SVR General Discussion

There have been a few comments on here about the SVR's wage bill, unfortunately this is the inevitable consequence. I don't think the SVR will be the only organisation having to make tough decisions this year.

April and May are big months for the SVR. A positive Easter, Gala and early May Bank Holiday(s) will perhaps set a more positive tone for the rest of the year.

 

Definitely. And likewise you can not blame the EMF on taking the loco where it will earn more £, its just been overhauled and now needs to earn its keep.

 

A saving in 2023 yes, but that "saving" just ends up being another debt in the long term to add to those out of ticket locos in the Engine House & elsewhere. So its not a long term strategy.

 

But 4930 has just been overhauled at huge expense - surely using this loco ahead of 7812 is recouping that investment?

 

I hope that those being made redundant find jobs swiftly. A sobering moment indeed.

 

And why do you think it is better for people to spend their money on the SVR rather than the WSR?

 

If you go bust in the short term there is no need for a long term strategy!! Very sad, especially for those personally impacted but better to have something than an administrator selling things on behalf of creditors.

 

In narrow 2023 cash strapped terms - clearly yes.
But you cannot run a begging bowl appeal to raise the full cost of its overhaul every time.
There needs to be a strategy and clearly stuffing earned £50 notes under the mattress for up to 10 years is not the answer. This is where owning groups with small, sensible fleets score because income can be almost immediately reinvested thereby minimising the effects of inflation, whilst host railway hire costs are capped at the agreed rate and, importantly, paid near the time of use avoiding down stream unfunded liabilities.

 

I can't speak for @MikeParkin65 but given that this is the SVR discussion thread, surely it is better for the SVR for people to spend their money on the SVR rather than the WSR.

 

Because this is the SVR thread and I’m an SVR member. Doesn’t seem particularly hard to work out where my loyalty lies.

 

The SVR has operated run and repair ever since it was formed. It became a problem as soon as it became obvious that you couldn't keep doing quick overhauls on a fleet of around 25 locos - the days of home fleet galas with 17 and 18 in steam were never going to be sustainable. It's not 'up to 10 years'; 7325, 80079 and 47373 have all been waiting for their overhaul for more than 20 years now. As mentioned up thread, negotiations with the owning groups have been ongoing for some time. So yes there needs to be a strategy, but in the SVR's case it's a) nothing new and b) not easy to sort out even if they weren't in a financial hole right now.

 

But that seem to totally miss the point that the owning group are taking the loco somewhere it will earn them more revenue.
I also do not really get your "star" loco comment. I like Manors being a GWR fan and they make lovely noise, but along with Bulleid Pacifics and Black 5 they are probably the most preserved class. On a normal day how many enthusiasts will travel to the SVR because it, rather than some other loco is operating?

 

No I’m not missing the point at all I also support the EMF and appreciate that they have sought a more sustainable running agreement for the season.

My point is that the return to steam (again) of 7812 has been pretty high profile within the hobby (look at social and printed media and the SVR’s own publicity material) that will have generated a pool of interest greater tban would have been the case otherwise. There will also be the launch of the new OO Manor from Accurascale (who are producing models of both EMF locos) that will also generate interest in. 7812.

So gala aside I think the SVR have been short sighted in not offering the steaming days they needed (says elsewhere they wanted 100 and were offered 30)

Not a show stopper and appreciate interest in 7812 alone isn’t going to sustain the SVR in the situation it finds itself in but likewise ‘every penny counts’.

 

I think the real interest will lie in whether the SVR Management reaction has actually been one of over-reaction and that the service cuts will be a self-fulfilling prophecy.

 

Is it a great saving though?

They may not pay a hire fee to another loco owning group but they still need to set the same money aside to overhaul their "run and repair" locos. If they don't put the money aside then they have an engine out of ticket with no money to overhaul it and they will be cap in hand to the HLF etc again

 

Do they actually set money aside for "run and repair" overhauls, though? A lot of the cost of an overhaul lies in the labour, whose costs are part of the general overhead since the workforce does not seem to rise and fall according to the size and complexity of the overhauls in hand at any given time. Material costs are relatively small in the overall picture.

 

Simple answer, no they don't either set money aside in cash terms or book it as a liability so that it appears on the balance sheet. When a loco on run and repair finally comes up for overhaul, the costs are booked as the overhaul is done. I assume that's been policy since Day 1 - I 've personally never been convinced by that accounting treatment, but it's was asked relatively recently at an SVR(H) AGMs and that was the answer from the Board (with which the auditors presumably concur).

I think the HLF funding for part of the 4930's overhaul was a one-off and IIRC took the form of funding apprenticeships with a lot of the labour being carried out by those apprentices. Also, because it was a company loco, the overhaul costs were capitalised and will be written off as depreciation over the 10 years rather than being written off as incurred (which makes no difference in cash flow terms).

 

Covered earlier by:

As I understand it on the SVR under the run and repair overhauls there's not a contractual commitment to overhaul within a certain time, and liabilities so don't appear* on the balance sheet or P&L as they're uncrystallised. There's no obligation to overhaul them until SVRH is able and willing to.

*There's actually £200k in the accounts with a few thou added each year in accordance with the accounting policy. I've heard the ex-chair refer to a 1994 Coopers & Lybrand report which suggested changing it but unpicking the arrangements (and making a big seven figure restatement in the accounts) hasn't yet been achieved.

 

It depends on how you look at things. The money has to be coming in for the railways to hire the locos from these small groups. Some of those groups are in a very position to continue to sustain their fleet than some railways. But if all the locos had been part of a small group being paid a daily running fee or whatever, then there would have been less cash available to the railways for other things.
What in essence has been happening (I believe) is that most railways have been using the fact that raising money for a steam engine is easier than for a carriage or rails to subsidise their operations. Nothing wrong with that really, it’s just that the real cost of the operation was hidden and that we were always spending tomorrow’s money today. Run and repair contracts are a sort of unsecured overdraft.

 

But the SVR have contributed not inconsiderable sums, time and expertise to the overhauls of this loco, 75069 and further back 43106 - all have had massive repairs undertaken by the railway. 7714 has run huge mileages in recent years and probably saved the money railway due to its frugal coal use on shoulder services. To give these locos priority use is a return on that investment. In the case of 43106 it has given 14 years service - is that not of value to the railway?
I do not disagree that a strategy is required, but unfortunately, the harsh reality is that the railway has long had too many locomotives based here for its operational needs. Rightly or wrongly, the SVR will select a locomotive for overhaul based on best business sense, or not at all, as currently there is no economic case. The SVR is a business at the end of the day. At least Highley provides protection and access for the public.
The likes of the NYMR, GWSR and others have much smaller fleets so locos will get inevitably overhauled much quicker.
The fact is that without significant external investment, some of the former favourites of the SVR will not run again. That is where active private owners have an advantage, the EMF are not tied to SVR facilities or it seems, the railway. 7812, 7802 and now 5164 have a working future which is, ultimately, what we all want to see.