Enterprise chiefs ploughed almost £2.5 million into crisis-hit Cairngorm Mountain

Post Thumbnail

Enterprise chiefs have ploughed almost £2.5 million into crisis-hit Cairngorm Mountain since its funicular railway was taken out of service and the ski resort’s former operators went into administration, it has been revealed.

A new company set up to run the centre was given a £1million loan by Highlands and Islands Enterprise (HIE), which also spent nearly £461,000 acquiring assets from administrators appointed after the collapse of CairnGorm Mountain (CML).

At the end of last year the organisation spent £1m on snow-making equipment to boost the resort’s winter fortunes following the discovery last October of structural problems on the funicular, which have kept it out of action since.

The Scottish Government-funded development agency said the money had been spent to protect jobs and enable the resort to keep operating while a “sustainable business model” was developed.

Last night a local business leader and campaigner accused HIE of pumping millions money into Cairngorm “without any results,” while the local economy was losing “millions of pounds” and called for a  parliamentary inquiry into the agency’s handling of the crisis.

>> Keep up to date with the latest news with The P&J newsletter

HIE awarded Natural Retreats UK a 25-year contract to run Cairngorm in 2014, but stepped in to manage the resort when the leisure company placed its subsidiary CML into administration last December, citing “unsustainable cash flow problems.”

Staff and assets of the failed firm were transferred to a new company, Cairngorm Mountain (Scotland) (CMSL) set up by the development agency.  HIE is still awaiting the results of a “peer review” of engineer’s reports on the problems in the funicular railway’s support structures.

The extent of HIE’s spending on keeping the resort running was revealed in figures outlining its expenditure between January and March this year, published by the agency.  They show £1m given to CMSL as a “working capital loan” and £460,852 spent on acquiring assets.  A further £25,000 for “lift passes at Cairngorm” is also listed.

Last night an HIE spokesman said:  “When the previous operator of Cairngorm went into administration, we stepped in to make sure the business kept going and to protect jobs.

“We set up a new operating company and bought essential assets from the administrators, including vehicles, stock, fixtures, plant and equipment, to enable the new company to run the business.

“We also provided £1m working capital for the new company to enable it to keep operations running while developing a sustainable business model.”

Alan Brattey, secretary of the Aviemore Business Association and a founder member of the Save The Ciste campaign, described the situation with the mountain railway as a “sink hole for money” and called for an investigation by a cross-party committee of the Scottish Parliament

He said: “It is obvious this is a very broken down business that is barely surviving. It will remain a broken down business until properly handled. “We are still waiting for the results of the engineers report into the structural problems – eight months on.”

Mr Brattey added:  “This is costing the Badenoch and Strathspey economy millions of pounds, and HIE are pumping money into this without any results.”

Highlands and Islands Green MSP John Finnie said:  “My concerns about all aspects of HIE operations in Cairngorm, including those being raised by the local campaign groups, are well documented.

“I wrote to Audit Scotland about those concerns and received an assurance that they’d consider HIE’s involvement with Cairngorm Mountain Limited as part of the 18/19 audit process.”