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Accountants and canals


Peter Thornton
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I often wonder about the various decisions made when constructing canals. 
There is a hill in the way. We can go round it, go through it by a tunnel or a cutting, or travel over it by putting in some locks. And the choices we make will all affect the cost of both constructing the canal and subsequently running it.

Did the engineers have endless debates with the accountants and the canal companies? Was there any kind of scale of costs for the various options? Somewhere I imagine there are some records of these conversations, does anyone know of any books etc which detail them?

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5 minutes ago, Peter Thornton said:

I often wonder about the various decisions made when constructing canals. 
There is a hill in the way. We can go round it, go through it by a tunnel or a cutting, or travel over it by putting in some locks. And the choices we make will all affect the cost of both constructing the canal and subsequently running it.

Did the engineers have endless debates with the accountants and the canal companies? Was there any kind of scale of costs for the various options? Somewhere I imagine there are some records of these conversations, does anyone know of any books etc which detail them?

Yes, to a point. I think in many ways the world of construction has changed much less than folk imagine in 250 years. Perhaps accountants isn’t the right term. Proposers, financiers and boards of directors (by no means mutually exclusive groups) would probably be closer. What documents exist I’m unsure but I suspect there are one or two highly knowledgeable historians on here who will know.

 

JP

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20 minutes ago, Peter Thornton said:

Did the engineers have endless debates with the accountants and the canal companies? Was there any kind of scale of costs for the various options?

 

Were the routes not surveyed and planned prior to the enabling acts?  "We'll have to go this way because Lord So-and-so shot the previous surveyor!"

 

The act authorising the canal had a route map attached as far as I know, and it was the act that permitted the canal company to chop through somebody's land, subject to appropriate compensation.  I don't know if they used eminent domain for them or not.

 

 

 

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Just about every canal was way over budget, and often subject to huge delays whilst more money was raised, so the accountants did not do a good job. Looking at the canals as we travel about I sometimes think the engineers liked to do a few dramatic things, something to make a name for themselves and have a bit of fun, and this maybe took priority over cost control. I suppose today we would call them vanity projects. 

 

Look at HS2 and other modern projects, things have not changed much, do a low quote to get the project approved and then slowly move the cost up towards reality.

 

...............Dave

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43 minutes ago, dmr said:

Just about every canal was way over budget, and often subject to huge delays whilst more money was raised, so the accountants did not do a good job. Looking at the canals as we travel about I sometimes think the engineers liked to do a few dramatic things, something to make a name for themselves and have a bit of fun, and this maybe took priority over cost control. I suppose today we would call them vanity projects. 

 

Look at HS2 and other modern projects, things have not changed much, do a low quote to get the project approved and then slowly move the cost up towards reality.

 

...............Dave

Nobody asks the accountants at the start of a project - costs are just projected by the blokes who want to get it started. Another word for "projected" is "made it up", although that's three words, as any accountant would have known, if I'd asked one before writing the sentence.

See?

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1 hour ago, Peter Thornton said:

Accountants are unfairly maligned! They keep the show on the road........

This is very true. As an Engineer that clients infrastructure projects I find the Finance Manager is generally my greatest ally. Accountancy may be their generic profession but they are not purely accountants. Accountancy is only one part of the financial department remit and in general not a particularly influential one. Nor do folk understand that finance departments don’t tell you how much things cost. That’s the the domain of the Quantity Surveyor, which is a commercial not a financial role.

 

JP

Edited by Captain Pegg
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My understanding is that a group of industrialists and/or landowners, or other great and "good" would engage a consulting engineer to survey a route and calculate likely construction costs. That route might go round a hill (Brindley), or straight through it (Telford), but that would be the decision of the engineer based on his (and it would have been his in those days) experience and preferences. They would put together an estimate of cost to build the canal. This might be out because they were trying to get the construction work with a low bid, or because difficulties turned up that they weren't aware of.

At some point a company would be formed and shares sold to raise capital to carry it out and a bill would go before parliament. That bill, if it got through, would allow compulsory purchase of land on the route, so by that point, the route would be firmly decided. Contractors would then be engaged to do the digging and building, most likely picked by the engineer, who would probably subcontract day to day engineering oversight to others and head on to the next project.

There would be people looking after the cash and dishing it out, but a modern accountant I don't think would recognise their profession in anyone doing this. When the money ran out, the company would have to try and raise more, or change their plans. 

 

Jen

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2 hours ago, TheBiscuits said:

 

Were the routes not surveyed and planned prior to the enabling acts?  "We'll have to go this way because Lord So-and-so shot the previous surveyor!"

