Welcome back to the Public Audit Committee. Item 3 is consideration of our inquiry into the Cairngorm funicular railway. I extend a warm welcome to our three witnesses this morning. Nick Kempe is a campaigner and mountaineer, Gordon Bulloch is a former environmental land remediation and business turnaround manager, and Dave Morris is a Cairn Gorm and international mountain expert. All three gentlemen are members of Parkswatch Scotland. Correct me if I have any of that wrong.
Before we get into questions from committee members, I invite Nick Kempe to make a short opening statement.
Thank you very much. To clarify, Parkswatch Scotland is a blog that I run, and there is a group of people who are associated with it, so it is not an organisation as such. It does not have a membership.
We will refer to it under that umbrella phrase for the purpose of this meeting.
That is fine.
Thank you for asking us to give evidence in your inquiry into the funicular. We have supplemented our original submissions with further evidence, which has been published on the committee’s website, and we might refer to that.
I will start with a confession. I learned to ski at Cairn Gorm 55 years ago and I am the youngest of the team here by a significant way.
You will have to excuse Dave Morris. He has a laryngectomy and he has some problems speaking with his throat. He has been involved in Cairn Gorm since the 1970s. We both objected to the funicular railway when it was first proposed and we have a long history on that. Gordon Bulloch is now part of the Cairngorms campaign, which is also opposed to the funicular.
When the Public Audit Committee’s predecessor, the Public Audit and Post-legislative Scrutiny Committee, considered Audit Scotland’s report on Highlands and Islands Enterprise’s management of Cairn Gorm on 1 October 2020, the focus of the session was on HIE’s management of the outsourcing of Cairn Gorm mountain to Natural Retreats Ltd. Stephen Boyle, the Auditor General—I have just had a word with him—gave evidence at that meeting and explained that the draft business case had been agreed and that it was agreed to repair the funicular at an estimated capital cost of £15 million. It was actually £16.16 million. What Mr Boyle did not know at the time was that the subsidy required for the first five years was £9.76 million and that the business case was based on an on-going subsidy of more than £73 million. Although members of the Scottish Parliament asked some searching questions that day, my understanding is that the business case has never been scrutinised independently.
I should say that the large amount of public subsidy in the business case was justified on the basis of the gross value added to the local economy. Again, the figures for that have never been made public and we do not understand what the benefits are.
We would like to get two key points across about the funicular and the repairs, and so on. First, we believe that the design is fundamentally flawed. As we have explained in our written submission, we do not think that the repairs are likely to last for as long as is anticipated, which will result in further costs and undermine the business case. Secondly, the amount of public subsidy that is involved is huge and is likely to increase, because further maintenance is required. That money could be far better spent.
Thank you for your opening comments. Please do help yourselves to some water, and, if anyone needs anything, get the attention of our clerks. If any of you needs to depart for a short comfort break, feel free to do so. If needs be, I can suspend the meeting so that you do not miss anything. We are very flexible and helpful in this committee.
I will pass the floor now to Graham Simpson, who will have the opening set of questions.
Thank you very much, convener. I thank you all for coming today. You are aware that we visited the funicular, which was a good thing to do. We also met some local business people in Aviemore, so it was a very interesting and useful trip.
You have given us a submission, and we are keen to hear your side of the argument, as it were. Our questions will be separated into different areas. I will ask you about your thoughts on governance, transparency and accountability. You do not all have to answer; only one of you could do so.
You have described what you think is a “cloak of secrecy” around HIE’s governance. Can you say what you mean by that, and can you give us any examples of a lack of transparency?
Yes. We have had difficulty. Most information about Cairn Gorm is not regularly published, so we have had to extract it by means of a series of freedom of information requests. For example, we just got the full business case, which I believe might now be on the website, as a result of a freedom of information request. It is highly redacted.
There are all sorts of arrangements for dealing with the funicular. As I referred to in the report, the minutes of the board meetings are highly redacted. I checked before coming here and saw that the last minutes that dealt with Cairn Gorm were from August. To refer to your inquiry, all the key points of those minutes are redacted, so you cannot really understand what is happening, apart from the fact that Cairngorm Mountain (Scotland) Ltd will now prepare a new business case for the next three years. How that fits with the full business case, which is supposed to last 30 years, is not clear at all from the minutes. We could give further examples, but, basically, there is a lack of transparent financial information.
