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S&D Railway Trust

Discussion in 'Heritage Railways & Centres in the UK' started by Andy Norman, Feb 24, 2020.

  1. jma1009

    jma1009 Well-Known Member

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    I didn't know that 53808 required new tyres - I know that Kilmersdon does.

    I am aware it has been suggested that 53808's next overhaul will involve a lot of work and time. I would expect 3 years at least assuming the WSR plc use it's employed work shop staff on other contract jobs that they will get paid for. The credit - that I don't think has been correctly reflected in the WSR plc accounts - is the free use of the loco since the last overhaul.
     
  2. Steve

    Steve Resident of Nat Pres Friend

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    Does this mean that they will need turning and there is not sufficient thickness for another turning or are you saying that the opportunity should be taken to replace them as they will not last too much longer? They are different.
     
  3. free2grice

    free2grice Part of the furniture Friend

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    It's all happening at the Mid-Hants this weekend. <BJ>
    • GRAND OPENING of the new museum in Alresford incorporating S&D Trust artefacts
    • S&D historic wagons will be on display at various places around the railway
     
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  4. ikcdab

    ikcdab Member Friend

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    You state that as a fact though, of course, there is no evidence whatsoever to back it up.
    Hardly free use. Without checking back, the WSR did the last overhaul of the engine and have spent considerable sums on it over the years. That spending has all been properly accounted for. Everyone on here knows the general basis of the running agreement and it's been accounted for in the same way that every other railway with such arrangements does.
    Ian C
     
  5. flying scotsman123

    flying scotsman123 Resident of Nat Pres

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    Surely the last overhaul was for the free use for the *previous* ten years? Or have I missed something?
     
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  6. ikcdab

    ikcdab Member Friend

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    No you havent missed anything. My point is that it isn't "free use". That totally misrepresents the situation whereby a railway company uses an engine in return for maintaining it in running order, including the 10 year overhaul.
    Ian C
     
  7. jma1009

    jma1009 Well-Known Member

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    @ikcdab (Ian Coleby), sadly the more you post on various threads on here - well 2 - the more I question your ability to understand anything of any legal significance or consequence especially so far as the SDRT is concerned.

    'Run and Repair' is just that. 53808's boiler ticket runs out next year so the overhaul (heavy this time) crystallises. It will be a significant burden on the the WSR plc accounts, and a big challenge to the workshop staff and how it is going to be factored in with other work of which we have heard not a jot.
     
  8. ikcdab

    ikcdab Member Friend

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    Umm no, I understand it very well indeed. It was you who said the WSR had had "free use" of the locomotive. I merely pointed out that it isn't "free use" at all, for the reasons you have just mentioned above.
    Ian C
     
  9. flying scotsman123

    flying scotsman123 Resident of Nat Pres

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    I fear your pedantry has caused confusion. We all know that "free use" in this instance just means no daily steaming fee is paid, but the WSR is responsible for its upkeep and to return it to an overhauled condition as it was presented to them. Perhaps you need to point out that "free use" doesn't mean "free" to some of your fellow WSR directors though, as they seem do to have forgotten that...
     
  10. jma1009

    jma1009 Well-Known Member

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    Humour me please!

    53808's boiler ticket runs out next year.

    That crystallises the 'heavy' overhaul by the WSR plc, if it can demonstrate it has the commitment and resources to do this overhaul. May last year it said it would NOT in the joint statement with the WSRA and now WSRHT, and then with the quite expected backlash there was some backtracking and what we now have in the most recent WSR plc accounts and the Chairman's report to same.

    A £230,000 provision in the accounts not backed up by any restricted fund etc. Nothing there to pay for 53808, and once again it creates a big problem for the auditors and the JJP spin machine.

    @ikcdab if there are no restricted funds in the WSR plc accounts but just a "provision" for the impending heavy overhaul, is that not free use ? Especially given the auditors report and the chairman's report to the accounts about the ability of the WSR plc to be a "going concern"?
     
    Last edited: Sep 28, 2021
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  11. jnc

    jnc Well-Known Member

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    I expect that that thought has been very powerfully impressed upon them.

    Noel
     
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  12. Arther1973

    Arther1973 New Member

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    I'm liking this in recognition of the effort that's clearly gone into this but don't like it because I have such happy memories of Washford. Mind you, a trip to the MHR is long overdue and I shall look forward to reacquainting myself with the LSWR Road Van :)
     
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  13. 35B

    35B Nat Pres stalwart

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    I agree that it is questionable, but the role of restricted funds has been discussed many times. As @Jamessquared has reminded us, putting cash aside for an overhaul may appear prudent but deprives the railway of working cash while being of questionable value for funding the work. It also presumes that the funding will be purchase based when the reality will involve the use of staff on the payroll, and the payment for work being allocation of those costs.

    The question that matters, and is intrinsically difficult to answer, is whether the provision against the balance sheet can be converted into cash when required to fund the overhaul.

    The issue is that the behaviour of WSR plc in recent years undermines the trust that is essential for this arrangement to work.


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  14. Jamessquared

    Jamessquared Nat Pres stalwart

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    To which I's also add that "restricted funds" are specifically an artefact of how charities manage their money, and are designed to give a protection to donors that their donations will be used according to their wishes. Despite what @jma1009 appears to wish, there is no obvious mechanism of which I am aware for a plc to hold "restricted funds". They may choose to hold cash reserves with the intention that they are spent in a specific way, but that is not the same as a formal restriction. Ultimately if the survival of a company requires that such funds set aside for a project are spent on something else, it would be the duty of the plc directors to do so; whereas the Trustees of a charity would be prevented from so doing with a restricted fund.

