In response to recent written Parliamentary questions, Fergus Ewing (Cabinet Secretary for Rural Economy) has stated that:
– A decision on the repair of the funicular is expected shortly.
– The business case will be published shortly.
This suggests that there will be no period between publication of the business case and a decision by the Scottish Government. The following is adapted from a press release which has been put out by four outdoor organisations (Cairngorms Campaign; North East Mountain Trust; Ramblers Scotland; Scottish Wild Land Group) in response. These bodies published the ‘Vision’ for Cairngorm at the end of 2019 (see here).
The central argument is that MSPs, and the public, must be given the chance to scrutinise the business case for the repair of the funicular and associated expenditure, now submitted by Highlands and Islands Enterprise to the Scottish Government, PRIOR to any decisions being taken. The stakes for the mountain are too high and the sums of money too great for a policy of full openness and transparency not to be adopted.
Readers of Parkswatch who share these concerns are strongly encouraged to write to their MSPs asking them to press the Government to publish the business case now.
Extracts from news release
A coalition of outdoors organisations is calling for plans drawn up by Highlands & Islands Enterprise (HIE) to be made publicly available prior to a decision by the Scottish Government as to whether to fund the proposals. The four organisations are concerned that public money may be wasted on costly and unsustainable proposals for the mountain’s ski area, including the fate of the funicular railway which has been closed since 2018.
The group is very concerned about the lack of transparency and public accountability regarding decisions about the future of Cairngorm Mountain ski centre. They believe it is crucial that any future plans should evaluate two scenarios, one with and one without the funicular railway to ensure full value for public funds which are being invested in the area.
Dave Windle of North East Mountain Trust representing the group said:
“Skiers have been deserting the mountain since well before the closure of the funicular1. It’s now clear that the funicular is not even needed to attract summer visitors given the number of tourists flocking to the area this summer when it wasn’t working. HIE’s plans must get things right this time or more public money will be wasted, and downhill skiers will continue to go elsewhere.”
The group is calling for a sustainable skiing operation to be created along with summer activities which are compatible with an environmentally sensitive high mountain environment.
From the moment the funicular ceased operation, the group believes that HIE decided that the funicular should be repaired and discarded other options. Of equal concern is the likelihood that a decision to repair will be made by the Government without any opportunity for parliamentary or public scrutiny of the financial details.
Dave Windle continued:
“It will be totally unacceptable if the Government takes a decision before allowing MSPs and the public to consider the rational for, and the costs of, the case presented by HIE. Of particular concern is the fact that future costs will not be limited to the £10-£15m estimate for the repair of the funicular but will need to include new ski uplift as well, probably a high speed chair lift, whether or not the funicular is repaired. In addition, there is a large backlog of maintenance of the infrastructure, including the Day Lodge and the Ptarmigan buildings.
“On top of that, all previous operators have lost money. Things need to be different this time, which is why HIE and the Government need to be open and transparent. Local skiing enthusiasts have better ideas on how to get skiers back to Cairngorm.
“The business case for supporting the repair of funicular must be made public now before a decision is taken. Only in this way can people and businesses on Speyside, skiers and those who are concerned about the mountain be assured that repair of the funicular is the best option and that public money wouldn’t be better spent on a different model or on supporting struggling businesses elsewhere on Speyside.”
Note 1: Over the period 2004 – 2013, average annual skier days were 78,000 equating to a 41% share of the total Scottish market. Over the period 2014 -2018, this was down to 60,000 (32% market share), a reduction of 30%.
Who prepared the business case and what evidence was used and who provided it?
Nick has covered this in some detail in some of his other blog entries – try searching “funicular” and you’ll see a raft of informative earlier posts on this topic.
Malcolm,
Highlands and Islands Enterprise has prepared the business case. With regard to ski infrastructure, HIE commissioned a report from SE consultancy in 2018 and an addendum to this in 2019. These reports are available on HIE’s website. They do not go into great detail re the finances although it is clear that repair of the funicular is only the start of the funding needed. Additional ski uplift is essential as are repairs to base station, the Ptarmigan, the car park and the area surrounding it, all of which are not in a good state. In addition, the Ciste car park area needs to be addressed. HIE may have involved other consultants in developing the case. We do not know the full extent of the evidence used.
George
I should have added that it has been argued that the cost of removal would be greater than the cost of repair. Not by that much if the v. broad estimates that have been made public are correct. The key difference from a public funding perspective is that the cost of repair would need to be upfront, removal, and it’s associated costs, could be spread over many years.
George
Remember when the Funicular was built, the estimated cost was £9.6m which escalated on completion to over £26m, almost 3 times the original! Initially HIE said the estimated Funicular repair would be £9m which has now already become c £15m, without any indication of maintenance costs, lifespan or the cost of removal at the end of its working life, which will happen. When HIE first produced figures for repair v removal, the repair was the cheaper option, but they are now saying it will be more expensive! Furthermore, when asked about the demolition HIE admitted that they had not worked on the cost of removal to a satisfactory depth below surface level only for complete removal, and with no estimate of what the funicular would be worth on the open market! Far too many unknowns to build a proper business case. It has never to my knowledge been released by HIE as to who did the estimating for the repairs/ removal. Was it done in house or was yet another consultant engaged? Also in the current health climate how can the S.G. justify such a huge outlay of public money when so many other businesses are struggling and even closing?
In addition viability of options to repair or remove the funicular need to be assessed using whole life costing principles. The funicular has never made money and has been a financial millstone, so spending money to repair it just to have it continuing to operate at a loss is crazy, better to cut the losses and remove it and install fit for purpose uplift.
The analogy is – there comes a time when it is no longer viable to keep repairing your old car. Yes, it might be cheaper to replace the engine and gearbox to extend the old car’s life than buy a new car, but the old car will continue to need expensive repairs and will be inefficient to run. We might not consciously do a whole life costing, but there comes a time when the old car has to be replaced.
The time for replacing the funicular is long overdue. So many people with the knowledge and understanding know this, but HIE still have their heads in the sand!
Let us remember there are local two SNP MSPs who have a key role in making this forthcoming funicular decision. They are Fergus Ewing, Cabinet Secretary responsible for HIE and Kate Forbes, Finance Secretary. In 2000 FE publicly claimed that HIE were going to make such a huge profit from the operation of the funicular that the money coming from HIE was in effect a loan, not a grant, and would all be re-paid to HIE within a very short time. Let us hope this time KF is doing the maths, not Micky Mouse……