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West Somerset Railway General Discussion

Discussion in 'Heritage Railways & Centres in the UK' started by gwr4090, Nov 15, 2007.

  1. 35B

    35B Nat Pres stalwart

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    The problem with these models is that they make real a cost that, when accounted for as balance sheet provisions, is basically notional. Like depreciation, the process of writing off the value of an asset over time generates accounting entries which reduce the value of the company. But they don’t generate matching cash to pay for the replacement, and the actual decisions about how to spend cash will not be determined by what’s in the books.

    In a normal commercial company, this is a sensible compromise, and creates the right pressures within the business because to do otherwise would be to see the value of the business shrink. But it becomes much more questionable in a charitable or railway preservation environment, where those calculations are complicated by running a model in which cash is always in short supply, compensated for by donations and voluntary labour.

    That means, as @Monkey Magic says, that trust is the key to this kind of loco hire contract. And the moment either party acts in a way that suggests any less than the utmost good faith applies, things will unravel. As we’ve seen with 53808, with the locomotive sweated while also having the book value of provisions for overhaul reduced; ignoring questions of “thrashing” or the state of WSR finances, that imbalance cannot fail to undermine trust - as we’ve seen.


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  2. 1472

    1472 Well-Known Member

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    I don't normally post here now having long ago tired of hearing how monkey mischief and co are "irked". I do though have experience of the situation Jamessquared has mentioned above.

    The answer to the major issues he raises is for interested, properly incorporated owning groups to operate their own fleet with a "home" railway perhaps with occasional hires elsewhere. There are already examples of this with DMLL, The Maunsell Soc, EMF, SLL and others. My own view is that a fleet size of 4 is close to the ideal so that:
    • 2 of the fleet are out "earning"
    • 1 of the fleet is under comprehensive overhaul aimed at a full 10 yrs further service timed to start by the time one of the "earners" has to come out of traffic
    • 1 of the fleet is stored awaiting overhaul, preferably in museum conditions but certainly under cover, though overhaul plans and advance purchase of parts/materials is done where there is advantage/cash available
    Careful phasing of 10 yr tickets is of course necessary to achieve this.

    By doing this all funds currently to hand (steaming fees, share purchase, donations, retail proceeds, grants etc) can be directed at the current overhaul.
    By having 2 locos out earning there is a credible income stream.

    By paying out steaming fees as the locos are used real ££s are involved and can be accurately budgeted for by the host railway from current earnings. There can then be no temptation to divert the funds "elsewhere".

    It helps if the locos in the fleet are similar types both to pool spares and get intimate knowledge of what is involved in keeping them in good order.

    In future perhaps loco owning groups with a single loco need to consider whether they should amalgamate with other groups to give their asset the best chance of an active future.
     
    Last edited: Dec 30, 2020
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  3. Jamessquared

    Jamessquared Nat Pres stalwart

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    I think people are trying to look at these models with too narrow a focus of just what is the financial arrangement between loco owner and railway operator.

    In those terms, most agreements are indeed financially advantageous to the railway, in that they typically get a loco for less than it would cost if they owned it themselves, the loco owner typically subsidising the difference.

    OTOH, what does the loco owner get back? A railway, carriages, operational expertise and the business support (sales, marketing etc) to attract passengers. All of those things have a cost; all of them are necessary if the owner wishes to see their loco in service; none of them they explicitly pay for. That is essentially a subsidy going the other way (and one which, if you were so minded, you could probably have a stab at working out the value of - look at all those costs and divide by the annual mileage to get a per mile cost of “providing a railway”).

    The point being: don’t assume it is all one way traffic. Part of the difficulty with accounting in any model (except “railway owns 100% of its locos and never hires in”) is that the costs and benefits go in both directions, but are not aligned in time over the course of an entire overhaul / run / withdraw and store cycle - at times one party is paying heavily and not getting much back; at other times the situation is reversed.

