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West Somerset Railway General Discussion

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

  1. Jamessquared

    Jamessquared Nat Pres stalwart

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    Martin - I have no more admiration for the seeming impasse in leadership in Somerset than anyone else. But you appear to be sending out scattergun comments that are mutually inconsistent - no wonder everyone is confused. For example, you have just written:

    which is clearly suggestive that in your view, the WSSRT (now the WSRHT I believe) will actively work to prevent any change the status quo within the railway with the plc being the primary body with regard anything substantial.

    But only three and a half hours ago (scarcely long enough for a train ride from Bishops Lydeard to Dunster and back!) you wrote:

    Now correct me if I am wrong, but isn't @ikcdab one of the current WSRHT trustees? So you seem to be saying on the one hand a particular person in a position of influence "has the railway at heart" but at the same time the organisation of which he is a trustee "will support the [plc] board if the present trusteeships remain unchanged".

    My personal view is that there has to be a fundamental change of the corporate governance model of the WSR to make a membership body the single source of strategic direction, with the operating company then basically being a subsidiary executive body to deliver that strategy on behalf of the members. I have been arguing some variation of that pretty consistently for the best part of ten years on this and the other WSR threads. But I don't think it advances things much if people just throw out platitudinous soundbites without actually thinking through the implication of what they are saying - least of all when they are basically contradictory.

    Tom
     
  2. Snifter

    Snifter Well-Known Member

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    Forgive me if the old grey matter is flagging but did the plc not issue a statement to the effect that they had no use for Washford ? If a new use has been found then that's excellent news however I am struggling to imagine what that could be.
     
  3. 60044

    60044 Member

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    It doesn't need to be that complicated or Machiavellian!
    The existing shares would be worthless but that means someone bankrolling the WSRA could potentially enable them to buy more and gain control quite cheaply - but it would be for the existing Directors and existing shareholders to set the price for the new shares because they would have to agree to it Whoever gains control would need to inject a very large amount of capital, one way or another and it would be up to the existing shareholders whether they would want to see that take place via the price of the new shares or in some other, perhaps more tax-efficient, form such as a gift aid donation(s) to the WSRA. If the latter I think I'd want a watertight agreement that it would be forthcoming!
    The fly in the ointment would be the current directors - would they prefer to see the line go bust before losing their positions, or wold the act in the best interests of the railway. Or would they come up with their own alternative plan?
     
  4. Miff

    Miff Part of the furniture Friend

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    The existing shareholders and Directors would have no say if the company was insolvent. The Administrator’s only duty would be to raise the maximum amount possible to repay as much as possible to the creditors; not to save the railway.
     
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  5. johnofwessex

    johnofwessex Resident of Nat Pres

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    And that is the real risk that is being run at the moment
     
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  6. martin1656

    martin1656 Nat Pres stalwart Friend

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    I'm working on the assumption that Ian Colby whilst he may be on the trustee board does not have much power, that only a select few are taking decisions, and very much like the PLC, decisions are not being discussed at length, this i get from his answers both on here and privatly, similar could be said of the WSRA if remarks made by trustees of that organisations are anything to go by, that there is a lot of top up discussions, that do not filter through to other members of boards. until its been decided, Either that or they are all as guilty as each other, in not taking a stance were bad decisions are being made, I agree that only a massive change, a nuclear option can bring about change, but in doing so it might destroy the very thing its trying to save.
     
  7. Lenny

    Lenny New Member

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    The Administrator CAN sell the business as a going concern if it can be shown that by doing so the creditors get a better return on what they are owed.
     
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  8. Miff

    Miff Part of the furniture Friend

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    I agree but anyone hoping for that (and some people here do seem to, albeit for very understandable reasons given the current plc behaviour) should understand that insolvency would mean a very very high risk of liquidation. People might also talk about 'pre-pack' administration deals etc. but that also requires the agreement of administrator and creditors, not just WSR people.
     
    Last edited: Jul 21, 2021
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  9. Bayard

    Bayard Well-Known Member

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    That may be true, but that doesn't mean it was true at the time the notice to quit was issued. Indeed, AFAICR, no alternative use by the Plc was suggested until some time after that point. The whole timeline of the events leading up to the issuing of the notice to quit suggested a completely different reason for the eviction, something that subsequent actions and announcements have nothing to dispel. When it walks like a duck and quacks like a duck, it really doesn't cut it to make unsupported statements that it is a seagull.
    Just because there are various unlikely theories flying about about the true reason for the throwing of the S&DRT off the WSR does not automatically mean that the truth is that there has been all along a carefully considered plan based purely on the best business principles. Indeed the unlikelihood of these "conspiracy theories" is only matched by the implausibility of what has been offered as being always the plan.
     
