THE “scandal” of the Cairn Gorm mountain railway is bleeding public money from the Highlands, prompting growing demands for the Scottish parliament to launch an investigation.
The funicular railway, which runs a mile and a quarter up Britain’s fifth-highest mountain, near Aviemore, has been mired in controversy since it was first mooted in the early 1990s.
Cost overruns in construction forced Highlands and Islands Enterprise (HIE) to almost double its funding to £16.9 million. Now a confidential HIE report has revealed it is still swallowing taxpayers’ money. “Management of the estate is a considerable drain on HIE’s finances and senior staff resources,” it says.
Because HIE agreed to cut the annual rent for the funicular from £513,500 to £100,000, it has lost £11m of future income over the next 25 years. The railway risked going bust because it hadn’t been attracting as many customers as had been hoped.
The options appraisal report, released under freedom of information legislation, says HIE needs an “exit route” from owning the estate. That is why it has begun negotiations to transfer it to the Forestry Commission.
Compiled by Bidwells Property Consultants in December, the report also discloses that HIE could be left with an additional multi-million-pound bill for dismantling the funicular and reinstating the landscape should the business fail.
Cairn Gorm is costing HIE £15,000 a year because the expense of providing rangers and other services is higher than the reduced rental income. Management of the estate is also governed by strict rules designed to protect its status as a nature conservation area.
“Given the present net expenditure incurred by the landlords from the estate, the poor tenant covenant and the considerable potential reinstatement liabilities, we do not believe the estate would be of significant interest to the private or institutional investment market,” the Bidwells report concludes. It recommends transfer of ownership to the Forestry Commission.
The financial plight of Cairn Gorm has prompted environmental groups and a Highland MSP to call for a public inquiry. “This report confirms the need for a parliamentary inquiry into a public funding scandal,” said Dave Morris, director of Ramblers’ Association Scotland.
According to Eleanor Scott, the Green MSP for the Highlands and Islands, the funicular has always been bad for the public purse and the environment. “The economics of it never added up, and despite the evidence it was driven through regardless,” she said.
HIE, however, described the funicular as “an increasingly successful year-round visitor attraction” that had helped rejuvenate tourism in the Spey valley. Declining snow cover caused by global warming meant it could no longer rely on winter skiers for its income.
“We do not believe there are grounds for a public inquiry. However, we would have no objection in taking part in any such inquiry,” said an HIE spokesman.
Negotiations with the Forestry Commission are expected to last most of this year. The Executive has refused to get involved, saying Cairn Gorm was “an operational matter for HIE”. But this has been dismissed by Drennan Watson, convener of the Cairngorms Campaign.
He estimates more than £30 million will have to be written off to keep the funi cular going. “It is horrendous,” he told the Sunday Herald. “How did this disastrous loss of taxpayers’ money come about? What lessons are to be learned?”
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