 

Yes, but only in general terms. There was no detailed large scale Ordnance Survey mapping available then. So the promoters, advised by their engineer, would develop a general line of route, which was necessarily a compromise between serving the locations they wished to serve, where possible using land where the landowner was amenable and avoiding land where he wasn't, meeting the engineering design and construction requirements of the day, ensuring an adequate supply of water, and ending up with a canal which would be reasonably efficient.

 

The detailed route would only be determined once construction was under way. For the early canals some form of simple water levels would have been used to determine the precise contour the canal was following, so that soil only had to be moved sideways from the uphill side to a bank on the downhill side (on which the towpath was usually located), with no longitudinal movement of material. And where tunnels were necessary, to avoid large cutting excavations, the canal would enter tunnel when the distance below ground was really quite shallow.

 

Over time the balance between these factors changed. So the early canals followed the contours as this minimised the physical work of consruction, and many ended up somewhat circuitous, and didn't necessarily serve all the key markets. Where hills were unavoidable, tunnels were small in diameter to keep the cost and construction time down and to remain within the experience gained in mine tunnels. Locks were located wherever a change in level was needed, sometimes in flights, and sometimes in odd ones and twos.

 

Later canals were built straighter, with more earthworks, larger bore tunnels to allow boats to pass, locks grouped in flights for more efficient operation etc. And this made them more costly to construct, but the shorter route made for more efficient operation, and presumably a better return on investment overall. And of course some of the original contour canals (particularly the North Oxford and Birmingham) were later shortened to speed through journeys, while retaining bits of the original route to maintain service to key places.

 

2 hours ago, TheBiscuits said:

The act authorising the canal had a route map attached as far as I know, and it was the act that permitted the canal company to chop through somebody's land, subject to appropriate compensation.

 

The Act of Parliament would have a plan showing the general route, and separately there would be a power to deviate from that route by a specified distance either side, allowing the engineer to vary the route, within those limits, in developing the detailed design.

 

That still holds true today. Acts of Parliament, and Transport and Works Order applications (which have replaced Acts of Parliament for many schemes) still show a proposed centreline and Limits of Deviation, although these days the LoD are usually much more precisely drawn so as to give some flexibility in detailed design, without blighting huge swathes of land. In my working life I developed a number of Parliamentary Bill and TWAO submissions for rail and tram schemes where we drew up the proposed centreline and LoD plans.  One I worked on was the Croydon Tramlink Act 1994. The plans for that are not available online, but the Act includes this power:

 

"13 Power to deviate

In the execution of the authorised works the Corporation may, except as may be otherwise provided by this Act, deviate from the lines or situations thereof shown on the deposited plans to the extent of the limits of deviation and deviate vertically from the levels shown on the deposited sections to any extent not exceeding 3 metres upwards and to such extent downwards as may be found necessary or convenient."

 

I didn't work on this scheme - HS2 - but its one where the Deposited Plans are available online. The extract below shows where HS2 crosses the Oxford Canal summit at Wormleighton (North is to the left). The solid line represents the proposed centrelines of HS2 and a couple of road diversions, the dashed line is the Limit of Deviation, and the dot - dashed line is the Limit of Land to be Acquired or Used - typically land required temporarily for construction sites or access, but which cannot be used for the permanent works. The different colour shadings represent different numbered land parcels. As HS2 is a well developed design, the Limits of Deviation are relatively narrow. For 18th century canals, they would have been much wider.

 

Untitled.png.9f81c84c4664ce951fc9a61f1341e7f8.png

 

 

Edited by David Mack
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David Mack,

Well done you and everyone else involved in creating the Croydon Tramlink. it was very popular as soon as it opened as I recall it, and ever since, so Tramlink must have been pleased with their accountants. I lived in Anerley then Beckenham in its early years, then in three different houses  in Croydon, and none of these five houses was far from a stop, so I've been a heavy user of Tramlink over the years, including the last few days. Yesterday I went to Addington Village and back, but fortunately the lessons of the crash at Sandilands a few years ago got learnt, so our driver today took the corner properly.

I love Tramlink, and the proximity of my house to a tram stop was a factor in choosing it when I bought in 2009. One way for Wimbledon and lots of trains and the District Line, the other way into glorious West Croydon and beyond,, what's not to like?

Of course the section I'm on started life as part of the Surrey Iron Railway in 1809, then later became the Wimbledon to West Croydon railway line (I used that once in 1976), so its line already existed when you came on the scene,  but the horse drawn trucks had long gone.

