THE Sky Waka Gondola is seen as a vital creator of year-round tourism revenue on Mt Ruapehu. FILE PHOTO
DESPITE the financial troubles of the company running ski fields on Mt Ruapehu, the mountain’s holiday season looks assured following a Government decision to tip $6 million into facilities there. A press release from the office of Economic and Regional Development Minister Stuart Nash said yesterday that this would avoid the possibility of liquidation of assets on the mountain and it followed discussions with stakeholders, creditors and iwi. It followed a recent $2 million top-up aimed at achieving the same outcome. In October the now defunct Ruapehu Alpine Lifts (RAL) placed itself into voluntary administration, owing $40 million to creditors. RAL directors blamed a crash in revenue due to border closures plus several poor ski seasons caused by La Nina conditions for its demise, though some Central Plateau tourism operators allege the company was also a poor steward of its resources on the mountain. SKI FIELDS NOT RUN WELL For example, Skotel manager Sam Clarkson said RAL had not run the ski fields well, due to inadequate governance oversight, a lack of investment, monopolistic behaviour after combining Tūroa and Whakapapa ski fields, management disputes, failure to put aside money for a rainy day, and ramping up debt to fund a year-round Sky Waka Gondola operation. However Stuart Nash said following discussions with affected stakeholders, including other creditors and iwi, it was clear that more time was needed to explore options to avoid liquidation and additional funding would provide a breathing space. He had hoped those who still held lifetime ski passes issued by RAL would put more money in but the response from this group had so far been muted. SUPPORT FALLS SHORT Life pass holders had indicated some support, but it fell short of the funding required to support a new entity to operate the Tūroa and Whakapapa ski fields, which meant more time was required to secure funding for a new entity. “We will provide $6 million to enable alternative solutions to be developed and provide sufficient working capital to retain the RAL management team while a potential resolution continues to be negotiated. This is in addition to the $2 million already extended to RAL from the Crown,” Stuart Nash said. “By providing this bridging finance we will be able to maintain staff who are critical to the maintenance of the assets on the mountain and enable it to operate next winter. “We are fully invested in exploring all options as we recognise the significant detrimental impact on both the economies and wellbeing of local communities especially Ohakune,” he added. Figures release by the Government show there are more than 11,000 lifetime pass holders and a positive response from 6000 of them would be needed to secure the future of the ski fields under a new entity. A recent survey testing the popularity of this move received 4,494 responses from life pass holders. Of this figure, 2,937 indicated they were willing to contribute $2,500 now and 2,614 said they would be willing to contribute $250 per annum for the next two or three years. This represented a potential $7.34 million now and $0.65 million per annum of new funding from life pass holders. A separate, independent survey of the general public undertaken by the voluntary administrators showed potential for additional capital to be raised from this group. But further investigation would needed to assess whether this could become a reality. GOOD WILL Sam said there was tremendous good will out there from the life pass holders and many more who had skied on Ruapehu over the years. “But I am not surprised that the survey drew such a lukewarm response, because they asked the wrong questions. “Effectively what they said was, we haven’t got a new company; we don’t know who will own it; we don’t know who the directors will be; we don’t know who the shareholders are and whether it will be for profit or not for profit. “But give us $3000 anyway. “So it’s no wonder they got such a mediocre response; who the hell is going to say ‘yes’ to an offer like that one? “For goodness sake, it’s pretty straight forward – you are going to have to lay out the terms of whatever is being proposed in a way so that people are able to make an informed decision.” Sam said he was an optimist and was certain that the lifetime pass holders and iwi would come on board. But this would require the Government to lay cards on the table describing how the ski fields would be run in future. “The nightmare scenario would be that ski infrastructure on the mountain will have to be dismantled, which would mean dismantling much the Central North Island’s economy. What would be the point of that – everyone would be a loser. “At least now Cabinet is driving things, which is a vast improvement on what we had previously. There’s a positive commitment now to keeping things going for the next month or two. “That means summer sight-seeing on the mountain is guaranteed to go ahead. “Previously the Sky Waka did not get the opportunity to show what it can do because of Covid restrictions and the fact that the boarders were closed. Now there’s every chance this operation will be cash flow positive. So those staff can be retained so that the business can run, and we’ll take that as a big win.” FUNDING A RELIEF Ruapehu Mayor Weston Kirton said the announcement from Stuart Nash that an additional $6 million would keep facilities going on Ruapehu would come as a huge relief to local communities and the wider region. “The news that RAL was looking at liquidation without further financial support generated a huge amount of concern with people extremely worried about what the ramifications of this would mean for the community,” Weston said. “Skiing on Ruapehu is too important to the social and economic fabric of the region and New Zealand tourism to be allowed to fail. This funding will allow RAL to maintain essential maintenance and get through and open for the 2023 season while allowing time to support the development of an alternative commercial solution.” He thanked Minister Nash for recognising the significance of skiing on Mt Ruapehu to the regional economy. “While it is not a long term solution to RAL’s woes it is the much needed lifeline needed at this time. The council is committed to working alongside the government and other stakeholders to work out a long term commercially viable solution.”
