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West Somerset Railway General Discussion

Discussion in 'Heritage Railways & Centres in the UK' started by gwr4090, Nov 15, 2007.

  1. jma1009

    jma1009 Well-Known Member

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    I usually use the 'beta' site for this stuff.

    I am somewhat of a quandary about note 16 in the accounts.

    On one hand it suggests a substantial (though quite not enough) provision for the heavy overhaul of 53808 - so why did JJP make a public statement the middle of last year the WSR plc wouldn't pay for the legally binding contractual commitment?

    Unless I am mistaken, the latest accounts do include such a provision! Which is always what I have wanted to see, and perhaps is of some significance.
     
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  2. torgormaig

    torgormaig Part of the furniture Friend

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    Did he actually say the they WOULD not pay or did he alert them to the fact they MAY not be able to pay when the time came in 2025? There is a big difference between the two statements.

    Peter
     
  3. Alan Kebby

    Alan Kebby Member

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    But if they are going to pay for the overhaul, why wouldn’t they keep 53808 and get their money’s worth? Instead they let it go, and are spending money hiring other locos instead.
     
  4. marshall5

    marshall5 Well-Known Member

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    Wasn't the promised overhaul retrospective? i.e. WSR have already had their money's worth.
    Ray.
     
  5. jma1009

    jma1009 Well-Known Member

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    I think (without checking) it is in the WSR plc board position statement of 1st May last year after the joint WSR plc board and WSSRT and WSRA statement the same date.

    The WSR plc board stated then it wouldn't pay for 53808's next overhaul [which will be a heavy overhaul]. Much concern and bad publicity was created as a result.

    If my understanding of the last accounts is correct, this was unnecessary, and perhaps indicates, charitably, a new emollient approach of a recently restructured WSR plc board.
     
  6. johnofwessex

    johnofwessex Part of the furniture

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    Given that a contractual liability exists to overhaul 53808, I would have thought that there would have to be a provision in the accounts otherwise they do not properly reflect the PLC's situation.

    Otherwise the accounts may have had to be qualified
     
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  7. KatieLouLou

    KatieLouLou New Member

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    The way I understand it is that the provision increases as the loco is used in lieu of a hire charge for the loco. Presumably if the loco is not on the line and not used by WSR, then the provision will not increase, and therefore may not be sufficient when the time comes...

    I'd be more interested that the cash position doesn't appear sufficient to cover outstanding creditors. Not necessarily a problem in normal times, but if you have no income it becomes more of an issue. That would also imply there is no cash to pay for a loco overhaul.
     
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  8. Monkey Magic

    Monkey Magic Part of the furniture

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    Changing the topic slightly, tonight is Twelfth Night, a time for Wassailing your apple trees, driving out evil spirits and cider based revelry. Not withstanding the debate that whether the 5th or the 6th is Twelfth Night (that would be an ecumenical matter). I note that in West Somerset (and the Minehead area) villages don't use the 5/6th instead declaring the 17th Twelfth Night working to the old calendar and rejecting the 1750 Calendar Act.

    Somehow, this news about West Somerset did not surprise me - tensions over moving to more modern ways of doing things, committed Old Believers clinging on, problems with damaging evil spirits and the inability to drive them out, seemed a bit too familiar.

    Wassail!
     
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  9. FrankC

    FrankC Well-Known Member

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    Harumph. More modern day nonsense. The end of Christmastide is Candlemas (2nd February) in my part of Wiltshire. No need to rush. :)
     
  10. flying scotsman123

    flying scotsman123 Nat Pres stalwart

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    Here you go:

    Loco provisions.png
     
  11. Jamessquared

    Jamessquared Nat Pres stalwart

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    I am not an accountant ...

    But - am I right in thinking that there has been a little bit of a storm in a teacup about this? Now, I fully realise that a provision is not the same as actual cash (but I have argued in any case that holding actual cash in that way is not necessarily an effective use of such cash when you have a steady state loco overhaul requirement). But as I read that, the company is stating that it has a future liability of £228k in respect of loco overhauls specifically for 53808; and moreover that provision increased by £110k in financial year 2019/20, when the loco was in heavy use on the WSR. It hasn't run any mileage on the WSR in 2020, but - assumption here - running on the MHR presumably generates some hire income to the S&DRT that can be used towards the overhaul, which on the surface seems better in the future interests of seeing the loco returned to traffic than having it sitting unused on the WSR. It is hardly unprecedented fro lines with a relative excess of locos at a given point in time to hire them to lines with a relative dearth so as to maximise the opportunities to generate revenue within the timeframe of a ticking boiler ticket.

