aside to carry out the work to get that engine back into ticket.

 

Well said Andy. Every pound spent not only has to be earned but must also first make provision for direct and indirect charges such as operating costs, servicing existing debts, accruals for future maintenance and a host of other obligations.

There are a number of changes that need to be made to ensure that the WSR is fit for 2020 and beyond. Some of the changes will not be universally popular however if the railway is to prosper and enjoy sensible controlled growth then those decisions have to be made. The good news is that amongst the volunteers, we have a number of talented individuals who have a track record of growing and developing businesses along with a sharp eye for identifying and delivering cost efficiencies.

 

Which loco?

I met Mike Sherwood @aldfort this evening for a evening meal. Mike is the WSRA Trustee dealing with locomotive policy.

He permits me to say that he acknowledges that there are significant adverse matters related to the condition of 4561 that have come to light since the consultation meeting for WSRA members. He is anxious to bring these matters to the attention of WSRA members and hopes to be able to do so by the time of the WSRA AGM but discussions need to be held with a third party before that can be done.

Mike also bids me say that he acknowledges that condition assessments of the other locomotives will be necessary before sensible choices can be made between them.

Robin

 

I thought it was another green engine from the IOS stable? Or has a swap happened?

 

West Somerset Railway -Then and Now

Minehead 1927 and 2017

In this view, looking along the platform towards North Hill, the most noticeable difference is the absence of the platform canopy which arrived in the 1934 enhancements. The Goods yard is busy. Tarmac was not yet popular for platforms. Raking the gravel must have been a chore.

Robin

1927


2017

 

I suggest that this is the way of financing the locomotives that all railways should be using. Not only that but the GWR operated an 'internal trading' system so it's recreating history as well.

 

Many railways accrue money as locos are used as a way of providing for future spending on locos. I would wager few, if any, any put actual ££s into a secure account for that specific purpose loco by loco for railway owned locos.

The trouble with accruals is that they are not real money, more a marker that real money will be needed at some point in the future and therein lies the issue.

With apologies to our Accountant friends from an Engineer!

Well organised loco owning groups have more than one loco (ideally say 3) so that 1 or 2 are out earning whilst the third is under overhaul thereby eliminating or at least reducing the effects of inflation and ensuring that incoming funding is reasonably secure.

 

I suggest that it needs to be real money in a ring fenced account. As 1472 implies, I am sure that it may be acceptable to use it on other locos in the fleet now, rather than that particular loco's 10 year overhaul when it falls due

 

Just for the record the WSRA does have ring fenced funds for various projects.

 

I'm a bit late replying to this, but here goes. My understanding is that the NYMR pays a mileage fee but also negotiates a minimum mileage. In recent years this has typically been exceeded, as a result of the shortages. Ian Riley's engines have been regular visitors for over a decade and he's no mug! The arrangement was expected to continue this year but he prefers main line work and has found enough to keep them all occupied instead.

As for 3672 and 80135, I would suggest their problems are different. Both kept the railway going through difficult financial times and so were very run down at the end of their tickets, and hence there were quicker and cheaper options when it came to their overhauls. The situation with 80135 was not helped by the need for a complete new copper firebox but a start was made until problems occurred. 3672 was left till recently as it was no longer felt to be an ideal loco for the line and as I've said, it needs a lot more work than most of the others awaiting repair, but a start is being made. Bean Counter will have more to say on this I'm sure, but overhauls on the NYMR are effectively funded from revenue in the core budget - there is no separate pot of otherwise unspendable money for the purpose as some seem to be suggesting there should be. Although 80135 and 3672 may be seen as bad examples of a "run it into the ground and dump it" mentality that is not the case and actually the NYMR has a relatively short overhaul queue. The longest waiting is Lambton No.5 and that would have been started by now were it not for the problems with No. 29.

 

The assumption you make here is that the railway can earn sufficient funds out of the operation of the locomotive to pay for its overhaul and that of the carriages and infrastructure. Sadly the NYMR is far from unique in discovering that this is not the case.

The "ideal" financial situation we all work to achieve is that the operating costs are covered 100% by the operation leaving donations and other fundraising to pay for the capital expansion (additional infrastructure and locos and rolling stock and visitor facilities). By operating costs I am including overhauls of locomotives at 10 year intervals as well as the running maintenance.

In practice what we find is that "direct operational costs", the cost daily of providing the service (coal, water, running repairs, washouts, track inspections, carriage washing and brake shoes, and a million other things) are covered by the ticket sales (and often provide some surplus for re-investment). Few railways would survive long if this were not the case, not least because there would be a question about trading whilst insolvent to answer. However, the "indirect operational costs" (overhauls, major track renewals etc) are frequently, perhaps generally, un-affordable without additional fundraising. This is the reality, and so I find it hard to be critical of the NYMR in the instance you describe. It is not an ideal situation, but for 10 years they were able to enjoy the advantage of the positive cashflow impact that not paying hire fees gave.

Our railways need support beyond what they can earn from carrying passengers, that's a fact. We should strive to minimise that requirement, and to maximise the benefit from whatever we do earn or collect, but I think you are wrong when you say that the fact that all railways have to fundraise to cover what "should" be covered by revenues means we are forgetting about tomorrow. You imply poor management of the NYMR and by inference others, and I dont see that, because we differ about the starting assumption that railways can earn all they need through sales to their visitors.

 

Assuming you are talking about the Bodmin & Wenford Railway, my reading of the accounts of the operating company (the PLC) does not reveal that the PLC owns any locos, but please advise if my conclusion is incorrect. The accounts suggest that locos are hired from the Trust, so there has to be an overt rental payment to the Trust. The accounts tell us that these rentals are below market rate, which is somewhat at odds with the concept of having sufficient funds in the Trust to meet overhauls.

If a railway actually owns a locomotive and has capitalised the cost of the last overhaul (i.e. added the costs to the recorded asset value rather than expensed them), then the accrual / provision happens automatically through the depreciation charge (assuming the charge is realistic). However, as has been pointed out, this does not ipso facto produce a ring-fenced pot of cash. While in an ideal world, a cash sum would be set aside from the general account, it seems most unlikely that a railway could resist the temptation to use such cash rather than not undertake urgent track repairs. pay its staff etc, and would be ill-advised to make cash untouchable. A single purpose company, owning just a loco and with no other activities however, would find itself automatically in the position of accruing cash for the next overhaul from the hire fees revenue.

As has also been noted, being able to pay for all overhauls out of operational revenue is more aspirational than reality for many lines, so setting up a system to accrue cash for overhauls may not in reality be achievable due to shortage of said cash.