With the current shambles on Cairngorm, what would actually happen if NR either walked away or were booted off the hill?

I believe that HIE own the trainset, the daylodge and Ptarmagan cafe. However I have read that NR have mortgaged various parts of the business - asset stripping has been mentioned..
I thought that all ski infrastructure was owned by HIE (not just the train) but leased by NR, so what has NR taken loans out on (if that is true)

So: if NR was to no longer run the business, would essential kit such as ski lifts, kassbohrers, snowmaking, workshop equipment etc etc still remain in place or could NR really cause a new operator serious difficulties?

Depends whats in the contracts. Anyone seen them? I'm guessing it included a list of assets and who owned what.

Another government buyout a la Prestwick? At least CG could be turned into something profitable in that scenario.

As HIE own the now broken train, I suspect there will be a clause in the contract whereby HIE have compensate NR/CML, or at least waive part or all of the lease payments. This could however get pretty complex as I understand it is NR who are responsible of the maintenance and inspection of the train.

It will cost a lot of money to buy NR out of their contract and what ever assets they actually own up the hill and I cant see them walking away.

[parkswatchscotland.co.uk] has a lot of interesting commentary on the contractual and financial bafoonery going on at Cairngorm.

A lot of these questions could be answered if the public could inspect the actual HIE-NR lease. Has anyone put in a FOI request to see it?

In the 2016 survey report (available on this website due to a FOI request) there were a lot a defects, but nothing too terminal. It would be very interesting to see the 2017 and 2018 annual inspections. I suspect the 2017 showed a significant deterioration hence the go slow low load policy, and the 2018 inspection showed up something pretty catastrophic hence the shutdown and further inspections. If the 2017 report did show a significant deterioration, why did they wait until the autumn of 2018 to do the annual inspection leaving little of no time for further investigations (ongoing now) and no time to actually do any repairs before freezing winter weather which is not particularly suitable for concrete / grout repairs up a mountain.

Of course, they could build heated habitats around each repair site, so given the right can-do attitude they could do some meaningful repairs through the winter. However, if the issues are more wide spread or require significant ground works (i.e replacing one the piers, lifting the track off) then it is game over...and best case is the train up and running for the 2019/2020 winter season.

Well I just get abuse but £1.9million has been put in personally by David Gorton in the last 2 years. If he walks away there will be no skiing ever again on Cairngorm. Because no-one else would be prepared to do that. If the neanderthals know of anyone else they should let HIE know or shut up.

Isn't the cash he's put in just loans which are essentially to himself?

A loan is still cash in hand. What did they spend the cash on?

Extensive coverage of CML and NR financials here:

[parkswatchscotland.co.uk]

NR Chief David Gorton is not only propping up Cairngorm, but the rest of the NR group to the tune of £35M.

Any other company or community asset owners would have been totally wiped out by now, so perhaps all this NR bashing is not altogether warranted? Their day-to-day ops and communications are poor, but as JollyDee says without them (i.e the great David Gorton as his cash) there would be yet another failed operator with fook loads of public cash squirted on Cairngorm...again.

It's confusing to me.

He must have a head for business if he has that kind of money.

CGM does not appear to be likely to give a return on investment.

Is there some complicated accounting reason someone would keep pouring money into something that on the face of it doesn't seem to make good business sense?

The CML accounts show that £1.9m is owed to 'Group Undertakings'. The direct parent company of CairnGorm Mountain Ltd is Natural Assets Investments Limited. As I pointed out in a previous reply ( see here) the Administrative Expenses as a % of turnover has increased from 18% to 36% since Natural Retreats took over CML.

This is the difference in Admin Expenses vs had the % of turnover remained the same as in 2013 and 2014:

Dec 2017    Dec 2016     Dec 2015    Mar 2015

+£0.6m.     +£0.4m.      +£0.5m.     +£0.3m

Accumulated increase in Admin Expenses is £1.8m compared to had the % of turnover for admin expenses pre Natural Retreats been maintained. That subject to rounding error matches the £1.9m owed to 'Group Undertakings'.

It can't be said from public accounts what the proportion of the total expenses of £4.5m over the period has been local expenses through CML and what has been paid to the 'Group Undertakings'.

Whatever the ultimate destination of the money owed, admin expenses have doubled as a proportion of turnover since pre NAIL. All the directors of CML are ordinarily resident outside of Scotland and proportion of marketing, finance and Human Resources roles has been shifted from the mountain to group HQ in Wilmslow.

That represents a significant loss of higher end employment from the local area which has a negative multiplier effect on Strathspey. HIE should explain how that fits with the remit of organisation to strengthen Highland Communities?