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  10. Bayard

    Bayard Well-Known Member

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    The shares are already worthless and always have been. That is why the Plc is not accountable to anyone. In a normal limited company, if the management were running it into the ground, the shareholders would be aggrieved in the loss of value of their shares and combine to try and elect different directors who could replace the management with more competent people. However, no WSR Plc shareholder bought their shares as an investment, they did it as a way of donating money to the railway and in full knowledge that what they were buying had no resale value.
     
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  11. Lineisclear

    Lineisclear Member

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    Not for the first time I find myself agreeing with Tom.

    Perhaps not entirely when he suggests that a subsidiary company would deliver strategy on behalf of the members. If that implies that it would operate ,as the subsidiary of a charity, primarily in the interests of the members then that is not deliverable under charity law. A charity must be run for public benefit and its Trustees are accountable for that to the Charity Commission. Preservation of the railway is not, by itself, a qualification for charitable status. What counts is the public benefit ( typically education ) you achieve with what you preserve. Paradoxically a charity and its subsidiary are less free to operate as their members would prefer than a PLC which can be run primarily its shareholders' interest.

    That's one of the structural challenges of the WSR in that the "members" of the railway are, unless they are PLC shareholders, not members of the entity that owns and controls the railway. By and large they are members of distinct bodies with limited charitable purposes that, unless changed subject to charity commission consent, would not include power to run the railway. So they have little influence over the direction of the railway other than the draconian option of withholding financial support or declining to volunteer.

    What I find surprising is the assumption that if the PLC were to fail another railway phoenix would emerge from the ashes. It's suggested that the line might become part of the national network or that a WSRA inspired initiative could take it on. Both seem highly improbable. I know they are anathema to many in the preservation movement but sadly we are not immune from the economic reality that there has to be a viable business plan. The investment required to upgrade the line to allow speeds that would be attractive to a commercial operator would be huge. Is there really a sufficient level of demand to offer a return on that investment? It's arguable that the current challenges of the WSR stem from years of under investment. Some posters express surprise at the £1m appeal target to ensure survival. My reaction is one of surprise that the figure is so low. I suspect that assured survival requires a capital injection of many times that figure. Coming from another long heritage railway the suggestion that a further £1million income every year, over and above operating surpluses, seems entirely realistic. The underlying issue, regardless of who owns and controls the railway, is whether there is a viable business model for a line of that length? Much of the expensive infrastructure was once maintained by BR with access to the public purse is, after many years in preservation, in need of replacement. The challenge for heritage railways generally, not just the WSR, is how they fund that work. The longer the line the more there is to replace and the bigger the financial challenge.

    In my original volunteered report I suggested that if the PLC were to fail a bike might be a good investment. Look at the popularity of the Camel Trail and the Tarka Trail. It's always seemed likely to me that if the railway failed there would be pressure to replace it with an alternative tourist attraction with far more attractive environmental credentials.

    Someone asked in an earlier post if signalling equipment would be at risk in the event of insolvency. It's an example of how much more difficult a WSR post insolvency rescue would be than has thankfully been the case at Llangollen. In the event of insolvency the assets would be in the hands of a receiver or liquidator whose duty would be to maximise the return for creditors. It is possible that an Administrator could be appointed with a view to sale of all or part of the business but if it's not viable in its present form its seems unlikely that the business fundamentals would be so different to justify such an option. Far more likely that the creditors would want an early and easily achieved return, such as could be helped by, for instance, stripping out the content of signal boxes for auction. Would there be enough essential assets surviving insolvency to make it realistic for another operator to take over?

    Could the course of events be changed by shareholders being persuaded, as Martin suggests, to donate their shares to the WSRA to augment its voting capacity at an EGM or AGM? My experience of helping design an implementation plan for my report convinced me that what really matters to most PLC shareholders is their extraordinarily generous travel concessions. The PLC Articles only provide for complete transfer of shares and registration in the name of the new shareholder. I can't see many shareholders giving up the benefits they bought in order to benefit the WSRA.

    Is there a viable way forward? I suspect the answer is Yes but it wouldn't be the WSR as people have come to know and love it. Unlike many posters on this Forum, whilst I share their dislike of some of the PLC board's decisions, I don't believe they are a bunch of incompetents hell bent on the destruction of the WSR. At the end of the day they are doing what they are mandated to to do by PLC's constitution. It states unequivocally that the company shall be run by its directors. Not by it shareholders, not by the members of other bodies, and not by opinion on here or elsewhere.

    I can envisage alternative futures and I would be very surprised if the board and its advisers, in the exercise of their privilege and responsibility, haven't considered them and planned accordingly.
     
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  12. John Palmer

    John Palmer New Member

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    At present the WSR plc has no real alternative to telling the world that the Washford site is required for the use of the West Somerset Railway because any admission to the contrary would undermine the legal basis on which was predicated the notice purporting to terminate the S&DRT's business tenancy of the site.

