MSPs to consider funicular report

The building and operation of the funicular has run to £26.75m

A report on the financing of the Cairngorms' funicular railway was due to be considered by the Scottish Parliament's public audit committee.

Public spending watchdog Audit Scotland's report followed its investigation of Highlands and Islands Enterprise's backing of the project.

Since construction work started in 1999, the building and operation of the funicular has run to more than £26.75m.

Most of the funding has come from HIE which has spent £19.42m.

HIE has said the funicular was a key element of attempts to regenerate tourism in the area.

'Speculative' costs

In its report, Audit Scotland said the railway had met expectations of creating employment and attracting tourists.

But prior to construction, the watchdog said HIE had been focused on the project's design and controlling costs but had not taken account of, or reviewed, changes affecting skiing and operator CML.

According to Audit Scotland, a decline in skiers was among risks to the project not taken into account before it was built.

At the time the number of skiers using slopes in the Cairngorms was in decline.

In 1997, 97,000 skiers used Cairngorm but this fell to 75,000 in 1998, according the report.

The business case put together in support of the project had assumed 186,000 ski visitors per year.

CML was also struggling financially, said Audit Scotland.

In 1997 and 1998, the company reported losses of £607,000 and £625,000.

Also contained in the report are the £30m-£50m "speculative" costs of shutting down the railway and dismantling it.

Opened in 2001, construction cost £19.5m - almost £5m more than expected - but the total costs have since run up to £26.75m.

Most of the funding has come from HIE, followed by £3.26m from the Bank of Scotland, £2.61m of European Union grant aid, £1m from Highland Council and £100,000 from the Cairngorm Trust.