Middleton Railway Trust Ltd. (MRT) Policy Directive

Reference: FIN/3 (1/05)

Subject: Acquisition, disposal and hiring of rolling stock

For the attention of: All Council members.

This Directive does not form part of the Safety Management System.

Revision History

Previous versions of this Directive were as follows.

Reference 1/05/1 was the initial version.

This version implemented the revised numbering scheme for directives, but made no other changes to the content.

Content Summary

This Directive contains the following sections:

Introduction

Short-term Hires or Loans of Rolling Stock

Medium-term Hires or Loans of Rolling Stock

Long-term Hires or Loans of Rolling Stock

Purchase of Rolling Stock

Disposal of Rolling Stock

Introduction

1. This Directive covers the procedures for the acquisition or disposal of items of rolling stock, whether by purchase or by loan, and for hiring items of rolling stock in or out. It covers the procedures for setting up short- term, medium-term and long-term arrangements periods, where these are defined for this purpose to cover the following periods:
   1. short-term – any period up to or including three calendar months;
   1. medium-term – any period from three months up to or including one calendar year; and
   1. long-term – any period of more than one year.

In the cases of acquisition by purchase or of disposal the word permanent may be used instead of long-term, as an expression of intent, but as far as these procedures are concerned the two are equivalent.

2. Any proposal for:

• the hiring in or out of any item of rolling stock;

• the acquisition of any item of rolling stock, for any period, whether by purchase, loan or gift; or

• the disposal of any item of rolling stock;

must be brought to the Council for approval. The normal assignment of responsibility for creating such proposals and bringing them to the council is defined below, as is the normal assignment of responsibility for negotiating the details of such a proposal once it has been approved by the Council.

Short-term Hires or Loans of Rolling Stock

• Proposals for hiring in any item of rolling stock for a short-term period, or bringing it in on a short-term loan, will normally need to be justified to the Council primarily on the basis of the revenue that might be generated, as balanced against the costs of the hire or loan, such as transport costs and steaming fees, although it may also be appropriate to justify such proposals at least partially on the basis of the publicity that they may generate. Hence,

• the responsibility for generating such proposals, such as for the annual steam gala or other special events, will normally rest with the marketing committee;
  • the marketing committee should formulate a policy for such proposals, which must then come to the council for approval;
  • this policy should include a requirement that it be reviewed regularly, at intervals of not more than three calendar years;
  • any enquiries or information from outside organisations concerning the availability of such items of rolling stock, or the possibility that they might be considered for hiring in, should be referred immediately to the marketing committee;
  • any proposals formulated by the marketing committee in accordance with the agreed policy, whether initiated by them or by enquiries or information from outside organisation, should be brought to the council for approval as part of the normal report of the marketing committee to the council.

• If the item of rolling stock that is being proposed for hire or loan is unusual by comparison with items in the MRT’s own fleet, then it may be necessary for the Council to consult with other officers as follows, to ensure that the item will be able to be operated safely on the line.
  • If the item is longer, heavier or has a longer wheelbase, then the civil engineer should be consulted.
  • If the item could pose unusual requirements for running maintenance, then the mechanical engineer should be consulted about them.
  • If the item could pose unusual requirements for operation that might be beyond the capabilities of some of our regular crews, then the operating superintendent should be consulted about them.

• Proposals for hiring out or loaning out any item of rolling stock for a short-term period will normally need to be justified to the Council on similar terms as for hiring in items or bringing them in on loan, for instance if it would be as part of an exchange that will allow an item to be brought in favourable terms. Thus, the case for such a proposal will need to include the costs of the hire or loan, such as transport costs and steaming fees. Hence, the responsibility for generating such proposals will again normally rest with the marketing committee, and the procedures for all aspects of handling them should be as described in clause 3 above.

• For any proposal for the hire or loan out of an item of rolling stock, the Council must consult with the mechanical engineer and the operating superintendent, to ensure that the MRT would be able to continue to operate without difficulty during the period when that item would be away from the railway.

