Investigation into £50m scheme hailed as long overdue by former HIE director
By Rob Edwards, Environment Editor

The £50 million fiasco over the Cairngorm mountain railway is to be investigated by the Scottish government's public spending watchdog.

The huge sums of taxpayers' money spent on the funicular railway near Aviemore by Highlands and Islands Enterprise (HIE) are to be probed by Audit Scotland. The launch of a major inquiry has been hailed as a victory by environmental campaigners, who have long demanded a probe into what they see as a public funding "scandal".

The Cairngorm funicular, which runs almost to the summit of the mountain, has been plagued with controversy since it was proposed in the early 1990s, and has struggled to make money due to a lack of visitors. In May, Cairngorm Mountain Limited, the company that ran the funicular, was taken into public ownership by HIE so it didn't go bust.

Independent estimates suggest the railway could end up costing the public purse more than £50m, plus another £50m should it have to be removed. Now the auditor general for Scotland, Robert Black, has submitted a report to parliament saying he wants HIE's funding of the funicular to be reviewed.

"Due to the long-running difficulties with the operation of the funicular, culminating with HIE's decision to take Cairngorm Mountain Limited into public control, I have asked Audit Scotland to undertake a specific review of the project," said Black. "The review will examine both HIE's plans for the future operation of the funicular and relevant historical events and activity. I intend to report to the parliament in 2009."

Alan Blackshaw, who quit as a director of HIE over the funicular in 2000, described the probe as "long overdue". He has been researching the funicular's finances for years, and urging Audit Scotland to intervene. "This should at last establish the missing facts on the very high cost to the taxpayer," he said.

Dave Morris, director of Ramblers Scotland and a veteran opponent of the funicular, was "delighted". He said: "It is essential that lessons are learned from this disastrous HIE adventure in the Cairngorms. We expect it will lead directly to a recommendation from the Scottish parliament that HIE should transfer all of its landholding in the Cairngorms to the Forestry Commission or the national park authority and depart from the mountain for good."

The Sunday Herald reported in July that HIE had been accused by the Forestry Commission of trying to hide the problems plaguing the funicular. In September we disclosed that HIE had estimated the cost of removing the railway from the mountain at £50m.

Last week it emerged that £13.3m of grants to the Highlands and Islands may have to be repaid to the European Commission. The money, which EC auditors say has been incorrectly spent, could include some of a £2.7m grant to the railway.

An HIE spokesman said there had been no agreement yet on what money was to be repaid. On the new inquiry, he said: "Naturally, HIE will be pleased to co-operate fully with Audit Scotland."