A leading Scottish Government economic development agency says it has received £11m after settling court action against constructors and designers of the UK's highest railway which had to shut five years ago due to structural problems.

Highland and Islands Enterprise had been pursuing a £14.5m claim against the company that owns Morrisons Construction and the civil and structural engineers for the scheme.

The agency made claims over defects in the design and construction of the railway and breaches of contracts which emerged after the funicular shut five years ago.

HIE had at one point included a provision of £14.3m for the cost of reinstating the funicular which had been expected to take two years.

News of the long-running case emerged in 2021 when it was revealed that ministers had to refund part of an EU grant for the original Cairngorm funicular because of discrepancies in the way it tendered for the work as costs spiralled.

As of the end of last year the cost to the taxpayer of funicular had soared to nearly £52m - with the costs of crucial repairs spiralling.

The cost of the repairs rose by 56% from £16.16m to £25m.

The faults were discovered after the costs of building the funicular spiralled from £14.8m to £26.75m.

READ MORE: Scot gov agency sues creators of shut Cairngorm railway for £14.5m

Calls were made for public inquiry into the management of the Cairngorm funicular, which it was hoped would re-open in late 2022.

The Herald:

It finally came back into action in January after a four-year hiatus.

The Cairngorms are a major Scottish tourism attraction and centre for recreation with downhill hillwalking and rock climbing a major draw for the 1.92m who visit the national park every year from around the world.

The crucial funicular, which was opened in 2001 and connects a base station with a restaurant and a ski area 1,097m (3,599ft) up Cairn Gorm mountain near Aviemore, was closed in September, 2018 due to structural issues.

The £14.5m claim was made against the now owners of Morrison Construction, Galliford Try Infrastructure Limited and Inverness-based AF Cruden Associates Limited, the civil and structural engineers for the scheme which had been taken over by Glasgow-based Arch Henderson.

The case was due to be dealt with in a proof hearing beginning this month.

But HIE has confirmed that it has reached an out-of-court settlement for £11m - £3.5m less than the original claim.

Stuart Black, chief executive of HIE, said: “We are pleased to have reached this settlement, which enables us to recover a significant amount of public funding and brings closure to these long-standing matters.”

The decisions over the contracts for the funicular were hit with allegations of cronyism and financial mismanagement that led to an investigation after chief executive of Highlands and Island Enterprise (HIE), Iain Robertson, announced in 2000 that he would be leaving to become director for corporate development for Morrison plc, an Edinburgh-based construction company founded and once chaired by one of Scotland's wealthiest men Sir Fraser Morrison.

The Herald:

In five years HIE had awarded a number of Morrison contracts including that for the building of the controversial railway up Cairngorm which they eventually received more than £10m for.

Morrisons were awarded the funicular contract in 1999, a year after Sir Fraser left HIE.

Audit Scotland said there was no conflict of interest in either case.

The Herald previously revealed that having already pumped more than £10m in works to fix the funicular, ministers and officials were considering scrapping the project altogether.

A dossier of internal Scottish Government documents showed that business minister Ivan McKee ended up sanctioning continuing with the project as the "least worst option" while warning additional finance could not be guaranteed.

The enterprise agency said that the project costs rise was due to the impacts of Covid, Brexit and blizzards in spring hampering repairs.

Official financial documents shed further light on the background to the funicular failures.

As part of a cost-cutting measure as the scheme was being progressed, HIE agreed with the contractors at the time that proposed steel beams for the track would be replaced with concrete.

According to the Cairngorm National Park Authority strengthening works to the railway viaduct will involve reinforcing props and concrete bases beside 63 out of 94 piers.