Thu, Oct 12, 2023 5:00 AM

Opinion: Corporate welfare in skifields dispersal


Paul Charman

Ruapehu Alpine Lifts went into voluntary administration about a year ago and despite excellent snow this season, its survival has relied on mil-lions of dollars in government top-ups.  

There’s no argument with the Government temporarily propping up an asset accounting for about a 10th of the Central North Island economy, or about $100 million a year.  

In particular, such support has got to be good for the three main King Country towns, each of which are en route for Aucklanders making their way to the ski slopes. This kind of government support helps “the little people”, the likes of cafe owners, mechanics and ski hire businesses and so on. And it has no doubt prevented the skifields from disappearing altogether.

But wouldn’t it be nice if an incoming government, such as a National/Act/NZ First Coalition gets to scrutinise that other kind of government support in this process. I mean the extraordinary degree of corporate welfare so far evident in the dispersal of assets once operated by Ruapehu Alpine Lifts (RAL).  

For example, if the Government’s powerful brokers get their way, Pure Tūroa will be able to purchase the Turoa ski field for $1 and run it on tens of millions borrowed from the taxpayer.

Excellent sources tell us it will also be offered an interim amount of about $3 million – technically available to draw down ahead of the final granting of concessions to operate in the Tongariro National Park and possibly ahead of negotiations with iwi being completed.  

That last phase could take months, during which time Pure Tūroa would apparently need to set themselves up at the taxpayer’s expense to take over the asset, presumably by hiring staff, purchasing office equipment like photocopiers and so forth, and renting a premises at Ohakune to provide a presence in town. Should all that come to pass, what a red carpet it would roll out for this private company. (We have asked Pure Tūroa for comment).

But who are these powerful brokers who have picked their winners and stayed so committed to seeing them succeed?  

They are the successor to the Provincial Growth Fund, namely the Ministry of Business, Innovation and Employment and its regional economic development arm, Kanoa.  

And let’s not forget the voluntary administrators (now liquidators) PwC, who throughout the process have barely bothered to conceal their dis-dain for the suggestion of maintaining community ownership of RAL, as proposed by the Ruapehu Skifield Stake Stakeholders Association (RSSA).  

This last group put up a realistic bid for the skifields, but it was one which didn’t attract a dime from the Government.

PwC, MBIE and others even succeeded in spooking Ruapehu Mayor Weston Kirton, who narrowly persuaded his council to back the corporate bidders over the skiers and stakeholders.

Yet, the ski community ownership model of by-skiers-for-skiers still has clear advantages, in my view.  

This community has had a track record of operating the Ruapehu ski-fields for almost 70 years, during which time they have propped it up financially by purchasing lifetime passes.

Their loyalty to the mountain is beyond question. Private companies come and go, but the skiers have shown they’re in it for the long haul.

Some of the older skiers this organisation represents helped to build the Tūroa and Whakapapa skifields.

And as well as being passionate about the mountain, members of this community are accustomed to dealing in a complex business environment.

It’s one which must take into account demands of iwi, DOC, the ever-present challenge of climate change, the spectre of volcanic eruptions and many other considerations.  

And while there has been nothing illegal in the way the private company bidders and their Government backers have acted thus far, the process has been far from transparent.

Had there been an open tender process, which the likes of Pure Tūroa had won fair and square, probably none of us would have objected. But instead, the machinations of PwC, by which they chose to recommend Pure Tūroa and Whakapapa Holdings as preferred bidders, were largely conducted in secret.  

That’s a pity, because it seems to some of us that a profit-making private company model is less in tune, than a community ownership model, with the sensitivities required to operate these unique skifields efficiently into the late 2020s and beyond.

King Country News
King Country News, King Country Farmer and the King Country App is independently owned published by Good Local Media Ltd – also publishers of the Te Awamutu News, Cambridge News and Waikato Business News.