[sustran] Re: Depreciation periods for buses in Singapore

[Peter Lutman]

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

********************************************************************
This email and any attachments are confidential to the intended
recipient and may also be privileged. If you are not the intended
recipient please delete it from your system and notify the sender.
You should not copy it or use it for any purpose nor disclose or
distribute its contents to any other person.
********************************************************************


  ----- Original Message ----- 
  From: Eric Britton 
  To: Sustran-discuss at list.jca.apc.org 
  Cc: mkilburn at civic-exchange.org 
  Sent: Friday, July 31, 2009 8:09 AM
  Subject: [sustran] Depreciation periods for buses in Singapore


  From: Mike Kilburn [mailto:mkilburn at civic-exchange.org] 
  Sent: Tuesday, July 28, 2009 11:39 AM



   

  Does anyone know over how many years Singapore depreciates its bus fleet and whether this is mandated by law?

  I am asking because Civic Exchange is conducting a study of franchised buses in Hong Kong, as a major contributor to roadside pollution, 
  and we are looking for examples of jurisdictions that place some sort of limit on the operating life of a bus.

  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, 
  such as roadworthiness test requirements, environmental performance indicators, limits on engine type (e.g. Singapore has banned all pre Euro 
  and Euro 1 vehicles).

  Many thanks 

  Mike Kilburn
  Civic Exchange







------------------------------------------------------------------------------


  -------------------------------------------------------- 
  To search the archives of sustran-discuss visit
  http://www.google.com/coop/cse?cx=014715651517519735401:ijjtzwbu_ss

  -------------------------------------------------------- 
  If you get sustran-discuss via YAHOOGROUPS, please go to http://list.jca.apc.org/manage/listinfo/sustran-discuss to join the real sustran-discuss and get full membership rights.

  ================================================================
  SUSTRAN-DISCUSS is a forum devoted to discussion of people-centred, equitable and sustainable transport with a focus on developing countries (the 'Global South').
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://list.jca.apc.org/public/sustran-discuss/attachments/20090731/bc6c9da6/attachment.html