Tough decisions required at Cairngorm Mountain
The public body responsible for Cairngorm Mountain acted appropriately when selecting a private company to manage the resort, but tough decisions on its future are now required.
Cairngorm Mountain Limited (CML), which operated the mountain's winter sports and leisure activities, went into administration in 2018 following the closure of the funicular railway due to structural problems. The company's business and assets were then taken back into public ownership by Highlands and Islands Enterprise (HIE).
HIE transferred ownership of CML to Natural Assets Investments Limited (NAIL) in 2014 after carrying out due diligence and using financial guarantees to protect its position. It also put in place monitoring of CML's performance. But it would have been in HIE's interests to continue to review NAIL's finances beyond the procurement stage, given the risks identified then around NAIL's financial standing.
HIE acted quickly when CML went into administration and secured the assets and business activities of the mountain resort, establishing Cairngorm Mountain Scotland Limited (CMSL) to manage its operation. But stabilising the business and seeking to reinstate the funicular has put a strain on HIE's staff and finances.
Caroline Gardner, the Auditor General for Scotland, said:
HIE and the Scottish Government now face tough decisions on how to secure a sustainable operation at Cairngorm Mountain.
The Covid-19 pandemic increases the uncertainty around the costs and business model required for the mountain in the longer-term. Any future spending decisions need to be informed by the wide range of groups with an interest in the mountain. And it's important they should take into account the resort's social and environmental impact alongside its economic benefits.