    Tom
     
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  15. Big Al

    Big Al Nat Pres stalwart Staff Member Moderator

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    This is all getting quite complicated. Can we try a simple analysis and check out what is and is not correct?
    1. The ticket of 53808 will run out in 2022 after which it will need a ten year overhaul.
    2. The MHR can continue to 'run and repair' the loco until the ticket expires.
    3. The WSR has nothing ring fenced for this work but it might have a notional sum in accounts set against future earnings?
    4. The MHR has nothing ring fenced for this work because it wasn't expecting to have the locomotive on its line.

    Assuming the above is correct then there appears to be no 'hard cash' sitting anywhere for this overhaul and therefore where it is carried out seems open for the S&DRT to decide. This includes future revenue earning opportunities.

    I'm really struggling to see what the advantage is in the 7F returning to the WSR for anything other than as a guest locomotive at a gala. And in the next twelve months there are far better options available where it is currently and, for example, as a guest on the GWSR.
     
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  16. 35B

    35B Nat Pres stalwart

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    You omit point 0 - that the use of 53808 by the WSR is conditional upon WSR undertaking the overhaul, under a contract that remains in force.

    Therefore, while points 1-4 are all correct, they do not address the time by when WSR must complete that overhaul, and might therefore be considered in breach of the contract. Therefore, the equation that S&DRT must address is significantly more complex, and they need to consider at what point there is evidence that WSR plc will not fulfil the contract. Unfortunately, the time for that to be apparent works against the interests of S&DRT in achieving a prompt overhaul, as it is likely to be open to WSR plc to argue that any delay is a matter of scheduling, and that the actions of S&DRT have caused them to be unable to do the required work.
     
  17. Lineisclear

    Lineisclear Member

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    Big Al's summary looks pretty accurate except that point 3 may be a tad misleading. The provision in the accounts does not mean, confusingly, that any cash has been provided. It's simply accounting recognition of the existence of an accrued liability which as far as I know the WSR PLC has never disputed. Its purpose is not to allocate funds but to give a reasonably accurate picture of the company's current financial position.
    What the PLC has said is that it can't to afford to pay for the overhaul when it falls due. If that's true it follows that it would be no more able to pay damages for breach of contract.
    It seems to me the S and DT Trustees have acted in a professional and responsible way best calculated to enable the Trust to fulfill its public benefit educational purpose. That after all is their primary duty. Initiating litigation, if the anticipatory breach becomes confirmed, would be much less of a clear exercise of their duty even if the Trust members voted for it. The fundamental problem is quantification of loss. Locomotive overhauls are notorious in that you can't tell how extensive the problem, and its likely cost, will be until you start taking it apart. Any argument based on restoration to some notional "as new" condition depends on a very detailed schedule of that condition. If that was not done at the time ( which is often the case with use and pay later for overhaul contracts) then quantification can be a huge challenge. Given the reported state of the PLC finances a Court might order security for costs but the one thing it seems certain it would not do is issue an order for specific performance of the contract. That's because of the basic legal principle that such orders will not be made where the breach is capable of being compensated in money terms.
    I don't see any legal way to compel the PLC to undertake the overhaul although it may well be that the parties can reach a mutually beneficial way forward. As been pointed out use of in house labour involves cost allocation which may provide an attractive solution. The alternative of legal proceedings to recover compensation is beset by a number of risks that the Trustees would have to consider very carefully.
    I believe firmly that this is an example of the dangers of use and pay later hire contracts that have created similar unaffordable accrued obligations on other heritage railways. It's a salutory warning to avoid using them.
     
  18. martin1656

    martin1656 Nat Pres stalwart Friend

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    A lot would depend on several things,
    1: can trust be regained with the WSR PLC, and can they be trusted to keep their side of any agreement,
    2 : If the MHR, were so minded to enter an agreement to overhaul the engine, and offer the S&D an running agreement, would the trust view it as being a better proposition, as most work can be done in house, with volunteer input, some of the cost could be off put from the hire charges from allowing the MHR use of Kilmersdon, as an Thomas engine for hire along with Thomas,
    3: what outside help can be expected from other groups with in what ever railway the engine is overhauled at.
     
  19. martin1656

    martin1656 Nat Pres stalwart Friend

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    My own personal view is that, it would be better for the S&D Trust to base their engine on the MHR, and for Ropley to overhaul the engine,
    Now how can that be done?
    , Some of the cost can be offset, from hire fees once Kilmersdon is available for hire, as an for hire engine for thomas events, it should be a regular income ,
    Also, i would like it if the Eastleigh LPS, The Urie group, and the S&D trust were to form an alliance and pool engines , expertise etc, Once 499 is done, then a combined Group can start on 53808, the steaming fees, could be used to pay for some of the work that has to be done, And when 53808 steams again, the fees from that can go into a pot to help with the others, so that the engines in use raise the money to overhaul the next one in the queue,
     
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  20. 35B

    35B Nat Pres stalwart

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    That may be, but could trigger reassessment of whether the WSR would be liable for that overhaul.


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