SVR General Discussion

The SVR won't be the only railway making similar considerations. The difficulty is that there is the potential it becomes a buyers' market, i.e. assets may not realises as much as hoped. I can certainly see railways that own them wishing to thin out carriage fleets, but who would buy them? Maybe some will leave railway preservation and end up as e.g. glamping coaches (is that market bouyant?) and perhaps a few railways currently running small heterogenous fleets of Mark2s and DMU centre vehicles might take the opportunity to obtain some Mark 1s, but do they have money and will the right vehicles be the ones that are available?

Whatever happens, it is hard to imagine that prices would reach those obtained by the Llangollen a couple of years ago.

Tom

 

It brings into sharp focus the question of what constitute heritage assets, and what are purely operational assets.

I notice that there have been suggestions of strong reactions to the possible sale of 45110, which are understandable. I’m more interested in the questions around coaching stock sales, and the understanding of which vehicles the SVR owns because it is preserving them, and which it owns solely as fleet to allow passengers to be carried.

Whether or not the SVR is bound by the rules that apply to accredited museums, my reaction is that the decisions need to be made using the same decision making criteria as for a museum divesting part of its collection; defining first what is part of that collection and then identifying what assets might be surplus to it.

Changing the heritage railway business model may or may not be necessary. But there’s a fine line between changing something to make it more sustainable, and changing it in a way that loses what made (makes) it special in the first place.


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I’m sure that there are a good number of railways that would love the chance to acquire a Black 5. However, I’ve chosen to use acquire rather than buy because I doubt that there are many with the means to buy and overhaul one. At a guess £150-200K to buy and £700K to overhaul. Even that sale price might not be achievable in the current climate as it’s pointless buying unless you can overhaul it. Dafter things have happened, though. 92207 springs to mind.

 

£150k to £200k to buy would represent a very substantial cut (maybe 50%) from prices being achieved for complete but out of service locos only three or four years ago, but I agree it is possible. Very few buyers about at present I think.

 

On my last visit to the Valley, the 4079 photo charter, I may be wrong but I got the impression that the morale among the staff and volunteers was very low. Selling a loco like 45110 will not do anything to improve that. Talking to the loco crew of 4079 it was clear that the event gave them and the others involved something to enjoy and be positive about. Would I do it again? It would have to be something very special to entice me to spend the day chasing around in minibuses, the statement by the MD that this way of working was now common is simply not true, I’ve never been denied trackside access and the only time we have had to travel by road is when a freight train is involved although I do understand the special circumstances with the GW set. Such events won’t turn the railway around but do foster a positive attitude among the enthusiast fraternity. Family groups may be the bread and butter when it comes to general income but they are not the ones who put their hand in their pocket at times of crisis.
It’s interesting to compare the situation with the two railways I joined after ditching my SVR membership. The Bluebell have their own financial difficulties but are digging there way out of it by actively trying to attract more customers, hardly a week goes by without some sort of family orientated event, everything from reptiles to vintage cars and it seems to be working. The Worth Valley probably can’t be compared directly as it’s more of a community railway run with a much lower staff/volunteer ratio and that shows in its financial situation which is much more healthy. It’s not surprising therefore that the house journal, Push and Pull is full of optimism and positivity.
I am concerned about the future of the Valley and question if it’s policy of cuts and retrenchment is the right one. We now have a timetable that is not exactly attractive to the general day tripper and virtually no special events to attract the families to spend the day there. People are spending less on leisure pursuits and want added value for the money they do spend. The Valley is adjacent to a huge conurbation second only to London and they need exploit that potential. The current policy seems to be one of cutting back and shaking the collecting tin to get more donations, I’m not sure that is going to work.

 

I am more interested in the comment about the business model needing to change. Possibly so, but what exactly is meant? Cutting the number of services isn’t a business model shift. Asking volunteers to subscribe to a membership (like a golf club) that funded their activities (£hundreds per year) would be…. no I wasn’t advocating that as the answer. Business model shift is a big phrase, I’d like to know what is envisaged.

 

I'd suggest that one part of the shift that's required is accepting that railways can't rely on historic asset life to pay their way. It's been an important part of the HR business model since day 1, and all too rarely properly acknowledged as part of the overall business model.

The responses to that change will vary.

 

Pre covid I would have put an out of ticket Black 5 or similar around the £300K mark depending on how bad it was. The heritage railway world has changed significantly and there is more than just the Valley that is struggling financially. And, if you are also struggling for volunteers then it is a double whammy as you either have to cut back or employ more staff.