One of the issues that we would like to highlight in relation to the governance is the structure. Although wholly controlled by HIE, Cairngorm Mountain (Scotland) Ltd is set up as an independent company, but it does not operate like a company at all. It is completely controlled by HIE and, with regard to its finances, HIE has just been paying whatever grant is needed to balance the accounts for the past four years.
You might have seen the spreadsheet at the end of the report. The year-end balance for the past six years has been £54,133, and that is because HIE pays whatever is needed to maintain that balance, which we think is pretty extraordinary. Cairngorm Mountain (Scotland) Ltd is not an independent company in the true sense of the word, so a key issue for the committee to consider is what would be needed to make it an independent company, or whether it should just be brought in under HIE’s core business.
So, what do you think should be an independent company?
Well, it would need to be far more independent than it is at the moment.
Is it the funicular that you think should be independent?
At the moment, we are saying that it is Cairngorm Mountain (Scotland) Ltd that should be independent. Our view on the funicular is that, when HIE outsourced Cairn Gorm to Natural Retreats UK Ltd, it maintained financial responsibility for the funicular. The funicular is such a financial liability that it would be impossible, in our view, to put it into an independent company. As that is just not possible, HIE needs to maintain financial responsibility for it. The fact that it is doing so through a subsidiary helps to explain the way in which it is financing it, which is that it pays whatever is needed each year to keep the funicular going.
Does that not rather knock your argument on the head? You said that Cairngorm Mountain Scotland should be an independent company; then in the next breath, you said that it could not be so because it could not stand on its own two feet.
There is a dilemma in that, but HIE is impacted in terms of not just the funicular but the whole management of the mountain with respect to future plans. One problem over the past 20 years has been that HIE’s focus has been entirely on the funicular when what has been needed is a far broader plan for Cairn Gorm. We may pick that up in answer to other questions.
If anyone else wants to come in, albeit that it is good that Mr Kempe is leading—
Sorry.
No—that is absolutely fine. However, if anyone else has anything to contribute, that will be okay. [Interruption.] Mr Bulloch is taking up my invitation.
You do not need to press your button. Just let the technician do that for you.
As I see it, HIE’s role is to fund enterprises throughout the Highlands and Islands, not to run them. It would say, “That’s why we have CMSL as a separate company.” However, the governance structure means that it has a strong hold on that company, which cannot move unless HIE gives approval. That is the difference. Separation is needed, and we can talk about whether, in the future, CMSL should be under different ownership rather than under HIE.
Somebody else will ask about the future, so I will not trample on their toes. I will stick to governance. You have spoken about your concerns over the layered governance arrangements. There are programme boards, project boards, key performance indicators, assurance reports and improved outcomes. Does that need to be streamlined?
The last time we were here, the convener asked questions about a structure that seemed incredibly complicated and was not understood. Eventually, HIE produced for you a diagram of the governance structure, which illustrated some of the issue. However, no document sets out how the governance works properly—partly, we think, because it is so complicated that nobody takes responsibility for doing that. The governance process is very complicated. Although the public subsidy is very high for such a small operation, it is not that much in the scheme of things, but an incredible amount is being spent each year on governance—several million pounds.
In addition, the cost of that is not clear. There is something in the last billed minute to the effect that the new board members of Cairngorm Mountain (Scotland) Ltd receive the same board fee as the members of HIE’s main board. I do not know what that costs, but a substantial amount of money is being spent. Then they bring in advisers. Everything that they do involves advisers and consultants, which also adds significantly to the governance cost.
Yes, the committee is used to hearing about consultants on big fees.
Have you any thoughts on how governance arrangements could be improved?
I am of the view that HIE should be removed from the mountain as soon as possible. We may come to that later.
When it comes to what is happening on the mountain today—Gordon Bulloch and I met Mike Gifford yesterday, and I also met him on 20 November—I am pretty satisfied with the operational arrangements, although they could be supplemented by a group of experts, if you like, on ski development and associated outdoor recreation. I will take that up with him. My experience with the legislation on land reform and the right to roam was that what was really critical was having about 10 people around the table representing different expertise. That is how we delivered it.
11:15
The problem at the moment—I talked to Mike Gifford about this in November—is that the advisory group is full of stakeholders. These are people who are representing organisations, not expert individuals, and, as you will see from my written evidence, the problem with stakeholders in Badenoch and Strathspey is that they dare not say what needs to be done, because they are also looking over their shoulders at the next grant obligation to HIE. It is an absolutely fundamental problem.
