Tank farm valuations

Initial discussions have taken place with the Valuation Office Agency in an attempt to agree 2017 Revaluation base values for tanks.

The VOA are under pressure to produce a draft scheme by March 2015 and finalise discussions by June 2015.

Their starting point at present is the respective index points from 2008 to current day on the BCIS Plant & Machinery Index. This produces an uplift from 82.1 to 100.9, i.e. 23% increase.

We are still hopeful that the Government will cut the decapitalisation rate, currently 5% in England. A reduction to 4% would negate any tank uplift of this sort of quantum.

At MUA, our theory is that reductions in steel prices since 2008 should actually produce reductions in tank values for 2017. Our perception is that project prices are fundamentally distorted, if they relate to additions or replacements at live working terminals as opposed to green field developments.

Clients are urged to contact us to discuss tank pricing on any projects completed or tendered after 2008.