Future ownership of locos & the way to go?

Steam Railways article did draw attention to the real problem that many preserved locos belong to individuals - or group of individuals - who are of an age when they suddenly both recognise mortality and seek to protect the futures of their locomotive(s). The chairman of 6024 Society (amongst others) also acknowledges this and states that he has to "consider all options" in order to protect 6024's future.

Since this problem is now appearing with other locomotive groups and is a valid discussion point.

 

As a starting point, it depends if the loco (or other asset for that matter) is owned by a corporate body (a company or trust) or one or more individuals directly.
If it's a company there is a potential concern of who becomes the owners of the shares as the original shareholders shuffle off this mortal coil. New shareholders may not have the interest and may see an asset as a valuable heap of scrap that can make them a quick buck. Admittedly that's more a concern for a loco that's out of ticket than one in traffic.
If a loco is owned directly by one or more individuals directly, then all sorts of potential inheritance tax issues might arise, as I undertand it.

 

There is a slow but steady trend for the ownership of locos and rolling stock to move from that of individuals to that of railways - witness the loco purchases by the Mid Hants, Bodmin & Wenford, NYMR etc. in recent years. I think this is a trend that will continue to develop as railways seek to secure their locomotive supplies and become less reliant on hired in engines. I do have concerns about individuals owning locos because they can exercise their whims if they wish - it would be quite possible for Jeremy Hoskins, for example, to have a clause in his will that specifies the equivalent of a viking burial when he dies - his locos are all cut up! Her'd be perfectly entitled to do that and there's nothing any of us could do about it. I'm not suggesting for a moment that he would do that, but he could if he wanted to. For that reason, I feel that locos in the ownership of companies or charities are somewhat safer.

 

I think the trend for the railways to buy up locos as they come available will continue, but in addition the families of deceased owners have come to agreement, in one form or another, with railways for their continued operation - witness the Black 5 at Llangollen and the Dukedog on the Bluebell. This will probably continue too.

I think the only issue really is the status of the 8P and 9F locos which are too big for general use on a preserved railway. There might be some heart searching about these engines.

Regards

 

34081 is owned by a charitable trust but with the active membership getting older we are fully aware that whilst we'll see this overhaul through to completion, the next one will be a different matter altogether. Assuming we turn the job around in three years and add another ten until it needs doing again, we are looking at 2023. A fair number of our current team will be in their 70s and 80s and probably not quite as nimble as they are today so we have to either recruit a lot of new blood or look at what happens next to 34081. A change of ownership is easier said than done - but not impossible - given our articles of association but whatever the future holds I doubt we'll be operating in the same manner as we have done for the past 37 years.

 

I think the best way forward is to bring in new blood and also do a deal with a preserved railway to help out with the overhaul and running costs in return for guaranteed use.

Regards,

Dan

 

Jeremy Hosking could direct that his locos were cut up in his Will but I expect the direction would fall if challenged in a court and I can't see the beneficiaries or the executors seeing much utility in implementing the direction. He may not own any of the locos personally anyway.

I would imagine that, to varying extents, locos will continue to be owned by individuals, by trusts, by charitable trusts and by limited companies. At least with charitable Trusts, new Trustees can be assumed as others resign (or otherwise fail) and so the ownership vehicle remains constant although the Trustees change with the passage of time.

 

The Drury family own 60532 - as second generation owners the precedent is already there. 60532 is going nowhere despite attempts to strike a deal that would see it on a loan to NELPG that would create the possibility of A1, A2, A3 and A4 rosters. If only that circle could be squared.

45596, for instance, is owned by a registered charity - which does not have the funds to consider a mainline return - so charitable ownership may protect existence, but not long term operation, nor even stewardship in extremis. At least shares are held as nominees and not as private property - a road that will eventually lead to nightmares.

As to the Viking Funeral - Babs the 1920s racing car killed its driveron Pendine sands and was buried there for sixty plus years - so it has happened.

The better part of our main line fleet is utterly dependent on a few courageous and determined individuals, Cameron, Hoskins, Riley, Smith and Whitehouse. There is no sinecure there. All are mortal

The only animal missing is corporate Ltd company, or Plc ownership, neither of which is desirable as the scrapman can lie at the end of an insolvency road.

