No Retreat from Valuations
Page 34
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ALTHOUGH the British Transport Comm ission are concerned at the poor response to List 2 of transport units for disposal and have consulted the Road Haulage Disposal Board on the subject, there is little hope that they will reduce their reserve prices for the assets offered for a second time in List Rl. Their belief in the justice of their valuations is unshaken.
They 'apparently interpret the Transport Act, 1953, as meaning that they must recover almost as much as they paid for the undertakings which they acquired. There are, however, two important differences. When the Commission took over haulage businesses, they paid for goodwill. There is no element of goodwill in the units now being offered. Indeed, the B.T.C. will be fierce competitors of the buyers.
Secondly, when nationalization took place, the prices of used vehicles were far higher than they are today. Any valuation of units must be based on present prices. Nevertheless, to comply with the 1953 Act and to satisfy the national interest, the prices accepted must be the highest possible. The levy, which is to meet any loss on the sales of British Road Services to private enterprise, must be kept to a minimum. The difficulty is to do justice to the Commission on the one hand and to the buyer on the other.
The main problem is to value a special A licence. The B.T.C. are understood to regard it as equal in value to an ordinary A licence in the sale of a business.
In fact, the only sound basis for tender is the expectation of profits, which will vary with the individual. The man whose circumstances will enable him to make the maximum profits from a unit will submit the highest tender, regardless of the Commission's reserve price. If a unit does not possess sufficient profit-earning potentialities to draw adequate bids, it is for the B.T.C. to modify it to meet the needs of prospective buyers.