Steam engines available for traffic in 2014

Yes, and yes. One absolute is that any engine making a celebratory return to steam, either after a heavy repair or a Barry resurrection is 3650 days off being stopped for another heavy, and it will cost a big slug of money. If you don't put money aside as you use it, you are heading for a) the back of the queue, b) a time on display while you cadge the money from the membership, Heritage Lottery Fund, or await a lonely millionaire. And 2/3rds of the money you need will be for the boiler. It is not unusual now for a complete engine to languish for a decade. Some have been out for even longer than that.

But the spare/pool boiler idea doesn't seem to have transformed the fortunes of the S15 class, does it? I can't go and travel behind one despite the ratio of boilers to engines being pretty good. If owners and host railways won't play nicely, or put money into a sink fund to hasten the 10 yearly (as some commendably have, before EMF gets cross with me again) what is the answer?... I cannot accept, as some do here, that having a complete engine languishing is A Good Thing. There is massive capital tied up in them.

 

Yes you can!

Tom

 

I don't believe there is much capital tied up in them though, at least not realisable capital (beyond some residual scrap value). The unrestored loco market isn't exactly buoyant, is it?

I've often wondered if the best accounting policy would be to list all unrestored locos as zero (or some nominal) value. As they are restored, the money spent from revenue could be added to the balance sheet as capital, and depreciated over ten years once the loco entered service. Because that gradual erosion in value would appear in the profit and loss account, it would make the cost of ownership more transparent; specifically if the railway wasn't spending as much in revenue on overhauls as it was losing in locos getting closer to the end of their ticket, it would be more visible what the real profit and loss of the whole railway was. As things stand, a railway can put a line item in the P&L about how much is spent on overhauls, but that doesn't necessarily reflect the loss in value caused by the gradual ageing of the fleet, or whether the rate of repairs is keeping up with the rate of ageing. If times are financially tough, you can cut a workshop budget to stay in the black and the impact may not be felt for several years afterwards.

Tom

 

Wake up at the back there! Loco 847 that is currently running on the Bluebell looks very much like an S15 to me, in fact it is an S15.

 

If the above accounting treatment is not followed by a plc, then I would argue that the plc is in breach of International Accounting Standard 16 and that the auditors should note such none compliance in their report. Not to treat an asset in this way gives, as you point out, an incorrect and potentially misleading picture.

to get technical IAS requires the key elements of an asset such as a locomotive to be identified and different lives applied to different components. So that the frames would if in good condition be given a longer asset life than the boiler, given the need for a ten year overhaul.

 

First up it does not make sense to have all locos in ticket at the same time as then you'll have a lot of locos out of ticket at the same time. Secondly you don't need more locos available for traffic than you realistically need or they won't be getting the miles in to "earn" their money for the next overhaul. Thirdly workshop capacity will dictate that not all locos can be under overhaul at the same time - and we know how Byzantine it is to send them elsewhere for overhaul - so it is inevitable that some locos will sit out of traffic awaiting their pace in the workshop. As a static loco doesn't absorb much in the way of resources, is it such a bad thing for them to be static?

 

Does anyone know - to a reasonably authoratative level - how many of the rest, probably 1000 machines, are available for traffic this year? And is that number more than or fewer than there were a decade ago?

 

If railways did as you suggest, the underlying trend that rightly or wrongly concerns me would be very clearly visible and transparent. I am sure Simon will be able to say why just that thing isn't happening now. Perhaps it doesn't have to, or auditors are just going on what Directors tell them and lack the industry expertise to challenge it. Because every time a new engine steams or returns to steam, with all pomp and flag waving and nice warm speeches, you are also putting a £300,000 plus liability on your books for exactly a decade hence. You cannot hope to steam even the best restored engine more than 3000 times in 10 years. So you need to squirrel away at least £100 a steaming day in the overhaul fund. Or not bother and languish until you get lucky financially. And if a complete restored but useless engine isn't capital tied up and not earning any ROI, what is it?

 

If it's completely restored then surely it's not going to be languishing anywhere, it will be out there earning its keep. Or do you count a loco that has run in traffic but had an expired boiler ticket as completely restored? Slightly different ball game in that case. You could of course have a situation where the money earned by loco A funds the overhaul of loco B. Loco B then goes on to fund Loco C until it runs full circle and loco A gets overhauled again. I'm not sure if anywhere operates like this but if it did then loco A's ROI will be loco B's overhaul etc.

 

The IWSR owns all of the locos based there, so in theory operates as you describe. I am sure there must be others, not least the Welsh narrow gauge lines

 

A very accurate list of ex main line loco's was given on this site two or three years ago and I decided to try and get all of them in black and white film. I had photo'd a good three quarter at the time. A current boiler certificate was I thought the best way, although loco's maybe laid up for other reasons, but spring back into service a lot quicker .
I, ve tried to keep this up to date ,it's fairly easy to keep track of new loco's coming into traffic ,but loco's coming out not so,particually the smaller loco,s .My totals are with current boiler cert's, 66 ex G W R ,41 ex L M S ,31 ex SR, 15 ex L N ER and 18 ex B R Standard ,171 all told.
I,'ve still to photo' long promised 2-6-2T 5541. 9681 both Dean Forest, P 178 Bluebell ,46512 Strathspey ,46100 Royal Scot , 47298 Llangollen ( is it still there )and nearly done G W R 4270 and 7820.I,ve not included the imported W D ,s.
I dare say I am a few out ,but its not so easy.

