Saturday, 28 November 2009

British Waterways stripped of it's property portfolio? - would that be such a bad thing?

Back again. It's been a busy time on the BW front. More will be revealed over the next few posts I hope! So to story number one! This week has seen a flurry of press and political activity attempting to defend BW's property portfolio.

The origins of this story are rather interesting. What I have been told for sure is that certain very senior BW people arrived unexpected during the recent six monthly BWAF meeting with national user group representatives. In a state of high agitation, doing a desperate breathless in distress performance that would make Betty Paige blush, they announced that they believed the Treasury was again actively looking at stripping BW of it's property portfolio.

As a result off went everyone screaming blue murder. Leading the charge was IWA. Waterways MP's have since taken up the cry and a motion has been put down and a debate called for. A good and proper storm has brewed up.

Voices off like me have taken a slightly different starting point...

(Original version published in the Narrowboatworld forum)

Should BW keep its property portfolio?

BW's property portfolio is indeed a double edged sword that has turned on BW. (Or is it case that the wielder of the sword does not know how to handle it properly?)

As has been pointed out, the property portfolio sucked the best part of £80 million out of BW last financial year and there will doubtless be more bad news to come on that front when we get this year's results?

A BW with no property portfolio would also (heaven forbid!) have to spend all its time and energy focusing on the immediate well being and funding of the waterways, without the delusion that the property will always bail them out!

Poor BW! They would also have to change their business ethos towards being a full time navigation authority instead of distracting huge amounts of time energy and OUR resources into being property developers. Mr Evans and the Directors would of course no longer have all their present responsibilities, so their salaries and posts would have to be restructured to reflect this.

No wonder they are screaming blue murder!

The well-being of BW's fat cat directors is not the same as the well-being of the BW network and if they were purged from BW at the same time as the property portfolio that might not be a bad thing?

It would of course also throw the whole question of public funding of the waterways into sharp relief as the property portfolio would no longer be there providing 'cover' for wider government underfunding of BW.

Would such an outcome be a disaster or a real opportunity?


  1. Simon I don't know where you got your information from but I believe I was present at the meeting where the property story broke and I don't recall anyone in a state of 'high agitation' or being 'breathless', 'desperate' or in 'distress'.

    It was natural that the issue would be raised because the Politics Show was featuring the 'story' that weekend and several stakeholder representatives had been contacted. The only unusual aspect of the discussion was that no-one, including BW, had any official confirmation that the Treasury were indeed looking at the issue again (it was considered and dropped earlier this year). That position remains; the Treasury has yet to confirm the story and in the absence of a denial it would be remiss of the waterways movement not to give users and opportunity to express their opinion.

    But to address your main point. It is true that BW's property portfolio has suffered with the rest of the property market but that shows up on the balance sheet and doesn't have an immediate effect on the maintenance budget.

    The drop of £66 million represents 15% of the value of the portfolio but despite that the income from property was still £45.6 million and therein lies the crux of the problem.

    If the property portfolio was sold, each year BW would have to find that £46 million from other sources. That would increase the current annual maintenance budget deficit of £30 million by 150% - and that is why some knowledgeable people have predicted that the canals would be in an awful state in as little as 5 years time. That is why the major stakeholder groups have supported the petition and I hope your readers will too.

  2. It's not as if government did not fire a warning shot across the bows of BW with its OEP report telling them to put the property portfolio in a subsidiary company and that that BW in conjunction with Defra, Treasury and Shareholder executive would decide on BW's future.

    BW should have taken the hint!

  3. Before you do as Will says and all run off to sign the petition please read my subsequent post:

    BW retaining its Property Portfolio - what price?