Agency 'withheld' true cost of funicular

A FRESH row broke out last night over the controversial Cairngorm funicular railway after it was revealed that the final cost was 32 per cent higher than previously thought.

Highlands and Islands Enterprise (HIE) disclosed that the cost of building the mountain attraction was 19.6 million, rather than the 14.8 million which has been used until now.

Although HIE has known the final figure for some months, it revealed it only yesterday. The agency blames higher-than-expected engineering costs and other fees for pushing up the total.

Last night, one MSP said he was concerned that HIE appeared to have withheld the true figure and said the public had a right to know how its money was being spent.

An HIE spokesman said: "This increase is attributable to the project’s overall construction cost escalation, which largely arose from higher-than-anticipated engineering costs on the railway-support columns and tunnel, together with the associated professional fees."

He said the final figure also includes 3.5 million for additional buildings after HIE decided to take over the entire complex, rather than just the railway itself.

The final cost of 19.587 million includes a 2.699 million grant from the European Regional Development Fund. The balance of 16.88 million has been met by HIE from its own budget. The spokesman said no other project was denied funds as a result of the rising cost of the funicular.

The delay in announcing the figure was also due to protracted negotiations with main contractors Morrison Construction - formerly owned by Sir Fraser Morrison, a past HIE chairman - over the final bill, which could have been significantly higher.

The spokesman added that the final settlement with contractors was agreed during this financial year and details will be included in its accounts to be published in October. Opened in December 2001, the funicular plan dates from 1994. But after winning backing from the Highland Council, the project was delayed as the environmental group WWF and the Royal Society for the Protection of Birds sought a judicial review on whether visitor-management arrangements were adequate to protect the environment.

However, Dr Jim Hunter, HIE’s chairman, refused to blame conservationists for the rising cost. "The environmental bodies were entitled to adopt the stand they took. It’s a fact that the environmental lobby’s position to contest the project in the courts held up the start date and to that extent made some contribution to the cost escalation," he said.

"However, to say it’s their fault is absurd," Dr Hunter added. "The principal reason for the escalation was the fact that this was a hugely complicated civil-engineering project of a kind never attempted before in Britain, in very challenging terrain and which encountered various engineering and other difficulties along the way."

Fergus Ewing, the MSP for Inverness East, Nairn and Lochaber, said he is concerned that HIE has not revealed the final cost before.

He added: "If it knew the real figure some months ago, it was obliged to make it public. The problem is that the public may wonder that if this figure has not been revealed, what other things have not been revealed?"

Dave Morris, the director of Ramblers Scotland, said HIE had refused to negotiate with conservation bodies over an alternative project, using a gondola system to bring visitors to Cairngorm from Glenmore.

"HIE was not prepared to discuss an alternative scheme and now we are in this mess. What is required is action from the Executive to create a climate for discussion on Cairngorm in which HIE is compelled by ministers to sit down with the NGO [non-governmental organisation] movement and the community to find a way forward and work out how much more public money is required."