The Elephant in the room...

Many thanks 46118

 

Scottish coal was £149 per ton, the Russian is £199 per ton.

 

The SVR are continuing into 2014 with the "Annual Family Pass" introduced last year. Valid for unlimited visits within the 12 months from issue, but only on ordinary service days. It appeared to many as a bargain last year when introduced, the cost was £95 which represented slightly more than two family freedom of the line visits. ( Up to two adults and four children)

This year the cost is £120, or £100 if renewing an existing pass. Bearing in mind that the family pre-book fare for 2014 is £47-20, again this annual pass to me represents a remarkable bargain for the "repeat-visit" family, but I still wonder if it has been somewhat under-priced.

(Now then Steven, "we have shown you ours...."!)

46118

 

Oh, 46118 - we'll get ourselves put on KentYeti's naughty steep (hopefully along with some of his endless supply of BSWs!)

The NYMR increases will be:

Pickering to Grosmont & VV (All Line ticket) - individual £18 to £19, Family (2 plus up to 4 children) £36 to £42.
Pickering to Whitby & VV (All Line Ticket) - individual £24 to £25, Family (2 plus up to 4 children) £48 to £54.

Steven

 

I agree that there isn't an optimum length of line. In fact, the whole thing is subject to a host of variable criteria that will all have an effect on both income and expenditure. A line with significant infrastructure is going to have to spend relatively more on its upkeep if it isn't going to collapse than one that has no tunnels, bridges or unstable embankments to worry about. A ten mile line with steep gradients is going to need much larger locomotives to shift its passengers than a 10 mile line that is like a billiard table and that will be reflected in both fuel costs and wear and tear. Fares are very subjective but a railway can really only charge what the visitor will pay and that comes down to perceived value for money. In this, the comparison is not between different railways but differing attractions in the locality. If your railway provides a half-day of 'doing' it can only realistically charge a fare comparable to other local half-day attractions. Location also comes into it, as well. As a good example, the Lynton & Barnstaple, being in a relatively expensive holiday area, can charge £7 for an adult return wheres the Middleton Railway only charges £5 for an adult return because it knows that, being in a city, it can't charge more for what is a similar length journey both in time and distance. The L & B also has the advantage of being narrow gauge with the lower costs involved because of this.
Another variable that can significantly affect costs is frequency of service. People will probably wait a good while longer for the next train if it is for a longer train ride (but there must be something for them to do whilst waiting.) I'd suggest that 1½ hours is an absolute maximum gap between trains for all but the longest railways and it really wants to be much less for those that aren't a whole day attraction. This means that lines longer than 5 miles really need a two train service, which significantly increases operating costs and to remain viable probably needs a two-fold increase in bums on seats.. However, once you get to a two train service, a significantly longer mileage is feasible before three trains becomes necessary because run-round times are fairly constant whatever the length of line and you only get two per return journey. It can all fall apart if passing loops aren't in the right place, though!
I wonder if it would be practical for an economist or similar to derive a formula that takes into account all the differing variables and arrive at the break points below which a railway's operation is unsustainable in the long term? More simplistically, I'm sure that most railways know there sustainability levels in terms of bums on seats and a simple graphical presentation might be possible if all this could be collated.

 

There is no optimum length of line. There are major lines which, if they continue to operate on their current business model, are unsustainable; no business can survive in the long term whilst making large annual losses, you can keep running at a loss for a surprisingly long time, but eventually reality will catch up with you. Equally, there are small ones which appear to be bumping along the bottom, though these have the advantage, being small and with lower fixed costs, that they may be able to adapt more easily and, with better management, pull themselves out of the mire.
The main issue is cost control. If a line's management feel that they cannot operate without using large steam locomotives hauling six-coach trains, even when those trains spend much of their time carrying only a score or less passengers, then they are unsustainable. The days of cheap coal, track materials and signalling equipment bought for a song, not to mention free labour and management, are gone. Increasingly, it is the wage/salary bill that is the Achilles heel of the larger HRs.
Then there is the issue of proliferation. Aha, says everyone, Micheal Draper brought that up yonks ago and he was wrong! Well, maybe then, but now? There must be a limit to the number of HRs that the leisure economy can support and I have a feeling that we may now be reaching it.
Economics apart, the availability of voluntary labour, or rather its increasing unavailability, is already an issue for many HRs. The problems resulting from later retirement have already been mentioned, but it is becoming increasingly difficult to attract and keep volunteers of working age, due to the increasing demands of employers. 20 years ago most employees would expect not to work at weekends, but this is no longer the case, especially in the rail industry - rail workers being, IMHO, the most useful of all volunteers. A further threat is increasingly bureaucratic safety rules; I'm all in favour of safety, but the fact is that the model adopted by Government increases the pressures on HR managers, which has a negative effect on their ability to control costs. Moreover, the increasing degree of personal responsibility involved acts as a disincentive to potential volunteers. There's not just one elephant in the room, but a whole herd!

