Root of All Evil
Page 57
If you've noticed an error in this article please click here to report it so we can fix it.
k_NYBODY who thinks the second report of the Disposal Board, any more than the first, may help him in deciding how much to bid for a transport it, will be disappointed. Just as the maiden in the ctorian melodrama continually speaks of a fate worse tn death but never goes into details, so is the report ll of references to bid, price and tender, without getting wn to cases.
A few weeks ago the Board, fortified by the support the Commission, were brave enough to quote actual ures showing by how much the aggregate of tenders r a number of units had increased when they were 'ered a second time. From these figures I attempted draw one or two conclusions, and expressed the hope it the Board's report would give additional ormation.
kpparently, the Board could not have been aware of at they were doing, for in the report the financial ails are chastely omitted and we are left with the tement that the total of the highest tenders for units hout premises in list R.1 was 42 per cent. more than highest tenders for the same units when first offered. similar comparison with list R.2 shows that the -ease in the highest tenders was only 27 per cent. a result, only a little more than 50 per cent. of the ides without premises have been sold, whereas for R.1 the proportion was 67 per cent.
: may be inferred from this that the players are tg of the game of blind man's buff as played by the rd and the Commission. The importance of having ecial A licence has kept people bidding and rebidding a time, but cannot do so indefinitely.
would be hard to gather from the report that the t frequent criticism of the Board arises from their sal to name a reserve price. One long and confused graph deals with the point. The prospective buyer reads it must feel that his best chance of getting a is to take the tender form to an astrologer.
No Reserve Price
Le paragraph begins with a reference to the provision le Transport Act which says that the price of the .ssful tender must be reasonable, having regard to alue of the property and the rights that a purchaser ires. The Act does not define what is " reasonable." not clear from the report whether the Board think defect in the Act. They go on to say that, in spite 4uests, they have not indicated a reserve price "for imple reason that no reserve price has ever been "There was no established market for the property ights constituting the sales by tender, "since such ; have never been sold before."
s may be true of the rights, but not of the property, ; was, in fact, all sold before, only a few years ago. board do not have to accept the formula laid down impensation in the 1947 Act, but they cannot plead is no precedent. All they have to say on the point even the valuation of vehicles is a matter of at rather than of an accurately calculable assessbased on an established market." The point of bservation is not clear. If the value of a vehicle tatter of opinion, the Board might as well form immediately without waiting for the tenders. There was no "directly relevant existing price" for special A licence, the report goes on correctly enough. "No one price could have been appropriate for all cases," This would have been a reason for caution in naming a reserve price in the early stages. By the time the Board prepared their report, there were four lists and two repeat lists off the stocks and others on the way, and they should have had some idea of what a special A licence was worth.
The points I have mentioned are joined with "the need to take into account the full facts of each case individually," whatever that may mean. The conclusion is that the Board have refused to tie themselves to a rigid set of rules for determining whether a particular tender is reasonable. Nobody has suggested they should do so, but it seems incredible that they should not have, at least, a rough and ready guide.
They envisage their task as that of a jury and the " evidence " provided by the tenders has had their closest attention. Where the tendering has been "genuinely competitive" the highest tender has been accepted in all but a few cases. With this hint of sinister price rings all over the country, the Board drop the subject of a reserve price, presumably for ever.
Think of a Number . . .
No help is here for the would-be haulier, however "genuinely competitive" he would like his tender to be. He has two main methods of arriving at the price he is prepared to pay, and usually his tender is a combination of both. He makes a guess at the market value of the vehicles, and adds what he thinks the special A licence is worth. As the Board point out, there is no precedent for this, and for the most part he follows the method in the 1947 Act for buying part of an undertaking. For each ton of carrying capacity he adds an amount sometimes as low as £50, and at others well over £100.
The other method depends upon his plans for using the vehicles. If he can depend upon securing some lucrative traffic the unit he wants may be worth twice as much to him as to another man who can look forward to no certain revenue. The man with the prospects can afford to offer much more than his rival, but both tenders will be genuine.
The Board cannot know how the tenderers propose to run the units they buy. They can judge each bid only by the extent to which it appears to include a " reasonable " estimate of the value of the property and the special A licence. At some stage or another the estimate has to be made. In spite of the Board's tortuous arguments, there is no reason why it should not be made at the beginning.
Even one or two examples would help. Many of the bids, especially in the early stages, were no doubt speculative. The Board will eliminate most of them by some statistical hint of the lower limit of tolerance. There will be no upper limit set to the bids, and the Board are not bound to accept a tender at the absolute minimum they set. A few figures from the Board would do no harm and would dispel the impression that, in their opinion, money is the root of all evil and is best kept buried out of sight.