Bridgewater Canal Breach

[IanD]

Just now, Wafi said:

For anyone who speaks accountancy, the Bridgewater Canal Company's latest accounts are available here.

 

I do not speak accountancy, but to my uneducated eye the company appears to be valued somewhere over £18 million, of which £5.8 million appears to be a loan (or loans) to other parts of the Peel Group. If the company does have a statutory obligation to repair the canal, I'd have thought the only way Peel Group could avoid doing that would be to declare BCC bankrupt, which would appear to be more costly than funding the repair (assuming guesstimates of £10 million are correct).

 

My guess is that they'll use some sort of financial chicanery to offset the cost against profits elsewhere in the group, meaning the actual cost to the group (after tax savings) will be substantially lower than the headline cost.

 

Of course, I could be totally wrong, I'm just a humble engineer. Any accountants care to comment?

They don't... 😞 

[David Mack]

19 minutes ago, Wafi said:

(assuming guesstimates of £10 million are correct)

Somewhere up the thread someone produced the cost of repairing the 1971 breach, and updated that for inflation to around £2m in today's money. The current failure is not that different in nature and extent to 1971, and the method of repair will probably be similar. So allowing a contingency plus all the other procedural things that have to be done now that didn't 50 years ago, an overall cost of £3m might be nearer the mark than your £10m. That sum could easily be covered by BCC assets, but I imagine many of those are income-generating, so selling them (or taking out loans against them) to pay for the repairs now would reduce future company income, which could have adverse impacts for the canal in years to come.

Edited April 17, 2025 by David Mack

[dogless]

Being a simple soul I'll look forward to the navigation being open, and will make plans to cruise into Manchester in 2027 (my Mum had ugly kids not stupid ones 😊)

 

I accept the intention to re open the canal and look forward to that happy day.

 

Rog

[MtB]

Anyone else here deafened by the silence about how it will be funded in that statement? 

 

Thanks to Wafi for the link to the filed company accounts though, which paint an encouraging picture. I see the BCC is making about £1m a year in profit which is very good news. One wonders where the £1m a year all went though, given the company bank balance of only £20k. 

 

So to fund this repair they appear to be going to have to call in the £5m loan to "group undertakings" but that will prove difficult as it is is under Fixed Assets, so quite likely to be an interest-only loan repayable in 100 years, or something along those lines. 

 

I also note they have £1,677,912 of current liabilities due within one year, but only £20,158 in the bank with which to pay it (plus £0.5m of current debts receivable that may or may not get received). This would be viewed as Very Bad Indeed by someone smarter than me (say, a potential investor) assessing the financial state of the company. It could even be argued the company is trading whilst insolvent. And that's without even considering the £4m the breach is likely to cost to repair. 

 

The solution would be to sell a fat chunk of that £17m of "Investment Property" on the balance sheet. Selling say £7m of property should be easy enough but won't happen overnight. Also provided that valuation isn't pure fiction, which it might be. But selling it won't happen overnight. I'd suggest it will take a year or two unless sold at 'fire sale' prices, and Peel, might have something to say about that....

[IanD]

2 hours ago, David Mack said:

Somewhere up the thread someone produced the cost of repairing the 1971 breach, and updated that for inflation to around £2m in today's money. The current failure is not that different in nature and extent to 1971, and the method of repair will probably be similar. So allowing a contingency plus all the other procedural things that have to be done now that didn't 50 years ago, an overall cost of £3m might be nearer the mark than your £10m. That sum could easily be covered by BCC assets, but I imagine many of those are income-generating, so selling them (or taking out loans against them) to pay for the repairs now would reduce future company income, which could have adverse impacts for the canal in years to come.

The *much* smaller recent breach on the Lancaster cost £1.6M, so I'd have thought the much bigger Bridgewater one will cost at least double this (£3M), more likely treble (£5M) -- £10M does seem excessive but is not completely out of bounds.

 

Either way, the BCC will have a problem affording it, and Peel -- who could *easily* afford it -- will have a problem justifying spending that much money for a very small return, since most of their income from the canal comes from moored boats that don't move much, or other sources of income unaffected by the breach.

 

In the end, it'll all come down to the money, since the canal is privately owned and the BCC has no legal obligation to keep it open for navigation.

[David Mack]

22 minutes ago, IanD said:

and the BCC has no legal obligation to keep it open for navigation.