 

I have heard it said that heritage Railways are not best run by Railway Enthusiasts but by Enthusiastic Railwaymen

 

Could we turn this equation into some sort of heritage-railway-meets-fantasy-football-league competition?

Sounds something fun to keep us going in General Chat.....

 

I'm inclined to take issue with that statement. The railway industry is an expensive industry largely because that is the way it has always been. I come from the mining industry, which is another expensive industry and when I went into another career, it took me a while to come to terms with the fact that things could be done at far less cost and just as well and safely. I thought that the budgeted costs of the re-instatement of Pl 2 at Whitby were on the high side when first given but have seemingly escalated tremendously since Network Rail took over the project management.
Heritage railways are best run by railway enthusiasts who have the skills and knowledge to deliver, no matter what their background.

 

I think that quip came from the then GM of the Ffestiniog back in the 1950s.

I've always taken it to be a metaphorical statement, not a literal one - in other words, to run a railway, you need to think and act in the best traditions of railway service at its best. I don't read it to equate "railwaymen" with "people who work or worked on the big railway". Rather, a "railwayman" is someone who acts like one. I suspect however than when first spoken, railway preservation was much less well developed than now and rather more "out there" in terms of social acceptance: in those circumstances, if it got sightly misinterpreted to mean railway preservation was best done by people who were literally railwaymen (working on the mainline system), then that was probably helpful in making the case that heritage railways were both respectable and serious. But certainly in today's world, to me, heritage railway volunteers need to act in the best traditions of the railways at their best, but that doesn't mean that coming from a mainline railway background is a pre-requisite to be successful.

Tom

 

I didn't say that HRs are best run by enthusiastic railwaymen, but that rail workers are the best volunteers. There is a subtle difference! In my experience, professional railwaymen are sometimes not best equipped to deal with the purely economic aspects of heritage railways, possibly because of their exposure to a more financially generous culture in their regular employment, but their qualifications and experience in practical matters are invaluable on a heritage railway.

 

I didn't quote you. My post referred to threelinkdave's post. There is no doubt that a railwayman's experience in practical matters can be invaluable when it comes to the detail involved in the operation of a heritage railway.

 

Re my post - I have allways taken the statement quoted to mean heritage railways are best run by those who think like railwaymen first and enthusiasts second. Its the handed down 150 years of experience which is invaluable volunteer or full time

 

I would agree - the cost of some Network rail projects are unbelievable given the end result.

 

Depreciation is not a fund that is banked in any way. Unfortunately even if it was, it would not provide sufficient funds to refurbish many assets. I read somewhere on here a Mk1 coach cost approx £1,500 in the 1980s. Even if £1,500 was in a fund it would not go very far in ensuring the coach was in tip top condition.

Depreciation is not allowable for tax purposes, so cannot be used to reduce taxable profits.

 

No it clearly isn't being banked on some lines, hence the worries of the OP - but that does not mean to say that it couldn't be. The basic problem is that not enough is being set aside to maintain the operation in a "steady state" (presumably the overall financial state doesn't allow this) so hard choices are made, and this starts to reveal itself 2 or 2 years later when the overall condition of some assets begins to decline.
Something I haven't seen discused anywhere on here is legacies. A sensitive subject of course, but as time moves on many railway become beneficiaries of sums large and small from wellwishers and former members. I expect it is very rare to see these sums used for mundane things like fleet maintenance. THey probably go towards one of more special projects (which will ultimately create more assets to be maintained).
Sadly the long term consequence if this is fewer "ordinary" operating days, and fewer service trains on other days leaving only special events as big money spinners. This trend will disguise a worrying decline in the fortunes of some lines.

 

With regard to legacies the SVR Charitable Trust, launched this year, has specific provision for bequests.

 

I don't follow he logic here - why would an increase in legacies lead to fewer "ordinary" days?

Tom

 

And that is going to be a problem, that year on year coaching stock needs more expenditure and there is less in the pot. in my view its going to be this , that will be the thing that brings some railways to the brink. if your coaching stock isnt fit to run, you cant use it full stop, so you then have a problem, no stock, no income
as coaches need more work, often its things that have to be sent away , like metal spraying vac cylinders because you dont have enough spares, or buckeyes because they have worn to the point that you have to fail the coupler, but then find that your spares are just as bad, so you have to pay to have them overhauled all stuff that pushes your budget over the edge. add onto this unexpected expenditure when you find steam heat pipe thats got aspestos lagging that has to be urgently dealt with. then you have the man power thing, your work load requires more staff, but theres no money to do it, and even if there was, how many people out there are skilled C&w fitters who can step straight in, and then, would they work for min wage? because that would be all the heritage railway could afford. sorry to sound negative, but heritage railways that do not or have not invested in future needs will be the ones who will most likily fail.

 

That's not the logic I intended Tom. I was making two points in one post but doing it badly. I was making the point that legacies will (rightly) be used in a way that leaves something tangible to commemorate the legator, rather than simply as cashflow, and so in the long term they add to the maintenance overhead. I then returned to the main subject with the obseevation that an ongoing decline in operating revenue will gradually lead to a smaller overall operation to reduce running costs.