    The plc has “permitted” the S&DRT to remain in occupation of the Washford site until 10th August. If the negotiations between the plc and the Trust that @FrankC tells us are ongoing have not been finalised by that date, perhaps he will kindly confirm for us that the plc will raise no objection to the Trust's continuing occupation of the site for a reasonable period thereafter until such of the its property as remains at Washford has been removed. After all, if the plc is in earnest about negotiating terms for the grant of a fresh lease to the S&DRT, it can scarcely object to the Trust retaining on site property (e.g. track, plant, buildings) of which it might expect to make use during the currency of any such fresh lease.

    As a member of the S&DRT, I look forward to @FrankC's reassurance that Trust assets will not be put at risk by any action taken by the plc following finalisation of the ongoing negotiations, whether before or after 10th August. This is not an unreasonable request in the light of the expectation raised by the 2018 agreement that the plc would permit the Trust to remain at Washford until 2070.
     
  13. John Palmer

    John Palmer New Member

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    A pity nobody pointed that out to the directors of the WSR plc before, in the exercise of their privilege and responsibility, they demanded from the S&DRT a contribution to the WSR bail-out fund which the Trust could not lawfully make. A pity also that, in the further exercise of that privilege and responsibility, the plc directors then determined that the S&DRT must go when its board pointed out the constraint on making such a contribution to which it was subject. You may not believe that the plc board are "a bunch of incompetents hell bent on the destruction of the WSR", but the way in which the plc has dealt with the S&DRT strongly suggests a lamentable lack of the competence the railway requires.
     
    Last edited: Jul 21, 2021
  14. Aberdare

    Aberdare New Member

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    Tender T2061 for 7828

    Although there has been further progress on the tender tank it has mostly been marking out and drilling lots of pilot holes for rivets. The outcome of which is not particularly photogenic.

    To keep the ball rolling here are some photographs of the parts to make an additional water strainer which goes in the bottom of the tank to stop any debris entering the feed water pipes to the injectors. We only had one of the originals, the other was missing, so new copper components have been made by laser cutting the sheets and all the holes. At the same time we are supplying two more to the Erlestoke Manor Fund for use on 2874's tender.

    Before anyone asks I do not know the exact number of holes but there are approximately 3,000 of them in each strainer!

    Andy.

    IMG_2476.JPG IMG_2486.JPG IMG_2490.JPG IMG_2492.JPG
     
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  15. 30854

    30854 Resident of Nat Pres

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    First point first ...... as do I. Tom's analyses are far more often than not, bang on the money.

    From a clearly well considered post, the paragraph copied above stood out like a sore thumb. In so many ways, the WSR relies heavily on the goodwill of the Local Authority, a point I suspect many often forget. Even leaving aside well (and frequently) aired 'local difficulties', should future legislation be unfavourable to the likes of heritage operations (steam or diesel), it needs remembering that in many comparable areas, LAs frequently become imbued with aspects of compliance with said legislation.

    Here's my concern. With an operation running smoothly, of significant benefit to the wider economy, any LA (or MP, for that matter) would likely do all within their power lobby for retention. Where that isn't the case and more especially where there's a competing, potentially more attractive option, in terms both financial and of meeting statutory requirements, what LA wouldn't be at least keeping their options under review?
     
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  16. Pete Thornhill

    Pete Thornhill Resident of Nat Pres Staff Member Administrator Moderator Friend

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    3F0508C4-CD1C-4A50-B188-D4F7C56BA8F4.jpeg

    Ouch, even allowing for the extra two days since the weekly Monday update was due £2341 in nine days is way short of what is needed.
     
  17. 61624

    61624 Part of the furniture

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    You are right if things go as far as admininstration but the scenario I outlined assumed that as administration loomed the Plc Board, if they were acting in the best interests of the shareholders, look for a last ditch white knight. Still, if the Plc goes into administration then the Administrator would be looking intitially to salvage it as a going concern and would be largely unconstrained by the wishes of directors and existing shareholdersin who they sold it to and at what price. As long as it remains a going concern then the operating licence should stay with it.
     
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  18. Lineisclear

    Lineisclear Member

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    If insolvency looms the Directors must NOT be driven by the best interests of shareholders . Their legal duty at that point is to run the business in the best interests of its creditors. You're right about the licence staying in situ if it's going concern (as a company's auditors are duty bound to establish) but if that's the case then insolvency is not looming! The definition of going concern is that a company is likely to be able to pay its debts as they fall due during the twelve month period following the date the judgement is made i.e. it's expected to remain solvent for at least a year.

    In an insolvency situation the destiny of the the railway is in the hands of its creditors not its shareholders.
     
  19. D1039

    D1039 Part of the furniture

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    Updated spreadsheet attached with this week's total, adjusting for utility savings off the target rather than as cash raised.

    Patrick
     

    Attached Files:

  20. Piggy

    Piggy Member

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    As Jimmy Greaves was wont to say ..... "It's a funny old game !"
     

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