NYMR Cash for Coal Appeal

None of this addresses the basic problem which is the necessity to (a) reduce costs, (b) increase income or, ideally, both. Is the long predicted collision between romantic aspiration and financial reality now with us?

P.H.

 

On face value this sounds quite scary..

When NYMR is running full trains in peak season using volunteer labour and isn't making money... who is ?

Insourcing the locomotive fleet is probably a good start.. how much do they pay each year for hire fees ?, running an 8P, 9F and hiring Black 5's.. when they have a cheap to run S160 in the sidings ? Does Whitby pay it's way ?

However.. how much of this appeal is truly "desperation" versus clever marketing to shake the money tree a little ?

 

Maybe as suggested earlier they do not charge enough i expect they are making money but maybe not enough but remembering where they are in the country its a long way to travel and in a area which always suffers worse in any economic downturn.
You are left with a problem cut fuel costs but shorter trains less passengers less income from extras such as food and the dining service.
You can run more deisels not allways popular but more efficent and cheaper this may also decrease your numbers of passengers.
I always though that the NYMR carried the most passenger per year of any heritage railway is this the case still.

 

In real terms (as in, "this is an ongoing viable concern") I suspect no-one really is.

Accountancy can hide a lot of things, especially in how you depreciate assets. Most railways have pretty big asset bases (a big railway is likely to have multiple millions in track components, land and buildings alone, before getting on to rolling stock). So they can continue as solvent concerns even if they make a cash loss or break even, since the liabilities don't get close to exceeding the assets.

But now the tricksy bit: how does your railway depreciate its assets for wear and tear? For example, it seems that loco overhauls for a mid-size loco these days seem to cost increasing amounts. £250k for an 10-yearly overhaul is not untypical. But does your railway write off £25k per year per engine in steam? For a line with say 8 engines in service, that could mean it should be knocking off £200k per year off the bottom line just for depreciation of engines - to which you can add amounts for carriages, wagons, trackwork etc. But £200k may well be the difference between the line apparently making a cash profit or not. This problem can only get worse: a 20 year-old BR standard restored in the mid 70s with a basically sound boiler and set of frames is now a 60 year-old veteran and its next overhaul may well require major boiler work, maybe to the extent of having an essentially new firebox etc.

I think it is broadly possible for a heritage railway to cover its running costs from fares, catering, retail and other income. But fundamentally, at that point you still aren't really a going concern. Effectively, loco owners and society members are subsidising many heritage lines, not just through volunteer labour but in real hard cash as well.

The fact that so many major lines are short of locos is symptomatic of this. Were such lines cash-rich (i.e., had they set aside over the lifetime of each loco a fund to pay for its next overhaul), then they would pay for overhauls. (You might ask "where?", but were money available, a market would develop: either lines could afford to expand their own capabilities, or more external contractors like Ian Riley would spring up). But the lines are cash poor, so paying for overhauls is out of the question, as is building up their own capacity. So everyone is soldiering on eking out what they have - but the long-term trend is that everyone seems to be losing the battle against ever-increasing costs to repair ever more worn out assets.

Just my 2 cents (which I will be donating to the Bluebell "Double Donation" appeal this weekend...)

Tom

 

Footplate crews are generally volunteers but the NYMR employs a lot of paid staff in other areas. Too many, a lot of people would say.

Does Whitby pay its way? That's a difficult one although I'd personally say it does. Working out the costs of the two options of going to Whitby and not going to Whitby is fairly easily quantified. However, it is hard to establish what the income would be if the trains didn't run to Whitby as you will never know what the passenger numbers would be if Whitby was not an option and that statistic must be known to give a true answer. Any other analysis must make assumptions.

Personally, I'd love to see the S160 restored and back in traffic but I fear that this won't happen unless there is a sea-change of opinion amongst those that have the power to make it happen.

 

Why is 'insourcing' better value than hiring in a locomotive? If you hire in you have an absolute fixed cost, allowing a lot easier budgeting, and a bit like a 'hire car' when it doesn't work you give it back and get them to fix it. If it's your income that's going begging whilst the loco is out of action you have a pretty good incentive to 'get it fixed' and you don't rely on disinterested staff who think the world owes them a living, and can 'talk a good job', of which there are always some around the 'average' preserved railway. There are also, I must say, a large number of very good staff, but as they say 'don't waste a good recession' if you need a staff 'clearout'!


John

 

Torbay and Dartmouth railway seems to be an example of a line paying its way...

