Podcast transcript – Review of Cairngorm funicular railway
What’s this report about? 
Our study examines the involvement of Highlands and Islands Enterprise with the Cairngorm funicular railway over a 17 year period, since 1992. It comments on the key processes and decision-making stages in the creation of the funicular and how public funds have been used and monitored during this time. We also look at HIE’s decision to take over the funicular from Cairngorm Mountain Ltd (CML) in 2008, and provide an update on HIE’s progress to develop a new business model.
What have you found?
We found that about £23m of public money has gone into the funicular and its operator, £19.4m of which came from HIE. The project cost significantly more than planned although consultants report that it has delivered the anticipated employment and wider benefits to the area.
The business case for the project was assessed and approved by HIE, the then Scottish Office and the EU in 1997, and the process met the requirements at the time. However, as we point out in the report, there were a number of important changes in the early stages of the project, which affected its viablity, such as falling numbers of skiers and the weak financial position of the company. HIE did not assess the effect of these changes nor review and adjust the business case before construction started in 1999. 
You refer there to some changes early on the process and that HIE didn’t then go and review the business case. Why was nothing done about that?
The public sector is much better at risk management now than it was in 1997. In 1997 HIE knew the project faced some risks, for example, nobody had built a funicular in Scotland before, let alone halfway up a mountain in a remote area and to very exacting environmental standards.
But there’s no record that HIE assessed the likelihood of these risks or the potential impact or of how they might have mitigated the risks. It wasn’t a requirement of the day but it would fall short of today’s standards.
What is the impact/importance on the public?
The public sector has invested significant amounts of money in the Cairngorm funicular over the years and the project has been challenged by a number of groups. However HIE and others believe that the project has provided a successful visitor attraction in the area and that it has helped create and retain jobs locally.

What would you like to see happen now?
Our report makes a number of recommendations for HIE of the next steps for the funicular and, more generally, in terms of how it appraises future capital projects.
In particular, we would like to see HIE:
•	develop a sustainable business model for the funicular, either by working with a new operator or working with the existing operation
•	continue to develop and embed good practice in its project appraisal processes for major capital projects.