The Auditor General has said it was “important” to examine whether the as yet unknown cost of re-opening the Cairngorm funicular could be enough to bring down Highlands and Islands Enterprise (HIE).
Caroline Gardner, the independent spending watchdog, was being questioned by MSPs yesterday about her recent report into the complex finances of the crisis-hit ski-lift.
Tory MSP Bill Bowman highlighted an extract from Ms Gardner’s report which said it was still not yet known how much it would cost to get the railway running again.
Last month’s Auditor General report into HIE’s handling of the funicular’s closure noted that it intended to “repair and reopen” the mountain facility.
But the report added: “It is still not clear how much it will cost to do so, how it will be afforded, or what impact it will have on HIE’s financial sustainability.”
Mr Bowman said the extract was a “clear warning” that reopening the funicular could “threaten” HIE itself.
Ms Gardner said problems with the funicular had meant HIE required extra Scottish Government funding, beyond its normal grant.
She added: “It is that question of how the repairs can be carried out and a sustainable business model for the future reached that leads me to ask that question.
“I’m not prejudging the answer. But I think it is an important question.”
In November, HIE set up a company, Cairngorm Mountain (Scotland), to keep the resort going with the support of the agency’s own staff.
Ms Gardner’s colleague Gordon Smail said there were “challenges and risks” which HIE had to manage.
“HIE is about a £100 million organisation and as we say the accounts this year contain a provision for near on £10 million for repair of the funicular.
“So I think it is right that we identify where there are risks to the financial sustainability,” Mr Smail said.
SNP MSP Colin Beattie pointed out the Auditor General’s report said £244,000 had been spent on legal and accounting advice, describing it as an “awful lot of money”.
Ms Gardner said she expected HIE to take “proper” advice but it was too early to say yet if that was value for money.
A HIE spokesman said: “Risk taking is a key part of our role as an ambitious and effective development agency.
“Learning lessons when things don’t work out as planned is just as important. “
