Llangollen Railway

To what end precisely? AFAIK, there's no suggestion of malfeasance and given what's happened, it seems unlikely those on whose shift this occurred would be appointed to similar positions elsewhere. From my own "outsiders perspective", based purely on what has come to light, the failure would appear to be one of management oversight, perhaps placing too much faith in people and/or processes that were clearly not up to the task.

If there's a lesson to be learned, I'd venture to suggest, it's by those pining for those long vanished and in any case, often apocryphal days when everything happened on a wing and a prayer, without "procedures" and all that pesky official paperwork which comes with them.

 

+1
Also known as being made a scapegoat!

 

I wont suggest retribution, however what experience suggests elsewhere is the importance of Due Diligence in Senior Appointments.

 

But doesn't that also depend on who is doing the due diligence?

How would this situation have been avoided?

 

There are several useful threads on here explaining the difficulties of specifying and delivering repair of heritage assets where inevitably unexpected extras arise during the strip down and inspection phases and things which it had been hoped to reuse prove to be beyond repair. It is also likely that contractors may have problems with customers unable to quickly meet additional costs when such items arise. So I would suggest the "due diligence" works at many levels:
1) Does the specification and contract properly define requirements on both parties and how unforeseen items will be quickly resolved.
2) Does the customer have effective supervision and the contractor a means of quickly obtaining authority for changes which will inevitably arise?
3) Does the customer have adequate contingency to cover additional items or alternatively the contractor sufficient financial resource to await late payments so workflow can be maintained?
4) Does the contractor have an appropriate management accounting and job costing mechanism in place?

Sadly I suspect the vast majority of failures in this sort of business are down to optimism and the basic flaw of tender processes seeking lowest price which discourage the inclusion of adequate contingency funds and reduced efficiency as jobs stop and start due to customers with inadequate funds.

The role of independent non executive Directors able to ask difficult questions should not be overlooked as it is inevitable that staff at the sharp end may be reluctant to admit difficulties at an early stage and optimistic about overcoming these which a truly independent assessment might not support.

 

All true, but there's a bigger issue here - the role of engineering within the entire Llangollen set-up - which is I think at the core of the questions asked by Martin and others. The answer to that question is about experience and judgment, not structure. When directors were appointed, what were their skills and qualifications? How did the board and management operate their oversight of the operations of the railway? Were they open to alternative interpretations of events?

Reading between the lines, I suspect that it's a combination of these factors that combined with events - staff changes, problems with engineering quality, Covid - to bring about the insolvency, not one big event. I'm very conscious in the voluntary roles I do that it's a world of "there but for the grace of God go I", as limited resources and reliance on those volunteers who are willing to give up their free time can easily leave gaps in which problems can develop.

Those who were at the helm as the Llangollen drifted will be known by those who need to know, and their reputations will be affected accordingly.

 

A very good recent example in a Beamish blog: "Once the assessment work had been completed, we were now reasonably well informed as to the condition. However, there were some nasty surprises still awaiting us."
http://beamishtransportonline.co.uk/2021/05/dunrobin-ten-years-on/

Patrick

 

It's not possible to agree with this enough times. It is the weakness of pretty much all purchasing organisations to properly understand, manage and price for risk.

All businesses take risk. Sometimes they come home to roost, if they all come home at once, the business goes bump. The question for the counterparty is balancing that risk against the cost of not undertaking the transaction.

 

A major failing at the Llangollen workshops that no-one seems to have addressed in the preceding posts appears to have been quality control. The Patriot progress logs detailed a number of failings and the SRPS photos of the "Morayshire" flue tubes provide a number of examples of poor workmanship that should simply not have been passed if an adequate in-house inspection and reporting regime had been in place. It's a point that many railways who are not doing contract work would also do well to pick up on. I suspect that most rely on their skilled employees to know what they are doing (in other words, carry out self-regulation), but even the most skilled ones might have an off day and do something that is substandard. Our industry as a whole probably needs to up its game - or at the very least examine how it provides its quality assurance.

