THE Auditor General and the Scottish Parliament have been urged to investigate the finances of the Cairngorm funicular project, after moves to wipe out its debts of more than £6 million.
Highland and Islands Enterprise (HIE) has asked creditors of CairnGorm Mountain Ltd (CML), which runs the mountain railway and ski centre, to write off debts that could have forced the firm into receivership.
HIE aims to take over the company and
put it out to tender with a clean bank balance in the hope of securing the long-term future of the resort.
Yesterday, Highland Council agreed to a request from HIE to sell its £1 million loan to CML for only £1. The £2 million owed to HIE is to be waived, and the agency is in talks with Halifax Bank of Scotland over more than £3 million it is owed.
But the move has angered campaigners, who queried the amount of public money in the original project. HIE invested £16.9 million in the funicular, which opened in 2001, with £2.7 million coming from Europe.
Bill Wright, a long-time critic, said: "This confirms that the black hole we predicted would exist in terms of public money is exactly as we saw. There has to be an inquiry into how the whole funicular catastrophe has come about and what can be done to address it. What HIE is asking for now is for the council tax payers of the Highlands to come to the rescue of this company yet again. We are talking about further money down the black hole."
Dave Morris, director of the Ramblers Association Scotland, said: "We need an inquiry by the Auditor General into how we have finished up this situation, which has gone way beyond what was anticipated in terms of the public money input. The whole thing is a total disaster. HIE's credibility has evaporated."
Sandy Park, the convener of Highland Council, said: "The council fully recognises the importance of the Cairngorm operation and the jobs it creates. We support the action being taken by HIE to ensure the sustainability of the business."
CML, which has 90 staff, has suffered from a series of bad winters, although this year it has enjoyed a record season.
The company has struggled to make the £19.6 million funicular project break even, and since 2002 has not been able to pay even the interest on the council's loan. It's financial position means it cannot obtain more funds to help it diversify further into a year-round attraction.
Campaigners had put forward an alternative project, using a gondola system to take visitors to Cairngorm from Glenmore. They also criticised the funicular's "closed" system, preventing people using the railway from walking on to the mountain.
The full article contains 469 words and appears in The Scotsman newspaper.
