"London Fire Engines could have to be sold to pay debt"

[kurnal]

http://www.bbc.co.uk/news/uk-england-london-13573795

[Golden]

I have a vested interest in the story having been part of the team that set up the original contract in 2001. I'm sorry to see the state that assetco have got themselves into as I believe the original decision to privatise the workshops has delivered a better service to the front line with the system for replacements and servicing of vehicles and equipment. I still remember the looks on the crew's faces when a breakdown occurred at a fire in the middle of the night and they were wanting to get back to the station (about 15 miles) and I told them to get in touch with the call centre and get them to call a cab as per the contract!

Before the contract started it took months to get replacement equipment - post contract it was four days for most of the front line kit with four hours specified for critical items. The storing of thousands of pounds worth of largely unserviced and untested kit in station stores was stopped as the system became trusted. The contract provided levels of service that were previously unheard of in the LFB.

One of the main reasons I got involved was that the LFB workshops at the time were not delivering a service and at times it seemed that we were there to serve them - the tail wagging the dog had to stop and this was seen as one of the most effective ways of moving forward.

I also remember that the issue of the company going bust was fully covered in the contract, I can't remember any detail and if I could it would be wrong of me to post it on here but there are contingency plans unless the contract has changed substantially in the past ten years - which I doubt.

[tmprojects]

I heard on the grape vine, and this is pure rumour (But when have we ever let that get in the way of a good story).

And, it seems Golden could quash this one quite quickly.

LFB had put in a clause in the contract to protect them from the contractor failing or being unable to deliver the contract. If the contractor was to go into serious financial trouble then LFB had the right to purchase the fleet form the troubled contractor at a peppercorn fee (i.e £1 per vehicle) before the creditors moved in. I guess this was intended to ensure consistency of delivery by LFB and to promote solvency of the contractor.

Is this genius on behalf of LFB or just a rumour?

Golden?

[Golden]

I really can't remember the detail but there is a clause to protect the service levels however the contract is more than just the vehicles and it will take time to get a  new servicing and repair regime in place. I can't imagine any of assetco's creditors letting them sell vehicles to the LFB for a £1 and would imagine that a fair market price would have to be paid - assetco had to pay a fair market price for the vehicles when they originally brought them in 2001. The contract ran to about 300 pages and didn't make for an exciting read!

I don't know how much trouble the company are really in but going by the share price it doesn't look good, though I'm seriously thinking about taking a punt making an investment decision as if they get back on their feet it will be quadruple at least!