In that case, Mr Morris, how would you, as you say, remove HIE from the mountain? What would replace it?
Forestry and Land Scotland would be the easiest mechanism. When I went to work for the Nature Conservancy Council in Aviemore, in 1973, the Highlands and Islands Development Board, as it was at that stage, owned the upper part of the mountain. Looking back at the files, though, I see that there was obviously a much better situation in the early days of the Cairn Gorm development—that is, from 1961 onwards—when the Forestry Commission owned all of the land from the bottom to the top of the mountain.
In 2006-07, there was an effort to get the upper part of the mountain transferred to what was the Forestry Commission, and the Forestry Commission carried out a very good consultation with the various organisations. I was working for Ramblers Scotland at the time, and we were fully supportive of the proposal, but it literally ran into the buffers when HIE tried to pass financial responsibility for the funicular to the Forestry Commission. It would not have that.
Today, though, the simplest thing would be for the Scottish Government to say, “We’ve had enough of this farce on the mountain. It’s been going on for far too many decades.” Forestry and Land Scotland could take over all of the management of the mountain, from an ownership point of view, but leave any financial responsibility issues with regard to the funicular with HIE. HIE should for evermore keep hold of that financial responsibility, up to the day when the funicular has to be removed.
On top of that, you have to remember that there is a pretty good and effective community group—the Aviemore and Glenmore Community Trust—which has been doing some good work at the bottom of the mountain. There could, in due course, be a partnership between the trust and Forestry and Land Scotland. I think that that would be a way forward.
Okay. Thank you.
My question follows on from Mr Morris’s comments, and it is open to anyone on the panel. Is there any collective agreement or a view on his suggestion, which is, basically, that HIE should be lumped with the big liability of the funicular and its costs, while the rest of it should be left to everyone else to get on with? Is that the general view?
Yes, and that would include the people who contributed to the report but are not here. There is no other solution; the funicular will never be financially viable, and if we tried to give the responsibility to someone else, no one would accept it.
Including financial responsibility, you mean?
No one is going to take this on, if it means taking on financial responsibility for the funicular. Whatever else you can say about it, Natural Retreats, in my view, absolutely knew that, because it excluded the funicular from the agreement on the mountain.
What effect would Forestry and Land Scotland having greater responsibility—or, if you like, ownership of the mountain range in its wider entirety—have on what currently happens up there? Would there need to be any changes? Indeed, would you like to see any changes to what happens there?
A very simple answer to that question is the issue of path networks. We think that there are great opportunities for future path development from bottom to top on Cairn Gorm, particularly for walking, running and mountain biking. However, the situation today is pretty appalling, because although the mountain slope to the top of Cairn Gorm has been in state ownership for more than 100 years, not one footpath takes you from the bottom in Glenmore up to Coire Cas. You can see on the notices that Forestry and Land Scotland put in Glenmore that all the paths go around and around in Glenmore—there is no connection to the top.
We talked to Mike Gifford about that yesterday. Like us, he is in favour of at least restoring the footpath from Glenmore up to Coire Cas, which would clearly be much easier to do if the forestry people owned the whole land. Mike said that the problem was that Forestry and Land Scotland does not have the money to do that, to which I responded that we hope that the next Parliament will strip away from Scottish forestry a lot of the money that it wastes on planting schemes to give it to Forestry and Land Scotland, which could then spend it on Cairn Gorm and other places where there is a need for much better management of the state forests.
I will add that broader issues exist here. First, Forestry and Land Scotland has expertise in managing land. The soils and so forth on Cairn Gorm mountain are extremely sensitive, and the land is not being well managed at the moment. Although that is not really a matter for the committee, there are a lot of issues about what is happening with the soils and everything else, and Forestry and Land Scotland has far more expertise in land.
Secondly, the Cairngorms National Park Authority tried to create an integrated plan for Glenmore, linking the areas from the top of the mountain to Aviemore. The plan was to deal with things such as traffic problems. There was a lot of snow last Saturday at Cairn Gorm and the traffic situation was complete chaos—people could not get up the road, there was not enough parking and so on. There needs to be a transport solution, but it will simply not happen with two landowners. An integrated plan is needed to consider what is happening on the bottom and at the top. Unfortunately, the Cairngorms national park plan was not really complete and it has disappeared into the ether—nothing has happened about it.