    I suspect there is an argument to be had about whether £228k is a realistic figure (I don't know the state of the loco, but I'd be surprised if it was sufficient, given the size and mileage). But at least as a matter of principal, that note in the accounts seems to me a fairly clear indication that current board thinking is that they are aware of their future liability for the overhaul and intend to honour it.

    Tom
     
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  12. flying scotsman123

    flying scotsman123 Nat Pres stalwart

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    Very true, although I'm not sure you could describe the WSR as having a "relative excess of locos" given it is hiring one in at the moment.

    Indeed, which puts an even bigger question mark over the statement last year that the WSR would be unable to pay for the overhaul. I think its boiler ticket expires in 2023 (not 2026, its boiler was last done in apparently, having been corrected last time). Looking at the figures it doesn't seem unreasonable to have expected 53808 to have gained another £200k in provisions assuming its boiler ticket lasted the full length, and that COVID didn't materially impact 2021, which although it looks like it will now, when the statement was made, most thought unlikely. It's hard to see why the WSR managed to cast such doubt over their ability to stick to contracts in general, which must have been incredibly damaging.
     
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  13. 61624

    61624 Well-Known Member

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    I'm no accountant either, but isn't the issue that the £228K has been removed since 31st March 2019? Or am I imagining that?
     
  14. flying scotsman123

    flying scotsman123 Nat Pres stalwart

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    It says they were there at 31st March 2020. Is that before or after the first doubts were cast over 53808's overhaul?
     
  15. Jamessquared

    Jamessquared Nat Pres stalwart

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    I think if you had an in-ticket loco in 2020 and a service plan that had no planned mileage, you had a relative excess of locos! Where that leaves them in 2021 I don't know.

    My reading is that, by the time the accounts were signed off, the plc had arrived at a position whereby they are committed to the correct course of action for that loco. Whether that was always the case through 2020, or there was a board level change and counter-change of policy I don't know, but at least now the stated position seems to be to recognise the requirement to overhaul the loco, and it must have been that for at least as long as the accounts had been finalised. There was something put out in August that mentioned the same £228k figure, so presumably it was policy by then.

    Probably what you can safely say is that - for the first half of the year - the external comms was poor; at the very least they allowed themselves to get in arrears of the story, not in front of it and controlling it.

    Tom
     
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  16. simon

    simon Part of the furniture

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    I think if you remove the last 5 words from your post, it is accurate.

    What we do not know is whether the WSR will be in a situation to fund the overhaul when it is due.
     
  17. John Palmer

    John Palmer Member

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    Well before the adverse financial impact of Covid 19 could have been anticipated, the Winter 2019 issue of 'Pines Express' announced that the WSR plc had made a statement that it could not guarantee having the necessary funds for 53808’s overhaul, due in 2025. Consistently with this, in its 1st May 2020 position statement the plc publicly announced that it had been working “to build some financial provision to look after the engine” but “cannot fund this alone.” The only sense that I can make of these two snippets is that there was a period of at least 4 months up to May 2020 in which the plc regarded itself as incapable of meeting the full cost of 'looking after' the locomotive. It remains to be seen whether the accounts' commitment of £228,690 towards the cost of the locomotive's overhaul will prove more durable than the company's commitment to the terms for occupation of the Washford site that it agreed with the S&DRT in 2018.
     
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  18. MellishR

    MellishR Part of the furniture Friend

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    WSR PLC speak with forked tongue.
     
  19. Bayard

    Bayard Part of the furniture

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    Well done to JJP for getting the WSR into the national news, https://www.bbc.co.uk/news/uk-england-somerset-55544616 , and not in a negative way. He's even managed to use his "£800K loss" figure to good advantage.
    However, I'm slightly dubious about Duncan Ballard's grasp of chemistry. Given that coal is almost pure carbon, how does the SVR manage to get their CO2 emissions when burning it "significantly lower"? Are they producing vast quantities of carbon monoxide?
     
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  20. flying scotsman123

    flying scotsman123 Nat Pres stalwart

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    I know WSR inhabitants branching out beyond their own thread into the wilds of the rest of the forum is a radical prospect ( ;) ) but there's already been some discussion of this in the coal thread, beginning here.
     
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