West Somerset Railway - Removal of the PLC Chairman and related matters

I'm not so sure the dining trains are able to generate much significant extra income these days. Last year a decent operating profit was banked, but a significant chunk of that would have been spent on necessary maintenance, both heavy and light. The balance of income generated should really be put aside for dining set overhaul and refurbishment, something that is certainly becoming due.

Last year's dining operation was 98 per cent volunteer staffed. This year the kitchen function is provided by external commercial contractors. I haven't seen the business plan, but suspect there will be a sizeable dent in income because of this new overhead. Much as I would love to see the dining train operation survive and thrive indefinitely, I would fully expect its commercial viability to be scrutinised by any future plc spending review. Hard-nosed business plans don't normally leave much room for the heart to rule the head.

Fred, you will though be pleased to hear that last week's Hymek-hauled QB was advertised as sold out, with no price reduction for diesel haulage.

 

I suppose that there is no chance of the unthinkable happening?
Keep the PLC going and shut down all the support organisations and start again with one Trust only.

Seems to me that the multiple organisations are at the heart of all the troubles.

 

I am not sure that protecting tourism is Somerset County Council’s priority but more about self preservation seeing their own dire financial position. Being the Landlord it would not be surprising that they will be looking at their own assets very carefully and maybe they may once again look at the valuable seafront location of the Minehead station site. Was the suggestion put forward many years ago about re-locating a new station futher back? Hope the financial position on the WSR gets sorted as a matter of upmost priority.

 

Does that mean you didn't send me your membership fees for 2 years or you didn't join before 1974?

 

Around from 1972 but didn't join until April 1974 Ken At that time I lived 189 miles away in Hertfordshire so my visits were infrequent before I joined the Association I then came down every other weekend. I take it dear old George Hitchcock took over from you then?

 

I spent an interesting morning talking to various railway contacts. Further news that I found hard to believe but has been confirmed is that the hole in the WSR PLc finances is severe. Furthermore one suggestion is to sell the almost restored Odney Manor at a knock down price with hire back agreement to a local businessman who would also get a seat on the board. The funds raised would take the pressure offfor a year or two. Whilst I don’t doubt the accuracy of my sources has anyone else heard any whisper of such a hair brained scheme?

 

To play with the financial impacts:

The WSR's impact on the local economy accounts for a direct impact of between 5-10% of hotel occupancy, and 5% or so on cafes and restaurants in the area around the railway. I suspect SCC would not want one of its biggest tourist draws to go down and out. Especially as the Somerset Economy relies on tourism to the tune of nearly £1bn a year.

If we take the heritage railways Select committee's economic impact report that for every £1 spent on a railway £2.70 is spent in the nearby economy in some form or another...

This would make the West Somerset Railway's rough economic impact from it's £3m or so revenue and turnover for the year results in £8.1m or so wider impact on the local economy. This would be a significant drop and most certainly not in the SCC's interest to see this trade drop.

 

Short term fixes such as selling the jewel in the crown and then appointing the buyer as chairman (note the position is curiously vacant) will not make the problem go away. Unless there is radical change then it's only a matter of time before the hole opens up again and we find ourselves without the asset while pushing money out the door in hire fees.

"All revolutions devour their own children" - Ernst Rohm

 

The idea of selling any of the WSR plc owned locomotives will only result in additional financial difficulties in the future as it is well established on both the WSR and on the other major railways that owning your own stock is considerably cheaper in the long run if you wish to run a sustainable business. This is why previous Boards under the chairmanship of Dennis Taylor purchased 9351 and 7828, both requiring extensive work to return to service.

The purchase and restoration of 9351 cost £400,000, it ran 97,000 miles in 9 years and accrued £380,000 in its repair fund at a banked rate of £4 per mile (equivalent to £240 per 60 mile day). A typical hired in locomotive during the same period cost around £400 per day (typically 60 miles per day on average) or £650,000 for the same 97,000 miles.

9351 will have cost less to overhaul that the £380,000 in it's fund (this was part of the cash in the bank that used to show in the accounts at each year end), considerably less due to the part use of volunteer labour, the surplus of around £100,000 being used to part fund the boiler repair on 44422 and part fund the purchase of 4110.

53808, 7828, 9351, and 44422 all had these funds to ensure enough monies for overhauls.

The successful commercial operation of old steam locomotives requires maximising the use of volunteer skills and prudent use of the available funds to make sure that every penny counts. Motto "If you can achieve the desired result for nothing, spend nothing". In my time I was well practised in asking suppliers for a discount, preferably a 100% discount, and it often worked at the full 100%.

Unfortunately some of the present management reaches for the cheque book all too easily, and some of the present management costs more than the plc can afford, or could ever have afforded.

The suggestion of selling 4110 shocked the loco staff, volunteer and paid, to sell 7828 having just completed it's overhaul may possibly result in a backlash that the loco department may not recover from.

Andy.