Has it been established that the public right of navigation on the Bridgewater has been removed? For BW waterways that happened under the 1968 Transport Act, but I don't think that applied to the Bridgewater Canal (then under the control of, but not owned by, Manchester City Council).

Edited April 17, 2025 by David Mack

[magpie patrick]

31 minutes ago, IanD said:

the BCC has no legal obligation to keep it open for navigation.

 

Why do you keep making this claim? The Bridgewater enabling legislation gave a right of navigation on payment of the appropriate toll (and certain other limited circumstances) - there is no evidence that this has been rescinded, that was normally done with an act of parliament before the days of Transport& Works Act Orders.  The 1968 Act does not apply to the Bridgewater. The legal obligation may be difficult to enforce but it exists (except through Runcorn locks which were formally abandoned). 

 

You often know more than I do on a subject, on other occasions you have upbriaded others who know less but still argue. On this occasion I doubt you've done your own research and I've actually worked for Peel on the subject of navigation on the Bridgewater Canal. 

 

So why do you persist - as I say, if they dragged their heels it would be a battle, but the right of navigation (and thus the obligation keep the canal open) exists.

[David Mack]

Thank you Patrick. So there is still a PRN on the Bridgewater, albeit that the process of enforcing it could be drawn out, expensive, and with uncertain outcome.

[TheBiscuits]

And as I've mentioned previously, the Bridgewater Canal Company has the sole rights to navigation in the Irwell Valley.  Which happens to include the Manchester Ship Canal geographically, and is why it's been kept as a wholly owned subsidiary of Peel Ports and hasn't previously been folded into another part of the corporate structure.

 

 

[IanD]

1 hour ago, magpie patrick said:

 

Why do you keep making this claim? The Bridgewater enabling legislation gave a right of navigation on payment of the appropriate toll (and certain other limited circumstances) - there is no evidence that this has been rescinded, that was normally done with an act of parliament before the days of Transport& Works Act Orders.  The 1968 Act does not apply to the Bridgewater. The legal obligation may be difficult to enforce but it exists (except through Runcorn locks which were formally abandoned). 

 

You often know more than I do on a subject, on other occasions you have upbriaded others who know less but still argue. On this occasion I doubt you've done your own research and I've actually worked for Peel on the subject of navigation on the Bridgewater Canal. 

 

So why do you persist - as I say, if they dragged their heels it would be a battle, but the right of navigation (and thus the obligation keep the canal open) exists.

I was going by what other people had said (or didn't) -- I asked that exact question several times and nobody came up with any evidence that the BCC had a legal requirement to keep the canal open for navigation, so I assumed they didn't. 

 

If they do and I'm wrong then that's good news, but it raises the question about what happens if they say "we haven't got the money" -- you can't get blood out of a stone so do they go bankrupt, and does any liability then transfer to Peel who own them?

 

I'm genuinely curious about exactly what a public right of navigation means -- the obvious answer is that if the canal is open the company has to allow boats to travel along it, and that they can't deliberately close it -- but is this the same as saying that if the canal breaches or is destroyed the company has to restore it regardless of cost? 

Edited April 17, 2025 by IanD

[b00ke23]

5 hours ago, David Mack said:

Somewhere up the thread someone produced the cost of repairing the 1971 breach, and updated that for inflation to around £2m in today's money. The current failure is not that different in nature and extent to 1971, and the method of repair will probably be similar. So allowing a contingency plus all the other procedural things that have to be done now that didn't 50 years ago, an overall cost of £3m might be nearer the mark than your £10m. That sum could easily be covered by BCC assets, but I imagine many of those are income-generating, so selling them (or taking out loans against them) to pay for the repairs now would reduce future company income, which could have adverse impacts for the canal in years to come.

 

The relatively recent and less severe Middlewich breach cost £3m so I imagine north of £5m is a reasonable estimate for this. 

[Ianws]

Meanwhile https://www.manchestereveningnews.co.uk/news/greater-manchester-news/can-trafford-city-the-best-31402308

 

Some serious Peel investment planned.

 

Thre are also plans for some major housing developments by Peel near Bolton. Providing the golf course built from scratch as part of the plans is selected for the Ryder Cup in a few years time. 

 

Meanwhile there's criticism of Peel's investment in Scottish ports they operate. 

 

It's a tangled web and money for the breach, although minimal in comparison, is still a tidy sum they would need to want to find. 

