S&D Railway Trust

An allusion to a famous statement ...

Tom

 

In time , I suspect the WSRA will , and when they in turn get shoved off the railway, I hope they reflect on the lost chances to effect change.

 

Sow the wind OK, but it's not the whirlwind that does the reaping, its you reaping the whirlwind

 

So, in two years time 53808 will need an overhaul, costing in the region of £3-500,000, the trust won't have enough from two years of hire/ steaming fees, so what then, the trust won't have the money needed, The WSR could, and most likily will say, your not our responsibility now, so that means the engine has to be stored, pending raising the money needed, i'm hoping that the engine remains MHR based after that, and the MHR board agrees a rescue plan, to overhaul the engine, in stark contract to the way the trust has been completly shafted by the people who currently run the WSR.
Of course, in 2 years, it could be an entirely different picture at Minehead, sanity could have returned, but i won't be holding my breath.

 

I wonder whether the trust have been shafted by the current management quite as much as you suggest. If the cash set aside for overhaul had already been spent 2 years ago as stated in that article, then the current management have amongst other things made the true position clear.

The rot appears to be deeper than is sometimes allowed for.


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From what I can make out while the current chair is taking the flack and rightly so for a lot of his decisions a lot of the underlying issues in terms of finance and maintenance have been going on for a long time.

I remember @Robin Moira White pointing out the large number of tie bars and wet beds on the line some years ago

 

I think being evicted from your base and incurring additional costs on top of the reneging on the agreement counts as being shafted.

 

There should still be a pot of money set aside (and I mean real money, not an accounting allowance) since jjp took over. This appears not to be the case.

Keith

 

Not true. The directors of the WSR can be accused of many things, but not having a lot of money set aside for specific overhauls is not one of them.

Yes, they should have provided for the overhaul in the accounts, but it would be a strange business that actually put money aside in a bank account to fund future specific liabilities.

 

Congratulations @simon on your 10,000th posting!

 

Thank you. I guess one or two of them might have been of value

 

My comment was of degree, not kind. This fiasco has deeper roots than is sometimes convenient to recall.


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Bomber Harris, in turn, got it from the Bible:
Hosea 8:7 For they have sown the wind, and they shall reap the whirlwind:

 

I would disagree. Businesses set aside money for many things, e.g. to pay the VAT. It simply is not good business practice to assume that such a large sum of money as half a million pounds will be available when needed at a particular future date. Remember that the owners of a steam locomotve would be looking to overhaul it in the shortest time possible. What railway can generate £500,000 spare cash out of turnover in two to three years, or even half of that, and not starve all the the things that profits are normally spent on?

 

But heritage railways are not like 'ordinary' businesses in regards to loco overhauls, especially when those locos do not actually belong to the railway co. As I understand it, the Bluebell put aside ring fenced funds for certain (all?) locos - perhaps @Jamessquared could confirm this? I'm sure other railways do likewise and also make cash payments for use of hired locos.

If I was the owner of a loco and hired it to railway X, I would expect there to be regular payments based on the usage of my loco, I would not expect the railway to say 'we'll pay you at some point in the future, but don't worry we've made an allowance (but no actual money) in our accounts for your funds'

Keith

 

Our situation is rather more complicated than that - some locos have ring-fenced funds held within the trust, but generally the loco works (and overhauls) is funded from the revenue budget, which in some cases would then be supplemented by ring-fenced funds from the trust or the loco-owning group.

Tom

 

A lot of the costs of an overhaul are notional - for example the time spent by full time staff who would have to be paid anyway even if they were doing something else - that it would be foolish to put big pots of money to one side. The interesting thing will be to see what Minehead works will be left to do now that it ison the brink of being emptied. If the money wasn't there for the overhaul of 53808 it probably isn't going to be there to start on an alternative project that is likely to be bigger.

 

I don't entirely agree. One model, generally used by independent loco-owning groups, is that the group accrues money during operation from hire fees, which is then available for the overhaul. Generally, even that model tends to result in a shortfall, not least because the money raised is spent years later, when its value has been eroded by inflation. Also, overhauls just seem to be more complex every time.

However, there is another model, in which the railway funds its workshop from revenue, from which it pays for the overhaul of locos and routine maintenance and operational costs. Each year the works will have a budget. So for example, if the workshop has a budget of, say, £400k per year of which £200k is available to overhaul a loco, then given the projected cost of 53808, that constitutes 1.5 - 2.5 years in the workshop. As I understand, the requirement is for the loco to be returned to service by 2030; therefore provided it has a space in the workshop by around 2027/8, the company could still overhaul it in time from the workshop budget, even with not a penny in the bank right now. The company just needs to be confident that ongoing revenues will continue to allow sufficient provision within the loco works. (Carriages, p/way and others would be budgeted in similar manner).

As an example, suppose the line needed six locos available at any time; reckoned it could get nine years out of every loco, and overhauls cost on average £300k. It would need to overhaul one loco every 18 months, so would need to allocate £200k each year in its budget for overhauls. Alternatively it could hire in all its locos, in which case it would need a far lower workshop budget, but would be spending a similar sum each season on loco hires. Or some mixed model between those extremes. The issue here I think is that people are looking at 53808 as if it was an independently-owned loco on a contract similar to other hired-in locos; whereas it is actually being run as you would do with a company-owned loco, in which you used it nominally for free but funded the overhaul from the revenue budget. The point is, the company doesn't need £300 - £500k of cash available in 2023 ready to start an overhaul; it just has to be able to fund that amount from its loco department revenue budget between 2023 and 2030.

(I'd make no comment about how that is formally represented in the annual accounts).

Tom

 

Well I for one hope that its stay at the MHR is only temporary. They don't need it, it has no real relevance to them and would push back other locos in their overhaul queue if given priority. Swanage would be closer to its spiritual home and they probably have the greater need.

 

I think you're probably right, especially about it being best to think of it as a company-owned loco. I suspect we've been diverted to this other way of thinking by the fact that the WSR did set aside money for the 7F, and it has now gone.