The fundamental problem concerns those different landowners. The national park authority should be the body in charge. It helps to sort out a lot of those issues; however, in our view, it is not powerful enough to take on HIE.
With respect, we had an extraordinary amount of weather in the past couple of weeks. The benefit is that it brings great conditions for the mountain ranges; however, it presents issues around access across all the skiing areas. To play devil’s advocate, is that not simply par for the course for a mountain ski resort?
Two specific issues at Cairn Gorm are worth highlighting. First, the access road gets regularly blocked—as does the Glenshee road, occasionally—because of the way in which it is designed. Quite often, the annual accounts refer to the numbers of skier days lost because people cannot access the resort.
Then, there is a specific issue with the funicular design, which has a tunnel at the top. Everyone will know that on Cairn Gorm, the wind blows, and snow blows into the top of that tunnel and blocks it, so the funicular cannot operate and staff spend hours in the morning trying to dig out the tunnel to get it to work. Although Scotland is getting less snow, Cairn Gorm is the place that has more snow than anywhere else, because of its altitude. However, design issues mean that we cannot make best use of the funicular, which restricts the income that is generated.
My esteemed colleague, Mr Beattie, will talk to you about technical issues in a moment. I will focus on the money aspects, which, since we are the Public Audit Committee, we have a responsibility to look at.
In your representations, you have made some specific comments and expressed some views about the repair costs of the funicular. We do not really have the time to revisit the history of that, nor do I wish to do so. However, it is significant to us, as the Public Audit Committee, that the repair costs rose substantially from around £5 million or £6 million to £25 million and, perhaps, rising. I appreciate that there are some live matters that we might not wish to go into around who is paying for what, so we will try to avoid that.
In your view, what was the underlying reason for such a substantial rise in costs of repairs to the funicular?
First, I am inclined to say that it was the choice that was made in the full business plan to repair the funicular. There were other choices that should have been given better consideration. There is a raft of things about the full business case that we could talk about. It was highly flawed and it lacks huge amounts of backup information.
My background is that I used to work with a FTSE 100 company and, at that time, if I had been presented with that business plan, it would have been thrown out on day 1 because it did not have enough information. However, let us park that to the side.
Then there is the design and build of the repairs themselves. I am a trained scientist and, if there is a problem or an issue, I always want to understand what has actually happened so that I can predict the future. If we just look at symptoms as we see them, we will not necessarily know what the cure is. COWI, which did the design work, might well have its own theories, but HIE has published no theories on why the structure failed so dramatically.
In our submissions, we have some good theories about why that has happened and, frankly, the facts fit those theories. From a scientific point of view, unless somebody can point out some of our information that is wrong, those theories fit. Because of that, and from our understanding of the issues, we are concerned that the repairs will not last and they will require significant extra maintenance. That has already been evidenced, because the funicular has been shut four times since it reopened in February last year for what was said to be routine maintenance. However, through freedom of information requests, we know that that was done so that there could continue to be an interim certificate of construction compliance. The designer and the builder are concerned that the structure will not last, which is why it does not have a long-term certificate of compliance. It has an interim one, and the latest one, which is the fourth, takes it through to May of next year, which is the longest certificate that it has had since it started.
Let me just summarise that, so that we can be clear about what you are saying to us. It is not just the initial design of the structure that is at fault; in addition, the design of the repairs is partially at fault.
We believe that the repairs will reduce the structural failure and hold it back a little bit, but it is still there. All the strappings that are being put on are there to try to contain it, but the concrete beams are already damaged. Within the structure there is damaged concrete and cracking can be seen on the underside, and so on. There are big problems there. The strappings will slow that damage down but it will not eliminate it.
Again, Mr Beattie will cover some of the technical aspects, so we will park that for a second while I finish asking about the financials.
As you know, we have spoken to HIE and visited the site. I have two further questions, one of which is about your more recent engagement with the new management team at the resort. We had the benefit of meeting and chatting to them, and we also met some of the staff, and what was clear to us was the passion exhibited by those who choose to work on the mountain. They love the environment that they work in and they are very passionate about delivering for their local communities.
Do you feel that, despite your reservations about HIE's involvement, the resort is now in a better place or that it might have a better future as a result of the change of personnel?
