Report doubts LT's wisdom
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Fleetline sale: big blunder.
LONDON TRANSPORT's premature disposal of more than 2,000 seven-year-old Daimler Fleetline double-deckers over the past five years may yet go down as one of the bus industry's greater blunders. There is a strong hint of this in last week's Monopolies and Mergers Commission report on LT's bus maintenance, writes ALAN MILLAR.
While most of the MMC's criticisms of LT have been accepted by its management and give it more ammunition with which it can pursue costcutting exercises in the face of resistance from both its unions and from the Greater London Council, the Fleetline disposals are another matter altogether.
Had LT used more accurate data, the buses might well have been kept and the overseas and public and private sector British operators which have taken advantage of the bargain basement availability of modern double-deckers would have been deprived of such useful vehicles.
LT bought 2,646 Fleetlines and 164 Metropolitan double-deckers between 1970 and 1978 and opted to start selling them in 1979 rather than use them to extend one-man operation. LT cited high overhaul costs, poor reliability and frozen one-man operation plans as reason enough for their disposal.
Older Routemaster rear entrance buses were kept instead, and some of these could be 28 years old before they are taken out of service. Little more than 400 Fleetlines are left in service now.
But according to the MMC report — which also benefited from information from Ensign Bus (the dealer that has resold most of the redundant Fleetlines), National Bus (which has bought many of them), Leyland (which built them), and Metro-Cammell Weymann — even LT now admits that they are being operated "very successfully" in one of its own districts.
LT did add that they cost 41p per mile to run, against 34p for newer Metrobus and 36p for Ti tan buses, but commented that "other operators have historically different maintenance methods which are more suitable for dealing with Fleetlines".
Two unsatisfactory aspects of LT's bus purchasing policy led to the disposal plan. The report spells it out. "LT seems to have been too ready to replace the buses rather than tackle the real causes, which lay mainly in its maintenance organisation and policy not to shift to one-man operation at a faster rate. This policy has since been changed. As the GLC provides LT with grants for capital expenditure, the standard commercial disciplines — the scarcity of capital funds and the recurring burden of debt servicing — are absent."
And it has dealt a damning blow to the financial basis for LT's decision, saying the wholelife costing data available to management were "inadequate and inaccurate" in 1979 when the decision was taken to scrap the Metropolitans and 2,300 of the Fleetlines. The end result was a decision taken for strategic considerations rather than "clearout economic justification".
In its initial response to the MMC report, LT last week was unrepentant. "With the benefit of hindsight, the executive still believes the decision to replace the Fleetlines was correct. While the executive accepts the criticism that maintenance of Fleetlines during the seventies should have been more effective (and has now become more effective), this would not have altered and still does not alter the strategic case."
Nor does it accept the MMC's claim that LT's cautious approach to extending o-m-o was an unnecessary constraint. Fares and ticketing systems then were unsuitable, it says, and the Titan and Metrobus were too new for it to know whether they would be a success. Now, it says the new types have proved their mettle and "radical changes" of Travelcards (an idea proved by the PTEs in the early seventies) and zonal fares make LT certain it can go for close to 100 per cent o-m-o by the early nineties.
For the future, the MMC welcomes LT's decision to use only standard specification buses (three each of Leyland Olympian, MCW Metrobus 2, Volvo Ailsa, and Dennis Dominator) in its trials this year to determine its Routemaster-replacement fleet.
Only half of LT's fleet runs into central London, and the MMC does not believe that the extra cost of developing custom-built buses is justified by the traffic conditions in the central area.
The rest of the report calls for a sustained and, in some areas, accelerated programme of cost reductions in LT's garages and workshops. The cost reduction targets for 1984/85, it says, should be so set as to leave their achievement to management at garages and works; the need for night and running shifts should be reviewed at LT's smaller garages (some of which, it says, should be closed); LT should "pursue vigorously" a policy for increasing labour flexibility, and it should improve the planning and control of vehicle overhauls.
A major area of concern to the MMC was the number of vehicle prohibitions imposed by Depart ment of Transport inspectors, something that led the Metropolitan Traffic Commissioners to restrict LT's first operator's licence to only two years and nine months, which expires in October this year.
While the overall failure rate for buses on annual tests has fallen from 22.9 per cent in early 1982 to 13.6 per cent in the third quarter of 1983, the spot check prohibition record is getting worse. Immediate prohibitions were imposed on 31.2 per cent of vehicles inspected in 1981, matters improved in 1982 to reduce this to 14.8 per cent, but it was up to 16.9 per cent in the first nine months of 1983.
The figures for delayed and immediate prohibitions fell from 45.7 per cent in 1981 to 30.1 per cent in 1982, only to climb back to 38.8 per cent in 1983.
LT accepted this, saying: "The executive fully recognises and accepts the need to improve performance in spot checks, and new targets have been established." It claims a six per cent prohibition rate for last month.
The MMC may have disappointed Conservative zealots by fighting shy of proposing outright privatisation of LT's maintenance, but it has drawn unfavourable cost comparisons between work done at Aldenham bus works (which LT wants to close) and quotations from Ensign, NBC, Leyland and MCW.
While front and rear axles and differentials could be overhauled more cheaply by LT, all other major units could be handled for prices quoted at up to 40 per cent lower outside. And the most expensive of the outside contractors could repaint nearly three buses at the cost quoted by Aldenham for painting one. There is scope for more use of contractors.
For all the criticisms, the MMC believes LT management is on the right course and that it is not acting against the public interest. LT bus chief David Quarmby said last week: "If the report had been published two years ago, we'd all have been sacked. If it had been published in two years time, there would be little to criticise."