Thursday, 30 July 2009

Mockery of Moorings Tenders process

I've mentioned before BW's policy of only offering mooring vacancies to the highest bidder.

This is what presently constitutes British Waterways' process for allocating vacant moorings on its waterways. Their justifications for this (and the almost universal opposition from the main boating user groups) can be seen in full detail here.

How to make a joke of your own system in public...

The item below (published on Narrowboatworld) shows how despite this being a system they unilaterally devised and imposed BW still can't get it to to work right!

"It appears that due to lack of interest from boaters, BW have partially suspended their tendering process at BW's 'flagship' development at Clarence Dock in Leeds.

A berth is currently advertised with a guide price of £2252 for a 17.5.m pontoon berth.

However if you read the small print below on the tender page, it kindly tells potential bidders: 'Berths at the site are currently available at the guide price as well as through the tender system'

In other words (unless you are really obtuse and have nothing better to do with your money), 'Please only offer bids below the guide price'

BW of course refuse to say what their 'reserve' price is on the berths and instead dear boater, you will have to make a bid below the guide price and see what happens.

A clearer example of how BW are abusing and manipulating the so called market process to set mooring fees is difficult to imagine. Thanks BW for demonstrating so clearly your intentions, the desperation with which you are trying to push up mooring prices and the thinly veiled contempt with which you hold potential mooring customers!"

(While it lasts, the tender advert is here. For future reference the tender reference number is no. 1034. What the add says presently is: "IMPORTANT NOTES: This vacancy is for leisure use only. However, residential vacancies are also available. If you are interested in securing a mooring at Clarence Dock, whether leisure, residential, single or double berth (leisure only), please contact the Moorings Officer. Berths at the site are currently available at the guide price as well as through the tender system.")

It seems that BW policy can be suspended at will and without notice.

Welcome to the real world.

BW are learning the hard way that their policy is a double edged sword - prices can go down as well as up! No surprise, they launched into this one before the credit crunch, believing (as they did with their property portfolio) that the only way was up.

(Those of us who queried what happened in less favourable times were dismissed as doom merchants and cranks.)

Reserves and a price fixing allegation

What has got me really vexed is that this example puts paid to the lie that the highest bidder system BW are using is a true market system.

As here where demand is low it is clear that BW are in fact actively preventing the price going down to it's true market level - through the system of undisclosed reserves on their tenders. Unlike E-bay or a traditional auction the bidder does not get to know if they have hit the reserve when they bid.

Also there is no way of knowing and offering the reserve price directly following the auction (as is frequently possible on E-bay or in any other traditional auction.)

As a result BW go round the whole cycle again, losing another 6-8 weeks rent on the mooring, assuming someone bids over the same reserve second time round.

'Concealing' multiple vacancies?

Early on in the auction process BW advertised several berths on the same site simultaneously. Again if they had spent a morning in an actual auctioneers (or took any advice from one) they would have spotted this next story coming.

A group of boaters already on the mooring where the vacancies were advertised, effectively spread bet for the vacant moorings at below the rate they were already paying! I believe three bidders won!

BW apparently only realised what had happened when one of the successful bidders asked if BW minded if they left their boat where it was (and please could you send the refund for the reduced fee rate I have just successfully bid for?)

BW do not auction similar berths simultaneously anymore, apparently for fear of further examples that would demonstrate they are overcharging existing customers?

A less charitable view would be to suggest that they are price fixing by failing to publicly disclose the actual number of vacancies in unpopular sites in an transparent way? In any normal auction if you know there are multiples of the same lot available, bidders know and you bid lowre especially if you can only use one of what is on offer.

There's a hole in my flagship dear Liza!

The moorings in Leeds are in what is supposed to be of one of BW's 'flagship' property developments so were in my view always bound to be (over) priced in that frame of mind.

Now reality has struck.

In addition local and visiting boaters also complain that there are problems with the facilities. The Waterscape advert claims full facilities for the berths. Reports I have had from the ground claim:
  • That the electricity bollards seem to be on non standard payment cards,
  • For refuse and Elsan you have to go '300 yards' downstream, through Leeds Lock if taking the boat.
  • No pump-out, showers or laundry.
  • Pets are banned by some agreement with the Clarence Dock Co.
  • Parking nearby is apparently also virtually impossible.
Towpath Tom-toms also say that a number of moorings that have been re-tendered have not been taken up by apparently successful bidders because of inaccurate descriptions of the berths on offer?

My conclusion?

What a con BW are running!

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