 

 

 

Edited April 17, 2025 by Ianws
Ports not one port

[IanD]

10 hours ago, Ianws said:

Meanwhile https://www.manchestereveningnews.co.uk/news/greater-manchester-news/can-trafford-city-the-best-31402308

 

Some serious Peel investment planned.

 

Thre are also plans for some major housing developments by Peel near Bolton. Providing the golf course built from scratch as part of the plans is selected for the Ryder Cup in a few years time. 

 

Meanwhile there's criticism of Peel's investment in Scottish ports they operate. 

 

It's a tangled web and money for the breach, although minimal in comparison, is still a tidy sum they would need to want to find. 

 

The difference being that Peel invest lots of money in property development because the returns are excellent, it's what businesses do to make profits.

 

In contrast, it's difficult to see how they would ever get back an investment of £5M+ in fixing the Bridgewater breach -- and with companies like Peel, it's all about the money (or the law), they're not going to do this just out of the goodness of their heart...

[magnetman]

13 hours ago, IanD said:

The *much* smaller recent breach on the Lancaster cost £1.6M, so I'd have thought the much bigger Bridgewater one will cost at least double this (£3M), more likely treble (£5M) -- £10M does seem excessive but is not completely out of bounds.

 

 

I wonder if they might employ experts to find that it would cost £9 million to repair and follow this up by stating that it is too expensive, or look for financial input from elsewhere. 

 

A bleeding heart campaign might pull in some donations ? 

 

 

[magpie patrick]

11 hours ago, IanD said:

the company has to restore it regardless of cost? 

 

OR They would have to seek to be relieved of the obligation to do this - they can't just close it. 

 

This is where it gets messy for Peel, what conditions would be applied to such a release, even if it were forthcoming? What would the legal costs be, especially if they had a battle on their hands? As a commercial organisation they would also look at the PR implications - would a land deal elsewhere fall through because they were seen to welch on their obligation here? 

 

The PRN is not a cast iron guarantee (see Welches Dam on the Middle Level) but it does hold their feet to the fire. 

[IanD]

16 minutes ago, magnetman said:

I wonder if they might employ experts to find that it would cost £9 million to repair and follow this up by stating that it is too expensive, or look for financial input from elsewhere. 

 

A bleeding heart campaign might pull in some donations ? 

 

 

Who is going to donate to a private company, when the money indirectly goes straight into Peel's pockets? (because every donation is money they don't have to cough up, via the BCC)

Same issue with "financial input from elsewhere" -- so long as the canal remains privately owned by BCC (and therefore Peel), who is going to give millions to a property company for no return?

 

13 minutes ago, magpie patrick said:

 

OR They would have to seek to be relieved of the obligation to do this - they can't just close it. 

 

This is where it gets messy for Peel, what conditions would be applied to such a release, even if it were forthcoming? What would the legal costs be, especially if they had a battle on their hands? As a commercial organisation they would also look at the PR implications - would a land deal elsewhere fall through because they were seen to welch on their obligation here? 

 

The PRN is not a cast iron guarantee (see Welches Dam on the Middle Level) but it does hold their feet to the fire. 

 

Agreed, but it will have to be a very hot fire to make a property company like Peel cough up £5M-£10M when they could do far more lucrative things with the money.

 

Companies like Peel do things that kick off protests and public opprobrium every day, because unless the protests hurt them financially -- and why would they, all their big property deals are with other companies with the same mindset? -- they'll do what makes the most (or loses the least) money.

 

I doubt they'll be worried about an expensive court case because who is going to pay the costs (probably millions...) of the other side? A few aggrieved boaters who hate being asked to pay a similar amount to CART for better canal maintenance? I can't see CART taking up the challenge because they don't own the Bridgewater. The government? Seems unlikely in the extreme, given the huge number of far bigger problems they face this won't get any attention... 😞 

 

I can't see any good way forward here unless Peel are legally forced to reopen (but who will bring the court case to do this?) or they have insurers who will pay out the cost (which seems unlikely, or they'd already have announced this). Anyone who thinks Peel will spend that much to avoid bad PR, I have a bridge you might want to buy... 😉 

 

Or they might just hand the canal over to CART and walk away and let CART pay to fix it -- which *would* open up the possibility of donations and appeals since CART is a charity doing good things (keeping the canals open) not a private company shovelling money to shareholders and executives. That's probably the best thing in the long run, even if it means CART have to find the money in the short term, it would certainly improve things for boaters on the Bridgewater and hopefully Castlefield -- but the question is, are Peel willing to let go of the Bridgewater?

