Probe called on 'scandal' of mountain rail takeover

Published on Wednesday 26 November 2008 20:41

SCOTLAND'S Auditor General yesterday ordered a review into a public agency's takeover of the controversial Cairngorms mountain railway.

Robert Black, the head of the public-spending watchdog, will examine the decision taken in May by Highland and Islands Enterprise (HIE) to take control of the funicular's operator, CairnGorm Mountain Ltd (CML), which had debts of more than 400,000.

HIE subsidised the building of the funicular, but, due to long-running financial difficulties, it stepped in to take over ownership of the operating company.

Highland Council had previously agreed to write off a 1 million loan to CML.

Independent estimates indicate the railway could eventually cost the taxpayer more than 50 million, plus another 50 million if the decision is taken to remove it.

The investigation will also examine HIE's development plans for the railway near Aviemore.

Fergus Ewing, the area's MSP, said the main reason the funicular, which opened in December 2001, had financial difficulty was that opponents had bitterly fought it since "day one".

"The construction of the funicular was delayed for well over a year because of the court action raised against the company by WWF and RSPB," he said. "That court action failed in every court but CairnGorm Mountain incurred a year's interest because of the protesters' legal delaying tactics. I will be making sure the Auditor General takes this into account.

"I am confident he will conclude there was no financial impropriety and that the difficulties of running a successful operation were those of unreliable weather and debt the company was saddled with."

Mr Ewing added that the funicular had brought hundreds of jobs to the rural community.

Environmental campaigners, who have been demanding an inquiry into what they describe as a public-funding "scandal", welcomed the review.

Dr Gus Jones, convener of the Badenoch and Strathspey Conservation Group and a long- running critic of the project, said: "Promotion of the funicular has been characterised by spin and secrecy.

"Nowhere is this more evident than in the exaggerated economic claims that are made for a venture that is now essentially bankrupt and has been loss-making from the start.

"It is an indication of grave institutional failure that Audit Scotland's inquiry is needed in the first place."