11:30
I will respond to that. In giving my evidence here, I am highly critical of HIE, but I would say that it has taken some good decisions in relation to the senior management on the mountain and in relation to the board. Between us, Gordon Bulloch and I know most of the board members, and we think that the combination on the hill is very good. In fact, Mike Gifford is a pretty inspiring leader—probably one of the best that I have seen since the 1970s. I think that we could work very well with the new management of the company, but I am still absolutely against HIE being the overlord there. I want to see HIE’s role reduced to what it should be, which is simply giving grant aid. I have encouraged Mike Gifford to take a stronger leadership role, both in what he is doing on the mountain and in his dialogue with other interests.
I fully empathise with the problems that Mike Gifford has. I have been in that type of situation, trying to turn around a much bigger business than that one, and it is a very difficult task. I said to him yesterday that the problem is that we can add things around the mountain and try to get more people in there and so on, but unless the core fixed costs of that operation are tackled, then—excuse the language—you are almost pissing in the wind. That issue must be tackled. The core fixed costs are the costs of operating, running and maintaining that funicular, because it does not provide the uplift—which is what it is there to do—and that is causing its own problems.
Because of that, it does not generate sufficient income for capital investment. We have looked at some things. First, for example, HIE will talk about having 3,000 visitors on the mountain bike trail. Compared to Glentress and Forestry and Land Scotland, that represents tiny amounts of money. HIE talks a lot about diversification—it has been doing that since the funicular first opened, for 20-plus years—but all those bits of diversification will not generate the income that it needs.
Secondly, if Cairngorm ski centre is going to work as a business, it needs significant new financial capital investment in lift infrastructure that is appropriate for carrying lots of skiers up the mountain—the lower sections of the mountain could be used for mountain biking. We might come across those ideas in future plans but the key point is that the current model does not work. However hard those staff try, they will never be able to deal with the need for subsidy, because the organisation is not set up right.
Cairngorm is a really unusual ski resort, because the top half is owned by one body and the bottom half by another. As a general principle in ski resorts worldwide, you must subsidise what is high on the mountain. I was in Colorado some years ago and talked to the Vail ski resort, which is one of the big North American resorts. I was there in September, and I was a bit surprised that there were not many people on the uplift system. I asked the management where all their summer operation was; they said, “It’s not here, it’s down in the next valley around the lake. We make profit there with all that lowland stuff, and we then spend that money on the mountain.”
My experience of that is exactly the same as that of David Hayes of the Landmark development, who is, I think, one of the best tourism operators in Scotland. He wrote extensively about this issue when the funicular was proposed, and he also lobbied MSPs about it. In fact, he commissioned a report on the matter from David Pattison, the ex-chief executive of what was the Scottish Tourist Board, and the basic conclusion was that the Cairngorm ski resort will never be viable financially, unless money is generated in the forest zone and then sent up the mountain.
When I talked to David Hayes about this a year ago, he said that what is needed now is a number plate recognition system in the hayfield at the bottom of the hill, so that everybody who goes through that gateway, if you like, has to pay a fee to be able to drive up to wherever on the mountain they want to go. That would generate a lot of money, which could then be spent on the mountain.
However, we have been arguing this for 30 years now, and we have got nowhere with HIE, because it is just concerned with the little bit at the top of the mountain that it owns. Therefore, you just get one diversification plan after another. That does not work—you have to get back to the fundamentals and learn what happens in other countries.
Thank you very much. That was all really interesting stuff, and we might come back to some of it before the end of the session. For now, however, I will ask Mr Beattie to put some questions to you.
I want to touch on engineering sustainability and future risk. You have described the current engineering solution as
“unsustainable, both physically and financially”.
What are the key technical risks that make further failures likely?
I can give you some answers to that. There is a failure of the pillars themselves, and I have written a little illustrative paper about how they have tilted. There has been work to try to constrain that, but it will not stop further tilting happening; it will only slow it down. That view is based on a lot of geomorphological evidence et cetera.
The other problem is the concrete structure itself. The railway sits on top of beams, a number of which have started to fail. The concrete in them has crumbled, and you can see the stress marks that have occurred over the years; the beam flexes as the train goes over it, and that flexing is beyond what was designed. That is what the evidence shows. Strappings have been used to clamp and, hopefully, hold the beams, but the damage within them is still there. It is very difficult to bring a beam back to its original strength just by clamping.
The same goes for the joint, which is called the scarf joint. It is a triangular joint where the two beams meet at the pillar, and there is a huge amount of stress on it. Again, you can see that, where the joint has gone or has cracked, it has been strapped. That will hold it to some extent, but not indefinitely.
