Operator chosen for Cairngorms funicular railway

A PREFERRED bidder to operate the controversial publicly-owned funicular railway in the Cairngorms has been selected.

The controversial funicular railway on Cairn Gorm. Picture: Ian Rutherford

After a year-long exercise, the board of Highlands and Islands Enterprise (HIE), the development agency which owns both the mountain railway and its present operator CairnGorm Mountain Ltd (CML), has awarded preferred bidder status to tourism business Natural Retreats UK Ltd.

HIE Chief Executive Alex Paterson said: “This is a significant step forward in our procurement process, but it is not the end.”

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The funicular has been much criticised over the years.

In 2009, the public spending watchdog Audit Scotland estimated that it cost £19.54 million to construct the railway in the Highlands - almost £5 million pounds more than the budget of £14.6 million.

And when other support to operators Cairngorm Mountain Limited (CML) is included, the total cost for building and operating the railway comes to £26.75 million.

More than £23 million came from the public sector, with Highlands and Islands Enterprise (HIE) investing £19.4 million in the railway and its operator.

The funicular railway was part of a strategy to help regenerate the area, and it opened for business in December 2001.

But operators CML struggled financially, and in 2008 HIE took them into public ownership.

Mr Paterson said: “Over the coming weeks, HIE will hold further discussions with Natural Retreats on a number of points of detail, before deciding whether or not to proceed to awarding a contract.

“This is a normal procedure in complex procurements which follow the ‘competitive dialogue’ methodology.

“Whatever the outcome of the upcoming discussions with our preferred bidder, the railway and visitor facilities, and, indeed, the wider Cairngorm estate, will remain in public ownership through HIE.”

The Cairngorm attraction is Scotland’s only funicular railway, and contributes significantly to the tourism sector in Aviemore and the surrounding area.

Built by HIE and opened in 2000, it is well used by skiers and snowboarders through the winter, and attracts a broad range of other visitors throughout the year.

Dave Thompson SNP MSP For Skye, Lochaber and Badenoch which includes Cairngorm mountain, said: “I welcome the fact that progress has been made, and that HIE have now established a preferred bidder for the Cairngorm operation.

“I look forward to the next steps in the process developing in a similar positive way.”

HIE’s spending on the funicular railway was criticised three years ago by the Scottish Parliament’s audit committee.

In its report, the committee said threats such as warmer winters’ effect on skiing were not taken in account.

The committee said: “The enterprise body’s failure to take account of the risks was a key factor which led to spiralling construction and running costs.”

HIE, which took over the funicular and CairnGorm Mountain ski resort in 2008, has provided £19.42 million towards the £26 million cost of building and running the railway.