 

There is a difference between depreciation and cash. Depreciating an asset doesn't mean that you will have the equivalent amount of cash at the end of the depreciation period. Again under IAS (sorry to get all geeky) there is no liability of £300k, unless you are legally obliged to restore the loco at that point. If the owner has no legal obligation there is no liability. Sometime ago we discussed the SVR and its obligation to return certain locos to their owners in running order. I was lead to understand that no liability to do so was on the balance sheet of the SVR. I would still like to understand the auditors rationale for signing this off.

 

Thank you Peckett, 171 out of 450 betters the 32% number. Valid boiler certificate is a good way of categorising, although one you mention does indeed have a valid certificate but isn't exactly available for traffic. It will be difficult to keep an exact running total because of "churn"; if there are 170, 17 on average will expire every year. It would be interesting to know if 17 return every year too. If it is more than 17, the trend is upward, as indeed it seems the passenger demand is if only slowly. If it is less than 17, hire engines will get pricier and there will be more diesel diagrams.

The 82045 people will soon have a working prototype and all the intellectual property skills and patterns to build as many brand new 2-6-2Ts as anyone could want. The prototype has cost the best part of £1.5 million. What would a second one cost? Or a third? Because if you can make one for less than a million, you are in the same financial ball park as a Barry restoration where few or no parts exist. If you can get it down to £500,000, you have started to challenge the economics of the 10 yearly nightmare. An off-the-shelf engine, capable of economy in coal and track force, and being attractive to visitors but with forecastable whole life costs. Finance Directors should find that mouthwatering after so many years of pretending there is nothing wrong with fleet costs as they soar majestically northward with no apparent interest from anyone in getting a grip on them.

 

thought provoking....a new loco for £50000 a year over 10 years, then park it up and build another (or sell it off at a discount price)

 

It could be less than that. There would be a residual value, and a pool of spares, common across the fleet, built as part of the production run, and it might not need a full blown ten yearly at all, just a boiler swap. The overhaul down time would be weeks, not years. Or as you say, build it down to a price and at the end of the lease, throw it away. But if you did, it wouldn't be a 82xxx replica, it would be a cheap pastiche. The 82045 chaps have achieved much with little. If they built half a dozen, and offered an affordable lease package, I suspect they would be inundated. The economics of leasing kettles can't be that potty, Porterbrook seriously considered it, as opposed to thinking about it and laughing, a few years ago.

 

How much would the average hire fee be do you think? Now I mean, on current vintage locos

 

I have observed this and similar threads with some interest, where a seemingly simple question is posed, and a variety of possible answers are forthcoming. Starting from a base of being poorly informed about the operation and financial costs going forward of the Heritage movement, these threads have been illuminating. What has become increasingly apparent is that whilst some posters, such as PH above, openly admit that they have no answer to what would appear on the face of it to be a simple question, they have on the other hand expressed solid views in some areas. PH is abetted in a somewhat parallel universe by GF-G who raises legitimate issues and concerns for costs going forward. Others appear to be able to present coherent and well presented arguments in favour of their understanding of a particular subject area. Maybe we are fortunate to be members of a somewhat unique group, where law of supply and demand are found not to apply.

Where does this leave the movement ? If we really do not know how many Steam Locomotives are in service today in the UK, nor if this number is greater or less than at some point in the past, and what the total overhaul costs are likely to be for those Loco's in overhaul queues' up and down the country, we do indeed need to ask ourselves some serious questions.

My personal concerns are more than just financial, although the implications are closely linked. The 'amateur' and/or enthusiast aspect of the movement, which has served so well until this point in time, may inevitably be approaching its sell by date. What has been achieved by those with vision and passion today and in the past is truly remarkable. The picture however appears to be undergoing a slow but continuous evolution. There is going to be significant expenditure and physical effort required on loco's, coaches and infrastructure, as a result of the unremitting passage of time. A dwindling number of skilled volunteers, they are not being trained in the numbers of the past, and are unlikely to be so in the future, and a money tree that appears to have pretty well attained its maximum number of growth rings, although a good summer can still produce an excellent crop. This combination of factors makes the future somewhat challenging, unique and uncertain for the movement.

Maybe if every Heritage railway continues to develop its own unique working model for the future, many may well survive and hopefully prosper. There will unfortunately, be railways where management will not be up to the challenges that are going to present themselves. Volunteer support and membership, key players up until this point in time, may no longer be available in the numbers required to fill large deficits.

In the real world one has to grow the business to be successful, and to grow there needs to be an understanding of both the business and the market. Standing still eventually leads to failure.

 

Interestingly, the group which has two locos but only one boiler has managed to steam both of them, but the group which has two locos and three boilers has only steamed one of them.
I'm not quite sure what this proves though!

 

Nobody knows anything - William Goldman. (Adventures in the Screen Trade).

 

i have found this thread very interesting.

i dont myself see the need for more locos to be available than required for traffic needs.

i also enjoy seeing the locos not operational whether in museums, or properly displayed, or in the sheds.

what does annoy me is the loco that is taken to bits when it's ticket ends to lanquish scattered in the open deteriorating for many many years because no proper planning has gone into the timing of the overhaul plan and resources etc. the deteriorating parts scattered around looking like a scrap yard then surely add to the final cost of overhaul, not to mention parts that go missing over the years. both Tom and i can think of a few examples where unfortunately this has happened.

cheers,
julian