    Tom
     
    Last edited: Dec 30, 2020
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  4. Monkey Magic

    Monkey Magic Part of the furniture

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    It is all well and good talking about consolidating ownership, however, there is huge variety in forms of ownership from wealthy individuals, to ageing or less wealthy individuals, small groups, large and small societies. All with their own often opaque ownership structures and rules. How to unpick those without going to court? How often have we seen 'owner refuses to sell', etc, the Binbrook Crab or the saga of 4160...

    Who is to tell society x that they should merge with group y because they have similar locos? 5164 joining the Erlestoke Manor fund is an exception rather than rule.

    Bottom line you can set out all the funding, overhaul and repair strategies you like but it counts for nothing if someone goes back on a deal.
     
  5. Paulthehitch

    Paulthehitch Well-Known Member

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    I suppose it would not be NP if it were not lococentric! The same applies to rolling stock real estate and everything required of a modern visitor attraction. Fine to start off with stuff borrowed or hired but over the decades it should have become the norm rather than the exception to own 100% Then all these arcane arguments about who pays for what would no longer be needed
     
  6. martin1656

    martin1656 Nat Pres stalwart Friend

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    As with everything trust is the key, Owners have to trust that the railway is going to honour their side of the agreement, and in the case of the S&D group, and WSR PLC, that trust broke down, and the word of the PLC to overhaul 88, can not be trusted, I would go so far as to say, its more likely that the loco won't be overhauled at the WSR. because the money won't be forthcoming , And that the owners will have to look at another agreement elsewhere,
    Personally, i think if she remains MHR based, the best option has to be an tripartite agreement between the Eastleigh RPS, S&D Trust, and Urie LPS To concentrate the overhaul of the 4 engines to a single combined group, so that the expertise gained with doing 506 and 499, can be used to overhaul 828 and 53808, possibly combining fund raising between the groups also with the MHRPS being involved so gift aid etc on donations can be sort after .
     
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  7. 61624

    61624 Part of the furniture

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    .... and inevitably railways would prefer to standardise on Mk 1 stock because it is cheaper to run and maintain. Sometimes it's better to keep things out of tyhe hands of the professional managers, who tend to be fixated with the bottom line. Be careful what you wish for!
     
    Last edited: Dec 30, 2020
  8. 1472

    1472 Well-Known Member

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    Nobody is telling anybody to do anything or suggesting going anywhere near a court. It is for owners/owning groups to think carefully about the best future arrangements for their situation and act accordingly, perhaps with host railway encouragement. Its no coincidence that various sheds and museums up and down the country are stuffed full of out of ticket locos with dormant/moribund owners and railways whose agreements are that they will overhaul them at some unspecified (as yet unfunded) time in the future. For some the necessary sunlit uplands for that will never appear over the horizon.

    I am aware of more 5164 into EMF type amalgamations currently being actively considered. No doubt there are others being contemplated.
     
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  9. Monkey Magic

    Monkey Magic Part of the furniture

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    You can add again the problems of stock owned by a range of groups and individuals. How often are linear scrapyard made up of coaches and wagons more than locos?

    To keep it on topic, the state of the WSSRT carriages for example is a good example. Should be the crowning glory of the WSR but isn't.

    Not disagreeing with any of that, but simply to note that the rational reorganisation of loco ownership/overhaul/funding is not going to be straightforward because of the current ownership set ups and that agreements are all well and good but they need to be honoured fully and in time for the system to work.
     
    Last edited: Dec 30, 2020
  10. flying scotsman123

    flying scotsman123 Resident of Nat Pres

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    That is true, but the WSRHT carriages are a poor example of that mantra, because to all intents and purposes, the WSRHT *is* the WSR.

    In defence of privately owned rolling stock, people often seem to forget that if it wasn't privately owned, it probably wouldn't exist at all. As has been pointed out, railway management if left to their own devices will focus on restoring Mk1s because that makes most business sense, they're easier and cheaper to restore and have highest capacity. Certain forum members can kick and scream about how railways should restore heritage stock all they like, but in the vast majority of cases, it simply wouldn't have happened with it being privately owned.
     
  11. RailWest

    RailWest Part of the furniture

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    Is not 5542 a good example of how the future overhaul of a loco can be paid for from the income from its usage?
     