• If the Council approves any proposal for the short-term loan or hire of an item of rolling stock, in or out, then:
  • it should set limits for the maximum expenditure on transport, steaming fees etc, and for any expected income from steaming fees or equivalent; and
  • thereafter, responsibility for negotiating the details of the loan or hire within these limits will normally rest with the operating superintendent, unless the Council agrees to delegate it to some other person in a specific case, which it should normally only do at the request of the operating superintendent.

• If the person responsible for negotiating the details of a loan or hire finds that it can not be arranged within the limits set by Council, then they should report this back to the Council, which will decide whether to approve amendments to these limits. Otherwise, they are only required to report back to the Council as follows:
  • at each meeting they should indicate briefly whether the negotiations are proceeding satisfactorily, and if not indicate whether Council is likely to be required to take any action in order to ease the progress of negotiations;
  • they should notify Council if other officers need to be involved, as described in clause 9 below; and
  • they should notify Council when agreement has been reached.

• If, in the course of negotiating the details of a loan or hire, queries are raised concerning particular aspects of insurance cover, then these should be referred to the company secretary. If the queries appear to be unusual it may also be appropriate for the company secretary to report them to the Council, in case they may indicate any need to review an aspect of the insurance policies.

Medium-term Hires or Loans of Rolling Stock

1. Proposals for hiring in any item of rolling stock for a medium-term period, or bringing it in on a medium- term loan, will normally need to be justified to the Council on the basis of a need to provide cover for an expected gap in the MRT’s ability to operate its normal services. Hence:
   1. the responsibility for generating such proposals will normally rest with the mechanical engineer, who should consult the operating superintendent over the details of any such proposal before bringing it to Council;
   1. any enquiries or information from outside organisations concerning the availability of such items of rolling stock, or the possibility that they might be considered for hiring in, should be referred immediately to the mechanical engineer;
   1. the mechanical engineer should bring any such proposal to the Council as part of his normal report.

1. Proposals for hiring out or loaning out any item of rolling stock for a medium-term period will normally need to be justified to the Council on similar terms as for hiring in items or bringing them in on loan, for instance if it would be as part of an exchange that will allow an item to be brought in favourable terms. In particular, the justification for any proposal to hire out an item primarily to generate revenue would need to include the expected availability of alternative items to meet the MRT’s needs, the risks of any damage being done to the item through careless handling, and the balance of financial issues such as transport costs and steaming fees. Hence:
   1. the responsibility for generating such proposals will again normally rest with the mechanical engineer, in consultation with the operating superintendent;
   1. any enquiries from outside organisations concerning the availability of items of rolling stock for hire or the possibility that they might be considered for hiring out, or information from outside organisations concerning possible needs to hire items of rolling stock, should be referred immediately to both the mechanical engineer and the operating superintendent;
   1. if they decide that such a proposal is justified, then they should agree between them which officer will bring it to the Council as part of their normal report.

1. Other procedures for medium-term loans or hires of items of rolling stock are as in clauses 4 and 6 to 9 above.

Long-term Hires or Loans of Rolling Stock

1. Long-term hires or loans would normally only be considered as an alternative to permanent acquisition of an item, and the procedures in clauses 13 to 16 below will apply to them.

Purchase of Rolling Stock

1. A proposal for acquiring an item of rolling stock permanently, either by purchase or by gift, or for acquiring it through long-term hire or loan, will normally need to be justified to the Council on the basis of factors such as its suitability to the MRT (as indicated, for instance, by its size, its consistency with the museum acquisition policy, and the extent to which it could play a useful role as an operating vehicle), the amount of restoration work that it would be likely to require, and its cost. Since opportunities to acquire suitable vehicles might arise from a variety of sources, any member of the Council may originate such a proposal, but before bringing it to Council they must consult with the following officers and sub-committees:
   1. the mechanical engineer, over aspects such as the condition of the item and the likely need for restoration;
   1. the operating superintendent, if it is considered that it might be an operating vehicle, over aspects such as how useful a role it could play in this respect;
   1. the civil engineer, if it is unusual by comparison with items already in the railway’s own fleet, and particularly if it is longer, heavier or has a longer wheelbase, over aspects such as whether it would be able to travel safely on the line;
   1. the collections committee, over the extent to which it would be consistent with the museum acquisition policy.

