After the funicular on Cairn Gorm broke down and subsequent posts on Parkswatch, there were many calling for a judge lead inquiry into the causes of the failure of the business CairnGorm Mountain Ltd and the funicular railway.  HIE have continually resisted this but are currently, and have for some time, themselves been taking legal action in the Court of Sessions against:-

(1) A.F.Crudens, the original designer, now owned by Arch Henderson,

(2) Morrison Construction Ltd, the company who built the railway, now owned by Galliford Try, and,

(3) Natural Retreats/ Natural Assets Investments Ltd (NR/ NAIL), the operator of the ski area when the funicular was taken out of service.

To try and find out what was happening I submitted an FOI request to the Scottish Courts and Tribunals Service and on 10/11/2022 received this response:

This information was confirmed a few days later by HIE to whom I had also submitted an FOI.

There are at least two other major parties involved in the funicular build who are NOT being sued, something I will come back to in the next post.  First let’s look at those who are being sued and the possible reasons why.

(1)  A.F.Crudens

After the decision to build a funicular was taken, this company was awarded the contract to design the buildings and railway and even received a commendation, along with Morrison Construction Ltd and CML, for the design!

Initially the railway was supposed to use steel beams for the rail supports, materials that were subsequently changed at HIE’s request as part of a “cost-cutting” exercise. What an expensive mistake that has proven to be! From the limited Health & Safety File (see here and here) it would appear that the legal regulations governing the design of the funicular, i.e. the standard B.D.(Bridge Design) Regulations, were adhered to which begs the question why is A.F. Crudens being sued?

(2) Morrison Construction Ltd.

The Public Audit Committee Report, 2^nd Report, 2010 (session 3) into the funicular contained this statement under costs and benefits:

All three contractors’ bids for the building contract “exceeded the available budget by a LARGE margin” but only Morrisons agreed to find savings.  This raises questions about the relationship between Morrisons and HIE which could have a bearing on the court case, for example whether the other two contractors were given a chance to revise their quotes and, if so, why they decided not to lower them.

It seems unlikely, given their very close partnership, that HIE could successfully sue Morrisons for any changes to the funicular design that were instigated at HIE’s request to cut costs.   It seems more likely that HIE may be trying to sue Morrisons for the quality of the subsequent construction work.

How HIE think they can prove these cases is unclear, particularly when they have claimed in response to FOI requests that some of the original paperwork is missing.    All the parties involved in the build were approved by the project management team, the then CEO and members of the Board of HIE, most of whom have now left/ retired from HIE (with the Chief Executive Ian Robertson leaving HIE and moving onto Morrisons board after the contract had been awarded).  That raises the question whether those who are still alive will be called as witnesses in the court cases?

At least one of those responsible, however, who worked on the original procurement of the funicular, still works for HIE and would presumably be a key witness if the court cases ever go ahead:  Susan Smith, Chief Executive of HIE’s subsidiary Cairngorm Mountain (Scotland) Ltd, who was also involved in the Natural Retreats debacle.

 

(3). Natural Retreats/ Natural Assets Investment Ltd.

These associated companies were awarded the contract to operate the ski area and sold Cairngorm Mountain Ltd (CML) on the cheap by a team comprising the last CEO of HIE, Mrs C. Wright and the current CEO of CM(S)L, Susan Smith! CML went into liquidation following the removal of the funicular from service due to safety concerns at the end of 2018.

This severely impacted on the economic sustainability of the business as seen in this screenshot from NAIL’s accounts:-

Note the use of the words “historic issues”, i.e not their responsibility.

And then further on in the accounts is this statement which has appeared in the accounts in 2018,2019, 2020 and most recently 2021:-

Presumably this is referring to the action initiated by HIE against NAIL.  After five years HIE has made no tangible progress.

While there was a lot of disagreement and unhappiness with the way the contract to operate CML had been awarded and was being operated, NAIL/NR was a tenant who suddenly lost a major source of income, through little fault of their own, for an unspecified length of time! No business can withstand that kind of loss and one would have thought HIE, if anyone, should know that..

As an aside NAIL’s 2021 accounts also mention two other subsidiaries  with HIE connections, Lews Castle in Stornoway and John O’Groats:-

With NAIL’s accounts showing that they are now selling off many of their  assets, it appears that John O’Groats will be sold in the next year or so when HIE’s grant is no long repayable!

Part two of this post will follow shortly.