The other problem, which they have been doing something about in the past year—as I understand it; they might say differently—is the clamps. The nuts on them are tensioned, using quite a complicated machine, but some of those nuts have slackened off. Why? Because of the stresses, the variations in temperature and so on. It is one of the things that are going to lead to extra maintenance costs, because they are going to have to check all of the struts, and there are 92 pillars with 92 scarf joints that have all these strappings on them as well as a lot of beams that are strapped, too. They will have to check them to find out whether or not the nuts are slackening off.
Is the material itself inappropriate, or is it a problem with the construction?
If you look back to the beginnings of the funicular, you see that the original design, which also went to planning permission, was for a steel structure, not concrete. Of course, steel is a lot more flexible to variations and tensions and so on. For all the worst reasons, it was decided to go with concrete because it was supposed to be cheaper and, of course, the cost ended up being almost double what it cost when it was built originally.
It would be interesting to see whether HIE deny this, but when COWI, the designer that was asked to look at the problems with the structure, started to look at it, it suggested that they should keep the concrete pillars, take off all the beams and put in steel. HIE deemed that to be unacceptable or too costly, or whatever. Our understanding, from the information that we have, is that this design for the repairs came out of that. If the funicular had been made of steel, we would now have a structure that would be working well into the future.
We have heard a previous discussion about the merits of steel versus concrete. We have also been advised that sites across Europe use concrete quite successfully and without problems, but it is beyond our technical expertise to decide on that argument. I do not, however, see why there should be a problem with using concrete here when it is used successfully elsewhere.
I will let Nick Kempe take over on that one, but we must remember that there is a structural failure in the concrete beams. It is there and it is undeniable. Either the original design or something else has gone wrong. I will let Nick Kempe answer the question about what happens elsewhere.
You have a supplementary submission from Graham Nugent, who is one of our co-authors. He lives in Italy and he has a funicular railway in his village, and he knows quite a lot about them. I am not sure where your information is from, Mr Beattie. We do not have total data on the number of steel versus concrete funiculars. We have had a look, but that information does not seem to be available. Anecdotally, most funiculars appear to be steel, not concrete.
There are other differences in designs of funiculars in Europe. I ski Val d’Isère and Tignes and so on, and funiculars tend to be totally underground, where they are not subject to the weather of Cairn Gorm. They go through channels. They are not subject to such extreme temperature variations because they are underground. They tend to be straight rather than curved.
In Graham Nugent’s written submission, there is a very good picture of one funicular that is lower down, because it is used as a form of transport between villages rather than for ski uplift. It is made of concrete but, interestingly, as he commented, the concrete beams in that case are twice the size of those that were used at Cairn Gorm. As Gordon Bulloch said, there is an issue with the size of the beams.
I was in Bergen in Norway last week, and there is a funicular there that, as I understand it, is the model that encouraged HIE to build the Cairngorm funicular. The Bergen funicular is straight. There are no curves in it, which is a big issue on the Cairngorm one. It also starts at sea level.
There are major differences between what is happening on the Cairngorm funicular and other funiculars, particularly European ones. Most of those are at a lower level and very few of them go up to the extreme arctic alpine environment that there is on Cairn Gorm. You have to remember that we are in an oceanic climate and we have very cold and hostile weather at quite a low altitude of just above 2,500 feet. The Cairngorm funicular therefore has to deal with big extremes.
As a logical extension to what we have been talking about, HIE has suggested that the repairs could extend the funicular’s life by up to 30 years. What would the technical grounds be for saying that that claim is unrealistic?
11:45
First, they have not had any clean bill of health for that structure. They have had four interim certificates of construction compliance since February 2025. The funicular first went back into service in 2023 after the repairs, and it has had on-going problems since 2025. The engineers say, “We cannot sign this off as a long-term structure until certain works and checks are completed.” However, we do not know what those are, because HIE will not reveal through FOI what actual work Balfour Beatty and Pick Everard want to see completed. It would be interesting to see whether they are willing to give it a longer bill of health after all that work is completed.
Having seen all the work that has had to be done to keep the tension on all the struts and supports, I am clear that the funicular must require significant maintenance. I am sure that some of the beams will need further support, because further cracks will begin to appear. The issues have not gone away.
