[sustran] Re: Depreciation periods for buses in Singapore

Howes, Alan P Alan.Howes at atkinsglobal.com
Thu Aug 6 17:55:08 JST 2009


I hesitate to add to Peter's words of wisdom ...

But I would stress that if the aim is to cut pollution (and a laudable
aim that is), limits on vehicle life are a very crude way of doing it.
Far better to have specific limits on emission levels, perhaps tied to
engine type (Euro IV, V etc) - OK it takes more effort to specify and
enforce, but it's well worth the effort.

China's daft regime of limiting (urban?) diesel buses to an eight(?)
year life results in operators buying under-sized, under-engineered
buses which meet neither the needs of the passengers nor the needs of
the operators - and in many cases over-taxing the too-small engines
results in excessive pollution anyway.

The other point to remember is that, because of higher load factors,
buses are a much better way of transporting people in terms of emissions
per person-kilometre. If you make things too difficult/expensive for the
bus operator, you can end up driving people back onto more-polluting
private transport. This argument perhaps applies even more to trains,
particularly in the UK - but that's another story for another list ...

Regards, Alan Howes
Atkins Transport Planning
(currently in Kuwait)


--- In sustran-discuss at yahoogroups.com, "Peter Lutman" <lutman at ...>
wrote:
>
> RFI: Depreciation periods for buses in SingaporeDear Eric / Mike,
> 
> Depreciation is an internal matter for the owner / operator of the
vehicle and can be approached in one of several ways. Some operators
will use "straight line" depreciation writing down the initial cost in
equal instalments over a number of years that they choose. Some coach
operators will write down the amount over say 8 years and use the
second-hand value towards the purchase price of a modern replacement.
Others will use a percentage of the initial cost and the remaining
balance each year to reflect the lower maintenance costs in the
vehicle's early years and the higher cost as it grows older. (Even
though depreciation is a non-cash charge used only for the books and
maintenance is a real cost affecting cash flow, balancing these can be
useful for accounting purposes). It is common in well managed companies
to provide for not just historic depreciation, but also for replacement
of the asset which will cost more as a result of inflation and
imposition of higher standards by statutory authorities e.g. Euro IV or
V engines.
> 
> When I ran a bus company in the UK, we wrote down minibuses over 4
years, midibuses over 8 years and heavyweight single and double deck
buses over 14 years, but many lasted longer. London Transport got rid of
hundreds of rear engined double deckers in the 1980s at far less than
their written-down value (and wrote off the balance) becuase they had
problems maintaining these vehicles. Currently they are disposing of 7
year old articulated buses in a similar way because the Mayor doesn't
like them!
> 
> The operating life of a bus is quite different from the bookkeeping -
there are thousands of fully depreciated UK buses well over 14 years old
used on school contract or other low-mileage work which are fully
depreciated. The statutory requirements are that every vehicle must be
presented annually at a Government Test Centre where it must meet
rigorous safety and environmental standards before being permitted to be
used for a further 12 months. Spot checks may be made in the intervening
period.
> 
> I seem to recall that Shanghai had a limit on the age of buses which
could be used in that region, and I believe that it may have been as low
as 7 years. While this may have been realistic for some of the rubbishy
diesel buses which could shake themselves to bits, it was not sensible
for the trolleybuses which can last for 25 or more years and did not
seem to be applied to them.
> 
> Turning to Hong Kong, all of Citybus and New World First Bus vehicles
are air-conditioned as are the majority of Kowloon Motor Bus's fleet
which makes them even greater polluters. Citybus recognised the
pollution problem (Causeway Bay being one of the worst-affected areas)
and tried hard to persuade the authorities that some of the very high
frequency routes should be converted to Trolleybus operation. They
converted a double-deck diesel bus into a Trolleybus with a small
auxiliary engine for off-wire and depot running and erected a test track
in their parking depot near Aberdeen. Alas, the authorities did not want
to know - even the proposals to demonstrate the benefits on Aberdeen
local bus routes and / or the redevelopment of the former Kai Tak
airport were rejected. The same attitude was applied when Hong Kong
Tramways built 3 modern-looking electric trams with air-conditioning and
sought permission to charge a supplementary fare just as the buses do.
This was refused despite the fact that the trams are totally
non-polluting at the point of operation (although the Lamma Island Power
Plant may produce a little more) so the A/C units on the trams were
removed.
> 
> Summing up, if a jurisdiction mandates that no PCV will be certified
for further use after a certain age, that is one thing. It has nothing
to do with the depreciation policies of the operator. Hong Kong only has
itself to blame for refusing to try totally non-polluting Trolleybuses
despite having a willing, progressive operator.
> 
> Peter Lutman FCILT
> 
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