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Report due on funicular spending Cairngorms rail costs criticised
(about 9 hours later)
A report on a public agency's funding and running of a mountain railway is due to be released by the Scottish Parliament's audit committee. A public agency's failure to take account of risks to the running of a mountain railway led to "spiralling" costs, MSPs have said.
MSPs heard evidence last year on Highlands and Islands Enterprise's (HIE) spending on the Cairngorm's funicular railway. The Scottish Parliament's audit committee reviewed Highlands and Islands Enterprise's (HIE) spending on the Cairngorms' funicular railway.
The agency has provided £19.42m towards the cost of building and running it. In its report, the committee said HIE failed to take into account threats such as climate change.
Warmer winters have been blamed for affecting skiing in Scotland.
HIE, which took over the funicular and CairnGorm Mountain ski resort in 2008, has provided £19.42m towards the £26m cost of building and running the railway.
Over the next three to four years, HIE is to spend up to £4m on maintaining the funicular.Over the next three to four years, HIE is to spend up to £4m on maintaining the funicular.
We find it unacceptable that HIE did not review its business case before construction began Hugh Henry MSP
HIE said the investment would bring the site up to a standard that would attract a new operator from the private sector.HIE said the investment would bring the site up to a standard that would attract a new operator from the private sector.
Large debts
It has also proposed introducing charges at a car park serving the railway.It has also proposed introducing charges at a car park serving the railway.
About 400,000 people used the car park last year, according to HIE.About 400,000 people used the car park last year, according to HIE.
It said half of those visitors used the funicular.It said half of those visitors used the funicular.
Audit committee convener Hugh Henry said MSPs were critical of the agency's part in the project, from its inception to its current involvement.
He said: "We find it unacceptable that HIE did not review its business case before construction began to ensure that the project was proceeding on a realistic basis and the risks to public funds were minimised."
Mr Henry added: "The committee remains concerned about HIE's apparently open-ended financial commitment to the funicular.
"The potential for HIE to conclude its operational responsibility for the funicular hinges on its ability to transform the business and we therefore urge HIE to ensure that its future business plan for the facility is founded on accurate performance information and that rigorous financial control measures are adopted."
The agency took the railway and CairnGorm Mountain ski resort over in May 2008.The agency took the railway and CairnGorm Mountain ski resort over in May 2008.
It followed agreements reached with Bank of Scotland Corporate and CairnGorm Mountain Trust on large debts owed by CairnGorm Mountain Limited (CML).It followed agreements reached with Bank of Scotland Corporate and CairnGorm Mountain Trust on large debts owed by CairnGorm Mountain Limited (CML).
Highland Council also agreed to write off a £1m loan to CML.Highland Council also agreed to write off a £1m loan to CML.
The Scottish Parliament's audit committee reviewed the financing of the funicular following an investigation by spending watchdog Audit Scotland.The Scottish Parliament's audit committee reviewed the financing of the funicular following an investigation by spending watchdog Audit Scotland.