Cost of Cairngorm funicular repairs could run to £15m

The railway has been closed since September 2018

Repairing the Cairngorm funicular could cost up to £15m, according to a report.

The UK's highest railway has been closed since September 2018 due to structural problems.

It is owned by Highlands and Islands Enterprise (HIE) and the Scottish government must approve the repairs including the final cost.

Audit Scotland said HIE and the government faced making "tough decisions" on the railway and wider Cairngorm ski resort.

• Funicular repairs approved by park authority

• Condition of funicular 'disappointing' for its age

• CairnGorm: Where did the money go?

• HIE takes control of CairnGorm Mountain

The funicular connects a base station with a restaurant and the ski area 1,097m (3,599ft) up Cairn Gorm mountain near Aviemore.

A previous estimated cost of repairs, which include strengthening the railway's piers, beams and foundations, was put at £10m.

The auditor general's report also looked at HIE's handling of the companies contracted to run the Cairngorm Mountain snowsports area.

HIE, a public body, awarded Natural Assets Investments Limited a 25-year lease to run the resort and the funicular in 2014.

But within four years, Natural Retreats' subsidiary Cairngorm Mountain Ltd (CML) had collapsed.

HIE stepped in and set up a new company, Cairngorm Mountain (Scotland) Ltd, to run the business. It continues to do so.

The new report said HIE carried out "due diligence and used financial guarantees to protect its position" in 2014.

The enterprise company also put in place monitoring of CML's performance.

The funicular is part of the wider Cairngorm Mountain ski area

But the report said it would have been in HIE's interests to continue to review Natural Retreat's finances beyond the procurement stage, "given the risks identified then around Natural Assets Investments Limited's financial standing".

HIE has been credited with acting quickly when CML went into administration.

'Pandemic increases uncertainty'

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."

HIE said its dealings with Natural Retreats had now been investigated by both the Scottish government and Audit Scotland.

A spokesman said: "Their conclusions support the view that HIE acted correctly and professionally throughout this period.

"The reports also make important recommendations, including measures to assess and manage key risks. We have already taken these points on board and put new processes in place to provide additional safeguards, while recognising that intelligent risk-taking plays an essential role in economic development."

HIE said it was now focused on finalising a full business case to determine the next steps to deal with the funicular, "and engaging with stakeholders to create a long-term Cairngorm masterplan".

Scottish Greens Highlands and Islands MSP John Finnie said it was vital the local community was involved in any decisions on the future of the funicular and ski centre.

Highlands and Islands Labour MSP Rhoda Grant said plans for the centre had to be progressed to help secure the survival of the local economy.