Perhaps you are familiar with the Natural Retreats group of companies? If so any comment on why in March 2014 the CML pension fund had.a surplus of £114k and by Dec 2017 it had a deficit of £454k?



Edited 1 times. Last edit at 20.22hrs Sun 28 Oct 18 by alan.

Neither of you have fully read my previous posts on this subject..infact "JollyDee" still hasn't answered my question/points I previously raised..

David Gorton has NOT personally funded CGML which is wholly owned by Natural Assets Investments Ltd...(NAIL)

NAIL took out a standing charge (loan with HSBC) in November 2014...over the whole of the assets etc of NAIL...



From the NAIL accounts ending December 2017:-
NAIL paid D.Gorton £3.6million...this is just declared as "interest" on a loan

NAIL has various long term loans with D.Gorton totalling £51million...these are subject to interest of 0-10% & repayable within 12 months notice if required.

NAIL has pledged land & buildings & investment properties having a net book value of £23.9million to secure its bank loan..(presumably the HSBC one)

Numerous other companies he is involved in having various loans/interest repaid to them by NAIL.

Unfortunately due to the way NAIL submit their accounts allot of info is not available..

The pages 32 to 44 of the accounts are most detailed as to creditors...& go look at the pages 40 to 44 on "related Party transactions....shed loads of "loans" etc whizzing around between subsidiary groups....

That's how you make earnings from one company "disappear" legally into your back pocket....oldest trick in the book...for a Hedge Fund Manager...



From December 2017 CGML accounts:-

It "received management services amounting to £491K & fixed assets & other services amounting to £140K..from "The UK Great Travel Company Ltd"...a subsidiary of NAIL....

Also CGML had £1.89million owing to NAIL for "group undertakings".....



"The UK Great Travel Company Ltd"...was "Natural Retreats UK Ltd"..

& in TUKGTCL" companies accounts it owes money to virtually every subsidiary in NAIL....



Its the great big "money--go--round".....watch out folks as it will disappear so fast down the hole in the middle you won't see it....

ever again...


---That was not a fall, I intended to do that!---



Edited 3 times. Last edit at 21.04hrs Sun 28 Oct 18 by SnowmanDave.

Ask why CML has been losing so much money requiring the input of cash to stay afloat. Apart from the rake offs by NAIL,it might just be because it is catastrophically losing market share in a stable market. That is because of the way business has been run under Mr gorton's stewardship.

Maybe the neanderthals have a better understanding than you do?

I have a lot of sympathy for all the businesses in Aviemore and the surrounding area, the effect that this will have on them could be pretty serious.

But solely looking at Cairngorm mountain as a ski centre/ business it is getting what it deserves. They have decided they want to reduce the amount of ski lifts, turn away from their previous core product, focus on year round tourists, build bigger cafes for cake hunters etc......

but it looks like that is not what the paying customers want. they've lost a huge % of their market share, whilst the other ski resorts have been improving and offering a much better service.

yes this is sad as aviemore/ cairngorm has always been seen as the centre of scottish skiing. but at the end of the day its a business, customers obviously feel they are getting a better product from another source and going else where.

Any normal investor would be running for the hills (he would have to run, no uplift) after being around to witness the last 5 years "operations" at Cairngorm.
Mr Gorton must be very special, maybe something like that nice Mr Greene who has been in the news again recently?

A technicality here, the lease over the Ski Area is as it was before Natural Retreats involvement, a lease between HIE (landlord) and CairnGorm Mountain Ltd (tenant). The lease is not held by Natural Assets Investments Limited.

The lease is a full maintaining lease though, however since NAIL acquired CML, HIE has spent £1.2m on upgrading electrical systems on the tows and around £600k on urgent building repairs. However when you take a detailed look around at the state of the place you realise this barely scrapes the surface and the place is rapidly becoming a collection of derelictions.

The upkeep of the built environment and the quality of it falls far below what it ought to in what is a key access point to the high mountain core of the National Park.

What in many more ways would be of more interest to the public than the CML lease, is the suite of no doubt extensive legal documents underpinning the transfer of the shareholding in CML to NAIL and the mechanism for the return of that shareholding at the end of the 'franchise' whether premature or at the end of the 25 year term.

Of course if CML's lease was terminated, the ownership of the shareholding would be completely irrelevant as CML would be worthless with it's lease of the snow sports area.

However it is worth pointing out the regulation of railways is still largely governed by a suite of 19th century Regulation of the Railways Acts, and it would require either an amendment or new private act of the Scottish Parliament to allow someone other than CML to operate the Funicular Railway as CairnGorm Mountain Ltd is explicitly named in the relevant construction order.



Edited 1 times. Last edit at 14.53hrs Mon 29 Oct 18 by alan.