Internal documents from the commission reveal that many of the facilities at the ski resort on the Cairngorm estate near Aviemore are badly in need of repair. Buildings are leaking, sewage discharge limits are being breached and the train’s undercarriage has not been properly checked.
Bringing the facilities up to scratch could cost up to £2 million of public money, the documents disclose. If the funicular railway has to shut, £6 million would have to be found to reinstate the land, and a £2.7 million grant from the European Union would have to be repaid.
HIE is alleged to have played down these costs during negotiations to transfer ownership of the estate to the commission in 2006 and 2007 - though this is denied by HIE. The negotiations ended in failure last year, and HIE still owns the estate.
“There is a very real risk that in their haste to tie this up they are trying to sweep some potentially big liabilities under the carpet,” the Forestry Commission’s senior official, Hugh Insley, told colleagues in December 2006.
“I am fairly clear that we should not do this deal without HIE retaining the long term liabilities they have created at Cairngorm,” he continued. “At the end of the day whatever the potential politics if they will not agree proper terms I think we should be prepared to walk away.”
The Forestry Commission has released over a thousand pages of internal emails, memos and reports in response to a request by the Sunday Herald under freedom of information law. The documents lay bare the tortuous and sometimes fractious talks with HIE, which many observers had hoped would result in the commission taking over the Cairngorm estate.
“The difficult issue is how to cover ourselves against future costs and liabilities related to the ski facilities,” wrote Insley, the chief executive of the commission’s agency, Forest Enterprise Scotland, in an email during February 2007.
“Put simply there is a lot of poorly maintained infrastructure on a highly designated area. This must either be brought up to standard or removed.”
The following month, Insley was advised to avoid “any involvement whatsoever with the ski area” by one of his negotiators, Alan Stevenson. “The political fall out is all HIE’s affair as they don’t have anyone else to talk to!” Stevenson wrote.
According to reports prepared for Forestry Commission, the problems included the roof of a building housing an electrical transformer leaking like a “sieve”. There was also a “possible design fault” causing sewage discharges in breach of safety limits which would be “extremely difficult” to fix.
Amongst several “snagging issues” left over from the construction of the funicular railway in 2001 was the lack of lifting gear capable of removing the train from the tracks. According to one report, not being able to do this every five years was “severely impeding maintenance of rolling stock.”
Negotiations between the Forestry Commission and HIE were further complicated by the precarious financial position of CairnGorm Mountain Limited, the company that operated the funicular. It was eventually taken over by HIE in May this year.
These latest revelations have prompted renewed demands for a parliamentary inquiry into the funicular. “The exposure of these massive liabilities confirms our worst fears,” declared Dave Morris, the director of Ramblers’ Association Scotland.
“This represents an incredible loss of public money on an environmentally damaging project. Lessons must be learnt from this scandal,” he said.
“Ownership of the Cairngorm estate must be removed from HIE because they appear to have seriously mislead the public and the parliament on the whole funding basis of the funicular railway.”
Alan Blackshaw, a former senior civil servant who quit as a director of the local enterprise agency over the funicular in 2000, urged Audit Scotland to investigate. He predicted that the railway would end up costing taxpayers more than £60 million.
HIE insisted that it had “rigorously outlined the obligations and liabilities that would be attached to the estate’s responsible stewardship” during negotiations with the Forestry Commission. They had been outlined in a report from the property consultants, Bidwells, in December 2005.
But during the negotiations it had become clear that activities at Cairngorm had to be diversified to cope with the decline in snow cover caused by global warming. “Consequently HIE’s board agreed that these plans would be best developed under HIE’s continuing ownership,” said an HIE spokeswoman.
“HIE is now working on plans to ensure that operations on the mountain continue to be an economic driver for the area while maintaining its sensitive environment. When these plans are in place, it is HIE’s intention to attract a private operator for the funicular railway and to resume negotiations for the estate to move into alternative ownership.”
The Forestry Commission said that during the negotiations it had raised a number of issues it wanted to examine in more detail. “However the HIE board decided to halt negotiations because, as we understand it, they decided that with their experience of the site they were best placed to manage any future potential developments,” a commission spokesman said.