The recent snowfall should spell great news for shredders up in Scotland, and comes as a much needed boost to the ski & snowboard industry up there. Unfortunately it looks like no amount of snow is going to sort out the financial mess at Cairngorm. Anyone who’s been to Aviemore will know all about the shoebox-style funicular which they built at great expense at the beginning of the decade. Famously, the mid station was built in the wrong place i.e. NOT exactly in the middle, so trains have to stop twice en route!
The idea behind the railway was to improve lift access for skiers as well as opening up the mountain to new business in the summer (such as the busloads of grannies who fancy a cup of tea at the summit restaurant). Problem was, someone didn’t do their sums right. We just came across this eye-opening report on the whole sorry affair in Private Eye.
Building the tourist train spiralled far beyond the budget set by the Highlands and Islands Enterprise (HIE) development agency and has already cost the public £23m in construction and support for the struggling operating company.
The Scottish parliament’s public audit committee heard evidence from Audit Scotland last week that: ‘HIE did not review or adjust the business case before construction started in 1999 to take account of, for example, the declining number of skiers and evidently weak financial position of the operating company.’
The funicular railway was finally taken into public ownership by HIE last year to save it from going bust. ‘Although HIE hopes to find a new operator… that might prove difficult in the current economic climate,’ auditor-general Robert Black told the committee, warning members: ‘If HIE cannot establish a viable business model for the funicular, and it ceases to operate, HIE might have to reinstate the land, repay the EU’s money and meet any other costs.’
Audit Scotland guestimates that it could cost between £30m and £50m to reinstate the mountain, up to £2.7m to return the EU grant, added to which would be redundancies, lawyers’ fees and the like.
This is similar to the estimate made by Alan Blackshaw, the non-executive director of HIE who quit in 2000 while highlighting the wildly optimistic projected visitor numbers and the close ties between HIE and Morrison Group, which won the contract to build the railway.”
In other words, the whole project has been a financial moneypit of Millenium Dome proportions, and (since it costs a crazy amount to maintain) might end with the funicular being shut at even more cost. Our advice is to enjoy the snow – and Cairngorm funicular – while you can!!