  12. Monkey Magic

    Monkey Magic Part of the furniture

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    Absolutely. How to strike a balance between heritage and operating needs (although covid has brought compartment stock back into vogue). I really admire how the NNR and also the MHR C&W have both MK1s and 'heritage' projects on the go at the same time which strikes me as a good balance. But this works if you have the space, people, resources etc to have several carriages under restoration.

    I guess the problem is this, what happens when small owning group dies, or decides it can no longer restore said carriages. Unless there is a critical mass (which there often is at the premier lines) to take on these projects, they will get shoved down the siding in favour of 'easier mk1 restorations.

    I'd suggest wagons are even lower down the list of nice to look at but earn nothing other than photo charter money but are critical to telling the story of railway history.
     
  13. flying scotsman123

    flying scotsman123 Resident of Nat Pres

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    Indeed, and wagons are even more likely to be privately owned by a single owner too. On the flipside, wagons are usually easier and cheaper to restore, so you don't need so many people to be enthusiastic about them to get stuff done. There are more ways of making money from wagons than photo charters though, both directly and indirectly.
     
  14. Paulthehitch

    Paulthehitch Well-Known Member

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    The feeling appears to have been that Mk1s represented a cheap and relatively easy fix Nowadays with ORR.getting a bit fierce about condition issues was this correct?
     
  15. 21B

    21B Part of the furniture

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    I dont see much evidence for this statement. The majority of non mk1 stock laid up has never been restored because the resource wasnt there, not because managers prefer mk1s. What they preferred about mk1s was that they were affordable. What the older coaches require that is more expensive and less needed by mk1s is under cover accommodation. With that the difference in maintenance cost would be small if noticeable

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  16. big.stu

    big.stu Well-Known Member

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    Not true - it just needs some flexible thinking and there are other ways to make money using wagons. COVID-19 has put a stop to them for now, but look at the freight driving experience days we have run at NVR...very popular with the participants (always sell out), great value for money (customers' opinion, not just ours), and profitable for us (the Wagon Group) and the railway.
     
  17. Monkey Magic

    Monkey Magic Part of the furniture

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    No, I agree with you entirely. I wasn't clear but was talking more about how some railway management might view funding wagons compared to say funding the restoration of a mk1. My sense is that if it wasn't for volunteers such as yourself, wagons would possibly not be restored.

    To take it back to the S&DRT if the overhaul of 53808 has to be paid for by the S&DRT because the WSR can't or won't pay, this will push the overhaul of Kilmersdon or the restoration of the S&D carriages and wagons down the queue.
     
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  18. torgormaig

    torgormaig Part of the furniture Friend

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    Yes

    Peter
     
  19. Jamessquared

    Jamessquared Nat Pres stalwart

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    I doubt it; those projects are likely to have very little competition for the resources (cash, space or people) needed to overhaul 53808.

    I may be well off beam, but if 53808 were to enter Minehead works somewhere around 2026 for a full overhaul, part funded by the S&DRT, with a contribution from current steaming fees and the remainder funded by the WSR plc (or whatever commercial entity is in place by then), followed by re-entering traffic around 2029 with a new multi-year agreement with the WSR, I wouldn't be totally surprised. It'll probably end up costing more than £228k just because - well, when did a loco overhaul ever cost less than anticipated?

    Tom
     
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  20. flying scotsman123

    flying scotsman123 Resident of Nat Pres

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    For sure, Mk1s are needing more and more work now Paul, and they are certainly not as ready to run out the box as they once were. I don't know enough about what the ORR "points of interest" are on pre-nationalisation stock e.g. in comparison to corroding crash pillars on Mk1s to make an informed comparison, but my feeling is that even those fairly major repairs are relatively easy to do, finding someone competent to do the welding work is not hard (We no longer regard that as a "big job", although what is a big job is all the cosmetic joinery for panelling etc. stripping out and re-instating to allow safe welding). Finding a joiner to do the equivalent for a wooden bodied vehicle feels like it would be a harder, more complex job, but I don't know for sure, nor whether there is even a wooden bodied equivalent to the Mk1 crash pillar, nor whether if there is, it is a point of ORR interest in the same way Mk1 ones are.
     
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