 

Whatever attributes Trust Members (both PLC and Association) require on thing is certain that the principal qualification probably is having the proverbial 'wisdom of Solomon'. The post about loco sales might be the answer to a post, some pages ago, that all would be sorted and become apparent soon. Of course it has also been suggested that 4110 be sold off.
On a jocular side I wonder of the the 'business man' might be connected with the Rail Link group! Steam hauled commuter trains?.

 

This post shows a lack of understanding of the role and resposibilites of a director. Other posts on here read like a straight copy from Stalin's playbook

 

He did and I took over from Simon Bowditch, No1, as he handled the memberships until about No 30.

 

Yes dear old John Pearce thought he was getting no 1 but ended up with no 20 I believe

My first experience of the WSRA was to witness a coup to oust John Pearce orchestrated by a certain ex husband of Magda D! It became ever thus, sadly and shows no sign of stopping plc wise or whatever. We have had so many false dawns I have lost count!

 

Head...nail...hit !

 

I have just read Yorkshireman's post about selling the 'family silver' and Aberdare's response. What a wonderful opportunity and I wish I had £500K in the bank. I can buy a perfect steam loco with a guarantee of having full paid work for it, what can I then do, join the Board, demand Executive status and a commensurate large salary, make a few co-options and hey presto I have my own railway lock, stock and barrel at a knocked down price. Small step to buy back the shares and in a puff of smoke all volunteers disappear and our railway is a closed shop. Quick someone wake me up I am having a nightmare...………….or am I!

 

I'd be very wary of appointing a no-nonsense businessman, as such. Whilst still subject to the laws of economics, heritage railways are about as far removed from general business as you can get. I'm racking my brains to think of another business that relies on people giving their time for nothing, regards outworn assets of the formative years as almost a necessity and frequently receives bequests and other donations. Your hard headed businessman could soon ruin all that you admire with your railway. Selling the assets is usually a first and easy step of such people and I'm sure that would not be your preferred course of action. Any new blood on the PLC board has to understand and be sympathetic to the ethos of a heritage railway, which usually means he is involved somewhere, if not actually on the WSR. This person will be innovative in ideas and must carry all with him as he brings the railway back from the brink. This paragon will be hard to find but find him (or her), you must.

 

Sorry Faol, but one bit of your scenario doesn't add up! if all the volunteers disappear in a puff of smoke, who will do the "work" on the railway? The railway will not be a "closed shop" but a "closed railway"!

 

If you consider I show "a lack of understanding of the role and responsibilities of a director" perhaps you would care to note that AIUI it was the chairmen of the respective bodies who sought the dismissal of individuals. In that context, and as an ex-chairman of the DEG involved in the early arrival of D7017 / 7018 to the WSR, perhaps you would care to point out my "lack of understanding".

 

Selling off assets is a sure fire way to end up in even more trouble. It is suicidal - please can somebody assure us that @Yorkshireman's source is mistaken!

If the locomotive is nearly complete, and a considerable sum has been spent on it, no wonder that the bank balance looks sickly - by a steam locomotive overhaul (an accountancy term for a sum of money with 6 digits before the decimal point!)

So the WSRplc nearly has an asset worth say £500,000 to £700,000 or maybe more - it is a sellers market with uncertain and irregular supply and even 'out of ticket locos' have changed hands for in excess of £300,000. The locomotive also have the ability to earn considerable annual sums, or rather the WSRplc would have to pay considerable sums to hire a replacement. WSRplc has spent a considerable sum on an asset which will repay that sum over a number of years, leaving still a valuable albeit without further expenditure unusable asset.

These are exactly the sort of circumstances where approaching a bank to provide asset finance secured against the Locomotive or loan finance secured against a range of assets, which would transfer at least part of the sum spent from the current account, which should not be expected to carry such expenditure which gives long term benefit, to a long term loan secured against the actual asset. The funds would help fund other expenditure.

A sticking plaster? Perhaps but actually the way that normal businesses frequently fund 'long term assets'.

A way to deal with a sudden rush of heavy expenditure being needed on infrastructure and locomotives, without which no operation Railway exists - definitely.

Any bank would need convincing of that a viable business underlying business exists, so this is not 'instead of' sorting the business out - that is a pre-requisite to such an approach to a bank but such an approach can work and release much needed short term cash flow by correctly placing expenditure on assets of long term benefit on long term, planned debt (which, unlike an Overdraft, reduces as the residual value of the Locomotive reduces).

Not easy, or perhaps even quick, but possible - I know - I have been part of a team that has done it!

Steven

 

Perhaps I'm confused (more than I usually am ;-), but I don't think they were removed from the PLC board? (The WSRA board tried to get them to quit the PLC board, but my impression is that failed.)

I think his post was tongue-in-cheek, a parody.

Noel

PS:

?? I think it was only the WSRA Chair who took that step; I don't recall any report of Mr. Coleby doing the same (but perhaps I missed it?)