None of us is an engineer, which we are quite open about, although Gordon Bulloch has more expertise. We started to look at the funicular, and the groups that are associated with it, because of the problems that were happening. There are people involved who have various aspects of expertise, which has been subsequently backed up. John Carson is one of Scotland’s most eminent civil engineers. His company did the Skye bridge and so on, and he is quoted in The Press and Journal as saying that the repairs will not work. Just because one eminent civil engineer says that, that does not mean that it is right, but there are some serious engineering questions to consider.
What has been done has been done, but when it comes to the implications, we hope that the committee might look at making some recommendations. If the on-going repairs continue, what happens next time? What is expected of HIE? What should it do in the meantime if the eventuality is that the repairs will fail? As Gordon Bulloch said, the evidence so far is that the repairs are not working.
On the same line of questioning, if the funicular were to fail, what would be the outcome with the least cost and least risk for the public sector at that point?
If another significant failure happens, HIE has to seriously think about closing the funicular altogether, which we alluded to earlier. Even in our discussions with Mike Gifford yesterday, he said that he was quite keen to see extra uplift—a chairlift or something like that—put in. He would need extra funding for that. It is important to look to the public purse for extra uplift, so that if the funicular fails and has to be taken down, something else will keep going. You need something in parallel.
That is what should have happened back in 2020. If HIE had put in even a partial chairlift to give some extra uplift, people could have been going up that and the funicular, even on days such as last Saturday, when there were queues and queues. It needs to take a belt-and-braces approach. Unfortunately, the project will need more public money because of the state that it is now in.
I do not think that people appreciate the size of the public funding commitment that is coming down the road. As far as annual revenue funding is concerned, Mike Gifford and his colleagues will probably do fairly well to bring it down annually. You have to understand that the funicular, as it works today, is not fit for purpose.
That is evident from what the SE Group recommended. The SE Group was the north American consultant employed by HIE in 2016-2017 to look into future options on the mountain. I will read what it said:
“The funicular is a major asset for the resort”.
Those words are quoted by Highlands and Islands Enterprise in its forward business plan, but it did not complete the sentence. The actual report from SE Group says that it is a major asset,
“but the over-reliance on it is problematic given its limited capacity and non-skier use. Its susceptibility to closure also hampers the experience for both skiing and non-skiing visitors, and solutions are needed. With improved uplift in place, Cairngorm should explore restricting the funicular to a few types of visitors (i.e., ski schools, non-skiers).”
That is a damning conclusion. HIE were being told in 2017 and 2018 that it had to put in new chairlifts. From my discussions with Mike Gifford, my conclusion is that two chairlifts from the bottom station are needed right now—although they should have been built during the past 10 years. That capital expenditure will be well over £10 million, I would think—that is what is coming down the road.
Ideally, to get the resort back on its feet, it needs four new chairlifts to cover the mountain in the right way. We need to discuss with Mike Gifford and his colleagues where those might go and what the priority is. However, the committee must realise that there are some big new capital expenditures coming down the road.
We touched on the economic effects. I have a couple of quick questions on that—I am conscious of the time. Your submission says that doorstep research suggests that the funicular has a limited impact on local businesses. How robust is that evidence and how should it be compared to HIE’s modelling?
It would be interesting to understand what is in HIE’s modelling. If you look at the full business plan, you will see a big turnaround from HIE having been totally negative about the funicular for 30 years into seeing it as something positive, because of the economic benefit. However, nowhere is there a paper that shows that massive input of money coming from the funicular to the local community. I would love to see that and to be able to analyse it properly.
The person who carried out that survey was Alan Brattey. He was involved with the community trust at the time. As rigorously as he could, he went around a lot of people asking questions and got rigorous answers. In a statistical sense, he did very well.
I can give an anecdote. As well as all the other things that I have done, my wife and I ran a bed and breakfast in Grantown-on-Spey for 15 years. Thousands of people went through our B and B; almost nobody went up the funicular. There were so many other things to do in the area; everyone said that their biggest problem was that they should stay longer next time because there were so many things to do. When you are operating a bed and breakfast, you speak closely with guests.
For those who did go up the funicular, I asked them straight, “Did you enjoy it? Was it good?” They said, “Yes, it wasn’t bad.” I asked, “Would you go up again?” and they said, “No, I won’t go up again.” Those were the answers that we got from the very small handful of people who ever went up the funicular. There is so much else to do in Cairngorms national park—that must be remembered. I would love to see how HIE has justified what is in the full business plan, because I do not see any justification for it at all.