 

Tramlink is an example of X's first law of transport in London, which states that if you build and open any new railway/tube line etc. from anywhere to anywhere in London, it will soon fill with passengers. X's second law is that everyone in London is usually in a hurry to get from A to B, so woe betide anyone trying to obstruct or slow down that process, but we do like people who help it.

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AS far as I'm aware there isn't a book on the subject, but there probably should be - most of the information though would not come from detailed minutes but from what happened on the ground.

 

Only committee meetings tend to be minuted, and these would accept a report on costs but not necessarily on the schemes that didn't find favour. Then, 230 years later or more many of these minutes are missing or known to be destroyed (WW2 did quite a bit of damage to archives). 

 

A very broad brush of how it was done on the Coal Canal

 

1 - authorise a cheap, easy to build scheme that would get through parliament (although it did have a long tunnel)

2 - once the original bill was passed, change the 20 odd locks strung out over the length of the canal to three boat lifts at Combe Hay and shorten the tunnel

3 - start building - most bridges were built as swing bridges to save money

4 - Find the boat lifts don't work - lots of money wasted, build a tramway to connect the two (now complete) levels of canal

5 - raise more money to build  a flight of locks to replace the lifts/tramway - the locks that were going to be strung out over ten miles are now concentrated in one mile

6 - once the locks are this point serious toll revenue started to come in and the cheap swing bridges were replaced with masonry bridges

 

Pragmatism played it's part - the Coal canal was built on a rather rough and ready basis (i.e. cheap), needed constant attention during it's working life but turned a profit for 80 years, it's little brother the Dorset and Somerset was built like a castle (aqueducts still stand, unused, 220 years after the works were abandoned) but ran out of money before it even took a toll - £11,000 was spent on committee expenses alone. 

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13 hours ago, Peter Thornton said:

No, but I rely on them to tell me the cost of projects and them I make my own decisions. I’ve always found them invaluable.

Accountants per se rarely tell you the cost of a project. That is the role of engineers, quantity surveyors, architects and so on who are qualified to estimate costs based on their knowledge of construction techniques. When the canals were first built such specialisation was much less and engineers like Telford, Jessop and others were often self taught, learning by experience, theirs and others. 

 

The commencement of a canal project would generally be the formation of a joint stock company that raised capital through subscription, sometimes from interested parties, sometimes from speculators (aka investment analysts) The role of the Engineer was to create the canal within the budget available. In many, if not all cases, such was the level of innovation that projects overran in both time and cost. Sometimes the Engineer got sacked (sometimes just died) and new capital raised. The canals were often built in stages with the complication that at each stage it had to be able to earn money. There were, I recall, several cases where temporary connections using such as tramways, that improved the revenue and hence prospects of new capital.

 

The role of accountants is to help ensure that the money is in the right place at the right time, subject to direction from the Engineer. It was usually the Engineer that had to face angry or frustrated investors.

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4 hours ago, Peter Thornton said:

Projects I’ve been involved in have around 40% “optimism bias” added to projected costs, for this very reason!

In the distant past when I worked in a GEC company it was generally known (if you know what I mean) that when a project's cost estimates were passed up to the company MD for approval they were doubled. When they went to the Group MD they were doubled again. If it was large enough and had to go to Board level, Weinstock would double it again. guess who was the nearest?

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In my career as a computer analyst/programmer, I hated estimating. Managers always wanted estimates and then complained about whatever estimate I gave them because it wasn't what they wanted to hear, and although I was very competent at what I did,  my estimates could only ever be vague and the outcome was likely to be affected by unforeseen events, usually including the managers changing their minds about what was wanted. Canal building was a FAR earlier technology, but the same probably happened. Most of the time when estimates were being discussed I just sat there thinking "Go away and leave me to get on and do the job!"

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4 hours ago, Peter X said:

In my career as a computer analyst/programmer, I hated estimating. Managers always wanted estimates and then complained about whatever estimate I gave them because it wasn't what they wanted to hear, and although I was very competent at what I did,  my estimates could only ever be vague and the outcome was likely to be affected by unforeseen events, usually including the managers changing their minds about what was wanted. Canal building was a FAR earlier technology, but the same probably happened. Most of the time when estimates were being discussed I just sat there thinking "Go away and leave me to get on and do the job!"

It's a bit like editing. 

"How long will it take to cut this scene?" 

"It depends.  How often will the director/producer/producer's wife/son/nephew change it?"

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