1. Once these consultations described in clause 13 above have taken place, the proposal should then be brought to the Council as a special written report, which should include the outcome of the above consultations, as follows.
   1. If the condition of the item has been such that the mechanical engineer has considered it necessary to make an inspection of it before a decision could be made about the proposal, then this special report should be made by the mechanical engineer, and should include sufficient details of the inspection and of the condition of the item for the Council to be able to make an informed decision.
   1. If the mechanical engineer has not considered it necessary to make an inspection of the item, then he and the member originating the proposal should agree between them which one will submit the report.

1. If the Council approves such a proposal for acquiring an item of rolling stock, then it will need to assign responsibilities for the following aspects of the transaction.
   1. The financial arrangements, which may involve any of
2. the treasurer (to deal with actually paying for the item, and obtaining appropriate invoices, receipts or other similar documentation),
3. the company secretary (if any long-term agreement for hire fees or the equivalent needs to be negotiated),
4. some other officer (if, for instance, the price of the item needs to be negotiated, within limits that will be set by the council), or
5. some other officer delegated to deal with any aspect of these arrangements on behalf of the relevant officer, although this should normally only be done at the request of the relevant officer from whom it is being delegated.
   1. The movement of the item to the railway, which will usually involve the operating superintendent, but may be delegated to some other officer, although this should normally only be done at the request of the operating superintendent.
   1. Any commitments that may be needed to restoration or other work on the item, which will usually involve the mechanical engineer in negotiations over what commitments can be made, and over what time scale, and the company secretary in drawing up a suitable agreement to embody these commitments, but again either of these may be delegated to some other officer, although this should normally only be done at the request of the relevant officer from whom it is being delegated.

1. Where the acquisition of an item of rolling stock requires a long-term agreement to be drawn up, the procedure for this will be as follows.
   1. The agreement will normally be drafted by the company secretary on the basis of the principles set by the Council, and usually also following verbal negotiations with the other party or parties, but either of these may be delegated to some other officer, although this should normally only be done at the request of the relevant officer from whom it is being delegated.
   1. The company secretary will then report the outline of the draft to the Council before a written version of the draft is given to the other party or parties for discussion. If the outline is not considered acceptable by the Council then further negotiations will be required, until a revised draft is produced whose outline is approved by the Council.
   1. Once the outline of the draft has been approved by the Council, power to make minor amendments to the wording of the draft will be delegated to the company secretary, but any significant requests for change to the draft must be reported to the Council, and may only be made within such scope as the Council may authorise.
   1. The company secretary must report progress with the negotiations at each meeting, but once the draft is acceptable to the other parties then the company secretary will normally be authorised to approve it on behalf of the Council.
   1. Draft agreements will not normally need to be reviewed by the company solicitor, but the Council may require such a review if it considers that there appear to be particular issues of principle which are sufficiently complicated, or sufficiently different from the standard patterns of the railway’s rolling stock agreements, for there to be a significant possibility that the wording of the agreement might be ambiguous, or might commit the railway to more than it intended.

1. Once any agreement for the acquisition of an item of rolling stock has been approved, then the company secretary will:
   1. produce the final copies,
   1. arrange for them to be signed and sealed, and
   1. arrange for the railway’s copy to be held securely.
   1. The company secretary will also ensure that, if appropriate, the item is added to the railway’s asset register, and in conjunction with the treasurer will ensure that the auditors are suitably informed of the increase in the value of the railway’s capital assets.