I apologise, but the clock is racing beyond us. We are keen to ensure that all members have an opportunity to chat with you and that we get as much out of you as we can across a wide area of subjects, so I will require a little bit more brevity in responses. Not everyone needs to respond to every question, if that is okay.
Joe FitzPatrick will put some questions to you.
Thanks, convener. Unlike the other members of the committee, I did not manage to join the visit, as I had another committee to attend. However, I know the hill. I am not a skier, so it is the other activities in the area that I have done; as Gordon Bulloch said, there are lots of other things to do, which do not require you to go to the very top.
My question is about the alternatives and what future planning there has been. You argue in your report that the 2021 master plan is not a master plan in the planning sense. It would be good for the committee to hear what you think is missing from it. What should be there, and what could make it a useful long-term planning document?
The future depends on improving the attractiveness of the mountain for skiing and mountain biking—mountain biking is very important, because it can be done in winter when there is no snow—and also for the general visitor. I have been in discussions with Mike Gifford, arguing the case for extensive footpath networks at a lower level, combining the forest and hill zones. That network would get repeated use. I live in Newtonmore, and, if the uplift was put in the right places and the trails were developed in the right places, I would go up with my mountain bike or for a walk or a climb over and over again.
There is potentially a good future for Cairn Gorm, but all those things—toboggan runs and things such as that—are like an arctic Disneyland and will never make enough money. They are a distraction.
I am very keen that the committee focuses on the key things that need to be done on Cairn Gorm to solve all these problems. I want to make it quite clear: the hill should not be distracting itself and taking up lots of time pushing forward crazy projects that are not needed.
On the example of the coaster, I note that it would be too high on the mountain. Two or three years ago, I was skiing in Sochi in Russia. There is a coaster there, but it starts at the bottom of the lifts and goes down into the local community. Such facilities have to be built in the forest zone and not the mountain zone, but with the profit going back into the mountain zone.
You will all know that the weather at Cairn Gorm is not good, which is one of the fundamental problems with the funicular as a tourist attraction. It is not worth going up for most of the year because of the cloud. It is exactly the same with all the diversification that they are trying to do now. I remember that, when I started to learn to ski on Cairn Gorm, I had never been so cold in my life—it is a tough place. When it comes to lift infrastructure, they are focusing on beginner biking activities, and it is the wrong place for that.
To make money, Cairngorm Mountain (Scotland) needs to be lifts that are useful for skiers on the snow days, but, because that will not pay for itself, it also needs lifts that can be used for mountain biking, which is why we are suggesting lifts in the bottom half of the hill. We are not experts on economics or the business case for that, but we believe that that is the way that it will generate income to keep the business going. It should just focus on new uplift that works. It would be great if the caff was open longer than it is at the moment, but most of the other elements are a distraction.
Just to be clear, would the long-term alternative to a funicular be chairlifts—which you can get skis, bikes and anything else on to—and not a gondola lift?
Due to the sensitive nature of the Cairn Gorm plateau, mountain biking could not happen right up to where the funicular goes. There are two separate aspects. One is about taking mountain bikes to the mid-mountain level, which would be all right. That would enable skiers to connect with the lift infrastructure—the remaining tows. That is what we consider the first phase.
The longer term aspect concerns what would happen if the funicular failed totally. What we would do about the Ptarmigan, for example? That needs more discussion. Considering the money that would be needed to deal with such things, I think that we need to talk about the next five years first.
You suggested that there was not just one mistake at the start, but multiple mistakes and lots of opportunities to take a different path before more money was spent. However, we are where we are and we cannot change the past or unspend the money that has been spent. If there is one recommendation that the committee could make, what would you hope that we would come up with?
Get HIE off the mountain. A lot of the problems would be solved if we managed to achieve that.
Is that what everyone thinks?
Yes, we all think so.
Thank you for your brevity. I hope that I did not cut you short. I am willing to go over time if you have more questions, Joe.
No, I do not.
On that note, I appreciate that time is tight, as there is only so much that we can pack into a one-hour session, but the committee was in agreement, given that your written submissions were so comprehensive, that it would be best to get you in to give some oral evidence.
That evidence will now form part of the Official Report and our evidence gathering, so we are extremely grateful for your time and for the effort that it has taken to come to us. The committee will consider your evidence and the next steps that it will take in due course.
We thank all of the witnesses for their work—and their blog—and for being a meaningful part of our considerations this morning.
12:02
Meeting continued in private until 12:47.