Edited April 18, 2025 by IanD

[magnetman]

44 minutes ago, IanD said:

 

Who is going to donate to a private company, when the money indirectly goes straight into Peel's pockets? (because every donation is money they don't have to cough up, via the BCC)

 

Gofundme has had results with very worthy money claims. Might be worth a try.

 

https://www.gofundme.com/f/m4jyk-i-need-beer-money

 

There are some charitable people about. 

 

 

Or justgiving 

 

https://www.justgiving.com/teams/beer-money

[MtB]

1 hour ago, magnetman said:

I wonder if they might employ experts to find that it would cost £9 million to repair and follow this up by stating that it is too expensive, or look for financial input from elsewhere. 

 

A bleeding heart campaign might pull in some donations ? 

 

 

 

Despite lots of estimates on here in the low numbers of £m, I reckon the final bill will turn to be close to your tongue-in-cheek £9m.

 

If it ever gets done at all, that is. 

 

 

[David Mack]

4 hours ago, IanD said:

but the question is, are Peel willing to let go of the Bridgewater?

That's only half the question. The other half is are CRT willing to accept the Bridgewater?

My guess is they would only take it on if it came with a dowry which would cover the breach repair costs and provide an ongoing income sufficient to meet the excess of operating and maintenance costs over revenue. And a deal of that sort will cost Peel as much as repairing the canal themselves and keeping hold of their assets.

[Pluto]

21 hours ago, MtB said:

 

Despite lots of estimates on here in the low numbers of £m, I reckon the final bill will turn to be close to your tongue-in-cheek £9m.

 

If it ever gets done at all, that is. 

 

 

Peel, as an enterprising private company, could think out of the box:

 

Half-price gym membership — bring your own pick and shovel.

[Cheshire cat]

Nice try but Altrincham is the nearest town and it has at least 15 gyms. I go to the cheapest one

[TunnelTiger]

On 17/04/2025 at 23:20, IanD said:

....I'm genuinely curious about exactly what a public right of navigation means -- the obvious answer is that if the canal is open the company has to allow boats to travel along it, and that they can't deliberately close it -- but is this the same as saying that if the canal breaches or is destroyed the company has to restore it regardless of cost? 

 

A question or two. Does a PRN include leisure use? I can understand a commercial carrier asserting their rights and even going as far as court. It happened many times in the BWB days. I can't see leisure users taking that route. Is there commercial traffic on this section of the Bridgewater?

[magpie patrick]

9 hours ago, TunnelTiger said:

 

A question or two. Does a PRN include leisure use? 

Yes "on payment of the appropriate toll"

 

The problem is enforcing it to get the canal repaired - but because Peel are obliged to maintain the canal I would expect that soft power will come into play from various public bodies. "Well, we can help you with xxxx, but it won't look good unless..." It's happened before 

 

BTW - the Creams Mill breach on the Manchester Bolton & Bury is being repaired for around £3 million (90 years after it happened!) - it must be one of the most technically challenging repairs ever. It is, however, going to be narrow beam, but that's mainly to reduce the height of the retaining wall as the land falls away very quickly so moving the wall into the hillside has big savings 

[Paul C]

20 hours ago, magpie patrick said:

Yes "on payment of the appropriate toll"

 

The problem is enforcing it to get the canal repaired - but because Peel are obliged to maintain the canal I would expect that soft power will come into play from various public bodies. "Well, we can help you with xxxx, but it won't look good unless..." It's happened before 

 

BTW - the Creams Mill breach on the Manchester Bolton & Bury is being repaired for around £3 million (90 years after it happened!) - it must be one of the most technically challenging repairs ever. It is, however, going to be narrow beam, but that's mainly to reduce the height of the retaining wall as the land falls away very quickly so moving the wall into the hillside has big savings 

 

They could just refund (or even part-refund) Bridgewater licence costs. With an agreement that with the refund, there be no further action. And not accept any new or renewal applications. Within a year, "the problem" has gone.

[magpie patrick]

1 hour ago, Paul C said:

 

They could just refund (or even part-refund) Bridgewater licence costs. With an agreement that with the refund, there be no further action. And not accept any new or renewal applications. Within a year, "the problem" has gone.

 

It is unlikely that there is a provision to refuse the toll if it is offered (obviously subject to any conditions that are lawful) - that's the point of a PUBLIC right of  navigation, it can't be arbitrarily obstructed.