If you look at their model, to the average enthusiast it's boring and off the map...
but from a business perspective, very small fleet, high utilisation locomotive mileage and fleet has to be comparable to Wolsztyn), everything in sourced, right sized and focused strategy (not hearts and minds) and pays a dividend to share holders...

Lakeside and Haverthwaite looks like another.

 

Indeed. It boils down to giving what the public are prepared to pay for rather than following our romantic dream, only to find the cost of doing so exceeds what the customers will stomach. "We" might like long runs, long trains plus big choo choos and think of all kinds of not entirely convincing reasons why these are absolutely necessary. I remain to be convinced that these matter very much at all to the general public but the cost certainly will.

P.H.

 

After writing my thoughts above, I did wonder about those two lines, as probably the main examples of lines being very commercially focused. How do they finance their loco overhauuls and other major capital expenditure? Do they do so from running revenue, setting aside an amount each year so there is a war chest for when the big bills come? - if so then they are running a very tight ship indeed!

I think the point about being boring to enthusiasts though is well made. If your core service basically requires trains of a similar weight all year, you can obviously optimise your loco fleet to provide the optimum match (I suspect there would be more than one or two lines in the country that would kill to have a loco fleet of two Fairburn tanks...). Whereas if (like the Bluebell, to take on example), you try run everything from one coach Observation specials behind a diminutive Victorian 0-6-0T to 6 coach services behind a big pacific, inevitably that means more cost, as you either need more engines in service than is ideal, or else sometimes you are working services with engines that are generally too large. I suspect that, as enthusiasts, we are increasingly going to have to cope with the fact that the public won't pay enough to let us play trains with the variety we want: if we want variety in locos running over long (and extending) routes, hauling Victorian and Edwardian carriages, we're going to have to pay the excess ourselves.

Tom

 

I've no factual information on the TDR, only observations but they appear to be increasing the size of their motive power. The Pannier and small Prairies are now seemingly considered to be too small and class 4/5 is the preferred size. They also run a pretty basic service of one loco/set for most of the year and the locos don't clock up a huge annual mileage. They do run some long trains at times, though.
IMHO, a well organised and lean set up.

 

Three pages - and one post by the finance director himself - I wonder who knows his railway best?

 

Another possible answer, and a whole new (well, old...) can of worms - too many preserved railways?

Are too many of the "3/4 mile journey from Station A (in small generic town with little or no other tourist potential) to Headshunt B ( just outside said town )" operations diluting the supply of:
A. Volunteers
B. Potential passengers (remember, Jo Public is only going to visit a pres line so many times)
C. Suitable locos and stock

which could otherwise be assisting with the operation of the more established lines? By which I'm not writing off all smaller lines - there certainly are examples of success stories - but there are also examples which have little or no feasible possibility of growing into a more impressive setup than their short, overgrown 'branch'. However, applying Mr. Darwin's principles, time will tell which lines survive! Should one or two lines be forced into closure, it may not be the worst possible outcome for the preservation movement as a whole.

As others have said though, it seems unlikely that the Moors would be struggling to cover basic operating costs while lines such as those described above continue to plod along! Shrewd marketing seems likely?

 

Eh what? Does that mean he's right then? Sorry Frank, not sure I follow your logic here.

 

I think that this is a high risk move by the NYMR. If the railway doesn't cover its everyday costs, including depreciation, from its every day income then it will be on a downhill spiral.

These costs are going to go on rising for the foreseeable future, and if they hold the fares this year and ask for donations to top up, then they risk getting trapped with the fare-box covering a diminishing part of the true cost.

Maybe they should thgink about working like the airlines and some ferry companies and charge a separate fuel surcharge that is linked to a tamgible fuel cost. This would probably be more acceptable to the general customer than a simple price rise and reduce the uncertainty and risks of a donation scheme.

Donations and similar income should be treated as a bonus and used for nice to do projects rather than the bread and butter operation. Look at the problems at the Fairbourne Railway for an example of what happens when a railway becomes over dependant on donations/subsidy.

 

It certainly is high risk. If a business even hints publicly that it has difficulty in paying bills for day to day supplies then credit has a habit of drying up.

 

do they want a class 4MT 2-6-4T with 5'2" driving wheels and nominal tractive effort of 32,080 lbf? http://railways.national-preservation.com/steam-traction/34617-l1-new-build.html

 

It would indeed be an ideal loco for the line. However, the NYMR does not have the space available during the build process so we'll just have to wait until it's built, won't we?

:smile:

 

One thing that I do need to research is the number of operating days and number of services operated per day compared to all the other "big players" in the preserved league...............

That could be an interesting task.

 

Good one....:heh::heh::heh:


Keith