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<DIV><FONT size=2 face=Verdana>Dear Eric / Mike,</FONT></DIV>
<DIV><FONT size=2 face=Verdana></FONT> </DIV>
<DIV><FONT size=2 face=Verdana>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.</FONT></DIV>
<DIV><FONT size=2 face=Verdana></FONT> </DIV>
<DIV><FONT size=2 face=Verdana>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!</FONT></DIV>
<DIV><FONT size=2 face=Verdana></FONT> </DIV>
<DIV><FONT size=2 face=Verdana>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.</FONT></DIV>
<DIV><FONT size=2 face=Verdana></FONT> </DIV>
<DIV><FONT size=2 face=Verdana>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.</FONT></DIV>
<DIV><FONT size=2 face=Verdana></FONT> </DIV>
<DIV><FONT size=2 face=Verdana>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.</FONT></DIV>
<DIV><FONT size=2 face=Verdana></FONT> </DIV>
<DIV><FONT size=2 face=Verdana>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.</FONT></DIV>
<DIV><FONT size=2 face=Verdana></FONT> </DIV>
<DIV><FONT size=2 face=Arial>Peter Lutman
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<DIV><FONT size=2 face=Arial></FONT> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; PADDING-LEFT: 5px; PADDING-RIGHT: 0px; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="FONT: 10pt arial; BACKGROUND: #e4e4e4; font-color: black"><B>From:</B>
<A title=eric.britton@ecoplan.org href="mailto:eric.britton@ecoplan.org">Eric
Britton</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
title=Sustran-discuss@list.jca.apc.org
href="mailto:Sustran-discuss@list.jca.apc.org">Sustran-discuss@list.jca.apc.org</A>
</DIV>
<DIV style="FONT: 10pt arial"><B>Cc:</B> <A title=mkilburn@civic-exchange.org
href="mailto:mkilburn@civic-exchange.org">mkilburn@civic-exchange.org</A>
</DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Friday, July 31, 2009 8:09 AM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> [sustran] Depreciation periods
for buses in Singapore</DIV>
<DIV><BR></DIV>
<DIV class=Section1>
<DIV>
<DIV
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<P class=MsoNormal><B><SPAN
style="FONT-FAMILY: 'Tahoma','sans-serif'; FONT-SIZE: 10pt">From:</SPAN></B><SPAN
style="FONT-FAMILY: 'Tahoma','sans-serif'; FONT-SIZE: 10pt"> Mike Kilburn
[mailto:mkilburn@civic-exchange.org] <BR><B>Sent:</B> Tuesday, July 28, 2009
11:39 AM<BR><BR><o:p></o:p></SPAN></P></DIV></DIV>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal><SPAN
style="FONT-FAMILY: 'Arial','sans-serif'; COLOR: navy; FONT-SIZE: 10pt">Does
anyone know over </SPAN><SPAN
style="FONT-FAMILY: 'Arial','sans-serif'; COLOR: #00007f; FONT-SIZE: 10pt">how</SPAN><SPAN
style="FONT-FAMILY: 'Arial','sans-serif'; COLOR: navy; FONT-SIZE: 10pt"> many
years Singapore depreciates its bus fleet and whether this is mandated by
law?<BR><BR>I am asking because Civic Exchange is conducting a study of
franchised buses in Hong Kong, as a major contributor to roadside pollution,
<BR>and we are looking for examples of jurisdictions that place some sort of
limit on the operating life of a bus.<BR><BR>In HK depreciation (ranging
between 14 and 20 years) is a key consideration, but I would be very
interested to hear of any control measures, <BR>such as roadworthiness test
requirements, environmental performance indicators, limits on engine type
(e.g. Singapore has banned all pre Euro <BR>and Euro 1 vehicles).<BR><BR>Many
thanks <BR><BR>Mike Kilburn<BR>Civic
Exchange<BR><BR><BR><BR></SPAN><o:p></o:p></P></DIV>
<P>
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