 

Further into the newsletter are reports about closer association with the mainline railway, utilising the mainline connection for testing & contract work / maintenance and storage. For me the business model change seems more about diversification, so the railway is less reliant on the fare box. That makes sense when disposable income is so unpredictable.
There is also the proposal to restructure the varying groups to enable gift aid and charitable grants.
I keep seeing reference to other railways are doing x, y & z - yes the SVR should look and learn, but the SVR is a very different beast to a branchline that is only a third of its length. The railway needs to play to it's strengths, rebuild slowly and I fully support it's cautious approach.
Throwing caution to the wind is likely suicidal, but we also had people questioning the number of visiting locos for their spring galas not so long ago! There are plenty of comments about galas remaining strong. Not surprising, when £ is short, people want bang for their buck when they do spend. SVR galas are the best out there, also great for volunteer morale, so again let the railway play to it's strengths.

 

Fair enough, but my point was more about the likely sums raised. If a railway thinks it will make an existential change to its financial fortunes by taking a long hard look at its stock list, it will probably be sadly disappointed.

There may be other benefits (not least getting a better balance between valuable stock and undercover storage) but I don’t think an asset rationalisation of rolling stock is likely to generate significant sums relative to those sought. (See @Steve’s estimate of the value of a Black 5, which you’d have thought would be near the top end of desirable motive power for many lines).

Tom

 

I think the other way to spell it out is “Just running passenger trains doesn’t turn a profit now”.

Special Event traffic is on the up, regular day to day traffic is downed so the answer is to run more events to bring people in, but without over stretching the volunteer resources. That’s one change to the business model.

Running FEs, charters, special services, training days, corporate days are all ways of pulling in vital funds that normal running days just don’t achieve. These often need to be done when the railway isn’t open for normal traffic and as such having Mon-Wed free is normally helpful. Another change to the model

Similarly there’s the balance of operating costs to visitors. Opening Thursday-Sunday allows a much more balanced operating cost compared to number of visitors and reducing the number of trains to suit also provides the same outcome. Again another change to the model.

People might not like the fact the SVR have currently 2x Network Rail Class 73s or lots of modern rail vehicles in store for other owners, but they are making money. Again providing these services is another change to the model.

There is lots going on people just don’t see and it is noticeable with the new management that there is a strive towards improvement and gaining the right model for the job.

 

aaaand right on cue, for the eleventy billionth time in this thread, to the surprise of no one, it's Job's comforter and his team of personal hobby horses!

 

All fine, but changing business model is risky. Diversification implies the need to keep the basis of the existing business model; change has to blend so that diversification is additional to what was there before.

Reading the above, I'm generally noticing a change of degree rather than kind - not so much a new business model, as working the old one harder and more effectively. Even if, where providing storage is concerned, the old strictures about the linear scrapyard may apply.

 

Either way, something has to change/alter, by a good few degrees to make it sustainable in to the future. As I said above, just running passenger trains is not the answer any more.

 

At the end of the day, how much a loco is worth is how much a seller is going to hold out for and how much a buyer is prepared to pay. A while back, I understand an industrial loco part way through an overhaul that was sold on sealed bids and I believe it sold for £20K. No other bid came near that figure and similar out of ticket loco later sold for £4K. It's always a guessing game until the deal is done.

 

Quite possibly. But when making change, as well as considering the costs, it can also be dangerous to over claim.

 

Realism, to my mind at least, works in a number of ways. It is all too easy to take the Accountant-like view that if you have more assets than you can reasonably use a any one time then it is reasonable to sell some of them and use the proceeds for another purpose, be that debt reduction or a new development. That does however ignore the point that the bigger fleets on the longer lines provide part of the attraction of the line, particularly if attractively displayed when not in use. Also, larger fleets provide insurance against unexpected failures - take the NYMR as an example where two engines expected to run fairly high mileages this year (63395 and 825) have unexpectedly had to be withdrawn for major repairs, and two others (76079 and 80136) are likely to be used sparingly as a result of various issues. In other words, there's safety in numbers and frequent diesel substitution for steam locos can have a seriously detrimental effect on passenger numbers. Lastly, a larger available pool of locos offers the opportunity to pick and choose based on condition when it comes to overhaul queues, albeit only to a point (if everything is run into the ground the options are limited!) but potentially useful if times are hard. Lastly, there is the effect on supporter morale if the "family silver" is sold. Most of the bigger lines in particular are more dependent on volunteer support than they would care to admit, despite ever-increasing paid staff levels. Volunteer support can be brittle at times and it is easy to lose people by upsetting them. Beware of stepping onto a very slippery slope would be my advice!

 

At the start of the year someone on a discord group told me that 45110 was now being considered for an overhaul (thus dumping proposals to start on 7325 next), they changed their potential position on that in quite a short time.

 

That’s probably a case of believing what you are told rather than the facts of the day. Currently there are no plans to overhaul anything beyond what is at Bridgnorth currently being done. There is a policy of clearing the decks currently, a much needed one. Too many engines got stripped down in a short period and it created an unworkable situation so finishing what’s been starter is the order of the day.

7325 was taken to Bewdley purely for some cosmetic attention and work to be carried out that would preserve its condition. I believe there might be a plan to do this to another loco at some point but by no means does that indicate any plans to strip them down.