Disposal of Rolling Stock

1. There is a basic predisposition against disposal of any item of rolling stock which has been formally accessioned as part of the railway’s museum collection, irrespective of whether or not that item, so that any proposal for disposal of such an item would therefore be highly unusual. Hence:
   1. any member of the Council wishing to originate such a proposal would need to present a very strong case for it, which would probably need to include:
2. ensuring that the proposed new owner would make a firm commitment to caring for the item better than the MRT had been able to do, and
3. ensuring that the disposal would definitely enable some other item of rolling stock that was more suitable to the MRT to be obtained in its place.
   1. Any such proposal must be considered first by the collections committee, which should make a recommendation to the Council as to whether it considers that disposal of the item could be justified.
   1. It would then normally be expected that, if the Council approved such a proposal, it would bring it to a general meeting of the MRT before putting it into effect.
   1. If such a proposal is to be put into effect, then the procedures required by the Museums & Galleries Commission rules must be followed, which currently require that:
      1. such an item must first be offered to another registered museum;
      1. if no such museum wants the item, it may then be offered on the “open market”;
      1. then, if no-one wants it, it can be disposed of as the MRT Museum sees fit, which could include sale for scrap.

1. There is also a basic predisposition against disposal of any item of rolling stock which could be regarded as part of the MRT’s museum collection, even if that item has not been formally accessioned, so that any proposal for disposal of such an item would also therefore be highly unusual. Hence:
   1. any member of the Council wishing to originate such a proposal would need to present a very strong case for it, which would probably need to include:
2. ensuring that the proposed new owner would make a firm commitment to caring for the item better than the MRT had been able to do, and
3. ensuring that the disposal would definitely enable some other item of rolling stock that was more suitable to the MRT to be obtained in its place.
   1. Any such proposal must be considered first by the collections committee, which should make a recommendation to the Council as to whether it considers that disposal of the item could be justified.
   1. It would then normally be expected that, if the Council approved such a proposal, it would bring it to a general meeting of the MRT before putting it into effect.

• Similarly, there is a basic predisposition against disposal of any item of rolling stock that could not be regarded as part of the railway’s museum collection, although here this predisposition is not so strong. Hence, again:
  • any member of the Council wishing to originate such a proposal would need to present a very strong case for it, which would again probably need to include:
• ensuring that the proposed new owner would make a commitment to caring for the item better than the MRT had been able to do, and
• ensuring that the disposal would enable some other item of rolling stock that was more suitable to the MRT to be obtained in its place.
  • In general it would probably still be appropriate that, if the Council approved such a proposal, it should bring it to a general meeting of the railway before putting it into effect, but this would be for the Council to decide.

• If the Council approves such a proposal for disposing of an item of rolling stock, then it will need to assign responsibilities for the following aspects of the transaction.
  • The financial arrangements, which may involve any of
• the treasurer (to deal with receiving payment for the item, and generating appropriate invoices, receipts or other similar documentation),
• the company secretary (if any agreement for the future of the item needs to be negotiated),
• some other officer (if, for instance, the price for the item needs to be negotiated, within limits that will be set by the Council), or
• some other officer delegated to deal with any aspect of these arrangements on behalf of the relevant officer, although this should normally only be done at the request of the relevant officer from whom it is being delegated.
  • The removal of the item from the MRT, which will usually involve the operating superintendent, but may be delegated to some other officer, although this should normally only be done at the request of the operating superintendent;

• Where the disposal of an item of rolling stock requires an agreement to be drawn up to safeguard its future, this will be dealt with as in clauses 16 and 17 above, with the company secretary being responsible for ensuring that, if appropriate, the item is removed from the MRT’s asset register, and in conjunction with the treasurer being responsible for ensuring that the auditors are suitably informed of the change in the value of the MRT’s capital assets.

Drafted by A. J. Cowling and approved on 18^th January 2005.