 

The interesting question was how much was the QC work "value-engineered" out? It's LL Plc's risk (up to any cap on liability agreed), but if the purchaser had "saved" on the QC, then they have got a poor bargain...

One issue with QC is the lack of documented process - see the discussion on split pins elsewhere. Lots of people had strong opinions on the "right" way to do them, but no-one could point to a document that set them out. It's hard to say if it's done properly unless you have a definition of "proper"

 

Indeed, although even I could see what was wrong with the D49's boiler without anyone needing to explain it to me, and I know very little about that sort of thing!

 

At the risk of splitting hairs, , how to go about opening a split pin should be a documented process, in the form of a standard operating procedure (SOP), whereas a quality inspection should document that the SOP has been followed. If selling services, though, documentation is key to avoiding strife-free contracts and I'm sure that it will become more prevalent.

 

I’ve driven past several times over the years, and ashamed to say never had the opportunity to stop. It’s not a particularly touristy area and so relies on people making the effort to travel, rather than passing trade.

However I think the same could be said of many other heritage lines, and they manage ok. The likes of Swanage and Paignton are lucky to be in tourist hot spots, but others such as the the Mid Hants and Bluebell are more off the normal tourist track.

I suppose what doesn’t help is the remoteness of Llangollen, whilst Mid Hants and Bluebell etc can attract visitors from large towns and cities not too far away.

 

Llangollen not touristy, who are you trying to kid. It has at least ten hotels in the immediate area. Just up the road are the Cities of Chester, Liverpool and Manchester. Llangollen might not have a sandy beach, but there are many visitor attractions in the area.

 

Its 64 miles from the centre of Manchester to Llangollen, a bit less than the distance between Leeds and the Yorkshire east coast resorts. That doesn't stop thousands of people making the journey every day in summer. Liverpool and the Merseyside conurbation is even nearer That's a pretty large potential visitor audience.

 

For us railway minded folks, unless there's something of interest being staged, Llangollen is a bit off the beaten track, but don't forget, gricers are but one target customer base.

Believe it or not, Llangollen does have other attractions. Cultural events are big business locally, as is trade from canal traffic and the 'outdoors activities' brigade. It hardly needs saying that the past year hasn't been the easiest and when you add in the woes specific to the LR, the line (along with many others) does have a mountain to climb, but it occurs to me that the principal challenge is now one of effectively marketing both the area and the line.

Better news is that, by definition, this means the railway isn't the only local attraction seeking to get the punters back. It'd be both unexpected and disheartening to learn there's no concerted tourist drive going on. As I've stated elsewhere, none of our heritage lines exist in splendid isolation. All are part of the wider community and now, more than ever, underlines just how vital that obvious truth is.

 

Some very wise words above, that cannot be repeated often enough. I seem to recall that the Treasury introduced formal procedures to correct "optimism bias" in government projects (for IT, military equipment, etc), but still without solving problems of under-estimating project resource and timescale requirements, and not allowing enough for "unforeseen difficulties".

Back to the Llangollen Railway, their 2019 annual report and accounts lamented that "engineering again showed a substantial loss due to two contracts being massively underquoted." It did not identify which contracts these were, and I have no idea whether this was the complete cause of the Llangollen problems.

https://s3.eu-west-2.amazonaws.com/...f59541cf04e8143dc1ee55e5887412432b75db7605a7d

I see that the Companies House web-site now includes a "Joint Administrators Report & Statement of Proposals", dated 30 Apr but only posted on 17 May 2021. This is a lengthy and detailed document that is best examined by people with more business and accounting knowledge than me. But a few points did stick out.
- Total liabilities are at the high end of estimates given in this thread.
- The cost of administration is itself estimated at £146K.
- Previous directors had provided £160K in loans to keep the company afloat, something that showed commitment and should be borne in mind by those who want to lynch people who perhaps made errors of business judgement in the lead-up to the company's insolvency.
- The administrators had estimated the value of rolling stock and plant at £261K, but realised approximately £500K in the auction.

https://s3.eu-west-2.amazonaws.com/...f83db1a6bf5f79e784021ba6725db7384728b9e958a04

PS: Sorry for these long web addresses - I just hope that they work!