WCRC may have it right - a trading company relying on locos that may be held by legal trusts - I believe Galatea is owned in that manner and possibly 6115.

Whatever, continued mainline operation will always depend on determined individuals prepared to wrestle with open access requirements, derogations, and compliance where that has to be the road.

Those issues may eventually prove to be even more difficult than the engineering challenges our loco fleet presents,and which are so routinely overcome in all their complexity by today's tiny band of experts who still persist in getting results forty plus years after the big railway chucked out steam.

Successful succession planning is badly needed so that the kind of problems that are apparently affecting 6024 do not arise again.

 

Dan,
Not sure if you are replying to my post in particular or other posts in general but that is the route which we feel we will end up travelling with 34081. The membership as always will decide and who knows what ideas will be put forward over the next few years.

 

Yes, I believe the current years may well be looked back on as the second "Golden Age of Steam" in the not-too-distant future. Especially mainline steam. I'm glad I've seen some of it!

 

Sorry Spamcan, it was both

I know Class 8's are normally too much for preserved line services, but interspersed with main line work as a 'flagship' locomotive for the railways concerned would seem an elegant solution.

Regards,

Dan

 

TBirdFrank put Michael Whitehouse in his list where he says there is no sinecure for the loco as they are all mortal. He seems to assume that if there is no one to follow in their footsteps then the future of the loco/s is in doubt.
I can assure him that in the case of the Tyseley Collection there is no doubt that their future is as secure as it can be. All the engines are held in a Trust so as one chairman leaves another will take his place.
There is a link here that explains the way the trust works.......http://www.tyseleylocoworks.co.uk/tlw/brm.htm

 

Fine Kevin - that's about the best way for volunteer led ownership to be structured - but it does depend on effective succession planning,which you appear to have - c/f the Bahamas Loco Society now.

Could you have seen where that organisation is now when Dinting was up and running under George Davies stewardship?

 

That said I well recall the wise words odf David Smith : - Steam will run on the main line for only as long as the owners like me are prepared to dig into their pockets - and dig DEEP !

This situation really covers 2 main areas, namely [1] the question of ownership and [2] the willingness to run - and where.

The late Peter Beet defined this succintly - does the owner keep a preserved loco in a "glass case" to preserve it knowing that it will still cost money to maintain or operate it on a heritage line or main line where running incurs cost and wear & tear in the hope that generated income will cover the higher running costs.

The eternal question of preservation - to run or not to run.

 

This is going to be a question which comes more to the fore as years go on, but I very much doubt there is a 'one size fits all' approach that can be taken.

For example, even at present you are seeing a number of railways looking to purchase their own motive power (c/f the NYMR, MHR), but there are an equal number that seem to be deciding that owning their own locomotives at present does not represent their core business. While at present they would seem to be managing the situation by the hire of locomotives, it will be interesting to see how this develops into the future, or whether if this view on the core business extends to the formation of a separate trust for the holding of locomotives (while not being solely their objectives, in this respect the model of the SVRRST comes to mind).

What I do wonder is whether the present comparatively high value of locomotives can be sustained once we are away from the generation who are prepared (and able) to pay a premium to recreate their childhood memories. For example, have a look at the latest SR magazines advertising - £45k for a dismantled RSH saddle tank? I think there will come the day when values decline closer to the value of the life-expired scrap that many of our existing locos undeniably are.

 

I quite like the intended method being adopted by the Dinmore Manor Locomotive Ltd of keeping at least two of their locos running to pay for an overhaul of a third loco, so when the time comes it can replace one of the working locos.

 

The SVR has set up a Charity with this in mind - http://www.svr-rollingstocktrust.org.uk/index.html

Patrick

 

I wonder, would all stand by and see a loco go to scrap? I'd like to think that the loco is more worth more intact than the value of it's broken bits. Would we all stand by and let this happen? I believe we would all rally round and funds would be raised if Heritage sites didn't have the readies at the time.

 

The SVR Rolling Stock Trust only have "Hinton Manor" ( in terms of motive power) under their care at present, but I recall a comment made recently somewhere that they had received "a number" of enquiries from owners of rolling stock, presumably including locomotives, who were considering transferring their items to the Trust. A sign of the times maybe?

Also worth noting that transferring an asset to a Registered Charity is still as far as I am aware, an "exempt transfer" for Inheritance Tax purposes.