^ nope.

If a transaction removes a debt from the balance sheet, then it is indeed gone. If somebody else now has that liability, it is no longer attached to that company. If it is replaced by some other vehicle, such as commissions, the. It is still "gone", and only the commission charges remain.

Cmorrison has it technically right, and commecial wisdom is also on his side regarding use of cash in a flat Market. Cash is power these days.

If indeed the commissions are payable against the CML overdraft that was redeemed, then it is different from the funicular debt anyway.

But either way, cmorruson is right that the forward looking stance is to bolster investment from recent years of good revenue, and not be encumbered by sentiment over past debt.

Quote:
If the tax payer hadnt bailled out CML then we might not have any skiing on Cairngorm ?

There was no way on this Earth that HIE would have let the facility stop trading for any period, let alone risk invocation of the Section 50 agreement reinstatement clause.

Ahem,

HIE built the funicular, and arranged the financing thereof.

The ski-operations company had the task of operating it, but, was also partially financially crippled by having to close its only operating chairs (car-park and white-lady) during the main revenue earning season in order to allow pre-construction work to go ahead. Don't confuse the funicular construction and financing with the operating company. The operating company also lost money because of a range of other factors (core lift policy, overstaffing, etc., etc).

At the operating level, the company is now much sounder, although in a real world corporate environment (like the other centres) there would be a more rigorous attitude to reviewing major cost areas, so there is opportunity to increase profit now on existing business. There is a far greater case for Highland Council and BOS to get a slice of the £385k commission, as a lot of their written off debt is associated with non-funicular causes.

It rather looks like HIE knows that building the choo-choo was a bad idea, and is making the operating company (or more particularly the snowsport users) pay for HIE's extremely bad business decisions.

HTH - whilst the funicular debt might have been written off it is very clear that Cairngorm are still paying back HIE some of the £1 million that was required to prevent insolvancy in 2008. So they havent just walked away with a clean slate.

We should all be pleased that Cairngorm is now returning a modest profit. However this is very different to being in a postion where you can now reinvest.

As the old saying goes - money doesnt grow on trees.



Actually overstaffing and core lifts are both direct results of the funicular (the EU funding required a certain number of jobs be maintained & core lifts came about simply because the ski centre was going bankrupt due to trainset debt repayments).

EDIT : So as metioned all along.... the banks & HIE will almost certainly have the ultimate say as to if / when Coire Na Ciste may run again.



Edited 3 times. Last edit at 22.49hrs Mon 19 Sep 11 by Doug_Bryce.

I love these quaint truisms. But a debt is either on or off the sheet. Simples.

The HIE commissions will quickly repay the £1m if that's what you say it's for.

Those charges have not stopped Cap-Ex so far with the winch-cat being an example. That item alone is worth a full years charges to HIE. But these items are not Only funded for purchase, they are then phased for depreciation.

If I wish to buy a £1m ski lift this winter, I don't require that cash in hand, but I do have to service the loan from revenue. Once purchased it becomes an asset linked to a loan liability. As implied by cmorrison finance is quite well priced for Cap-ex projects currently. I've been looking at funding a piece of equipment this month, and the rates on offer are low single-digit. Quite encouraging in fact.

Quote:
EDIT : So as metioned all along.... the banks & HIE will almost certainly have the ultimate say as to if / when Coire Na Ciste may run again.

Why would the Banks have any say? CML has just shy of £1million cash at hand or in the bank on the latest accounts. CML does not have any outstanding Bank borrowings.

HIE as owners of the mountain and of the Chairlift will of course have some say, but left to rust the assets will become a liability for HIE. They can not be left in situ to rot in perpetuity so sooner or later the current situation is going to have to be addressed one way or the other.

As I understand it is that their removal would result in sizeable grants becoming repayable. As long as the lifts are standing and resemble chairlifts everything is fine on that score (for now)!

During the Summer the West Wall Chair has been fully re-roped, those skiing the Ciste area during winter may have noticed that heavy icing and strong winter storms caused numerous deropements. The haul rope is now back on every pylon sheave assembly.

However the West Wall Chairs bottom lifty shack has been demolished and is lying amongst a heap of junk under the Ciste Chairs return bullwheel.

See: West Wall Chair thread for a couple of pix.

> Why would the Banks have any say?



Obviously I don't know the full details. However given the previous financial disasters on the mountain will be very surprised if the bank ,and also other funding agencies, dont have some say on how money can be spent. Especially if its financed.

The very simple point that I have been making is that Cairngorm will have to jump through many hoops to get Coire Na Ciste running again. Its not a simple case of the CEO having spare cash from one good winter and deciding to spend it.

From Colins blog...

[www.cairngormmountain.com]



No doubt I will get another yellow card from the webmaster (via PM) for daring to say one word in favor of Cairngorm But hopefully if WH'ers understand the reason why things happened in the past then the vitriol might be a little less ?



Edited 1 times. Last edit at 07.44hrs Tue 20 Sep 11 by Doug_Bryce.

Just thought i would throw my opinion in the pot regarding Cairngorm as someone who visits as a holiday, not a local or even Scottish. I love the ski area and its setting but i think the area needs some drastic upgrades. Obviously we are in hard economical times at the moment but there must be some outside investment somewhere which would be willing to help out and get the place looking nice and more modern. The lifts are old and slow, some have been taken off line (complete suicide if you ask me) and others just need some paint and to look better. Obviously the snow in Scotland can be erratic to say the least but going off the past few winters there is no reason why upgrades shouldnt be going ahead. Just read the part from Colin's blog above and this line is rather odd "we should have some news before the winter, but i would not imagine any work would commence this year". They have had all summer to get things sorted so why will we have a better idea in a few weeks, just as the season is starting up again? Whats been happeneing all summer when other ski resorts in the northern hemosphere have been carrying out their upgrades? I think the owners of Cairngorm needs to give their heads a serious wobble and pretty quickly. Its just had 2 of its longest ski seasons for years and it has been an ideal opportunity to reward the customers (me and you) with getting the place looking decent and also and including reinstating the Coire na Ciste Chairlifts. Just an idea, why cant the Govenrment step in to provide some needed financial support? They would get the money back over time and also improve a much needed area of Scottish Skiing and improve it for the immediate future.

This post isnt to have a cheap dig at the place, just someone from outside looking in. The answers may be obvious to those who are based around Cairngorm/Scotland but for me it isnt so clear. Lets jsut hope for another good and long season.



Edited 1 times. Last edit at 08.16hrs Tue 20 Sep 11 by rickmanchester.

As I understand it, the revenue commission that CML pays to HIE was one of the conditions under which CML operate the funicular and associated uplift. It has therefore been due to be paid each year since the funicular went into service and is not associated with the repayment of any monies that were used to bale out the company in 2008. The Bank of Scotland and Highland Council accepted a settlement for what they were owed and as such are now out of the picture in terms of previously owed debts.
CML are now in a much better position finacially and it is indeed good to see that a profit has been made in each of the last 2 seasons. No reason why they should not be using the money earned to finance capital projects....such as the purchase of the Winchcat. A bumper season to come should provide more of the capital required to get the Ciste revevelopment proposals up and running if all of the various 'agencies' that Colin refers to in his Blog can be satisfied.

Regards

Olderalan

Looks like the new 'bridge' has gone in so they can farm snow from the carpark onto the lower runs.

Attachments: basestation_image11-10-07_13-34-02-20.jpg (79kB)  

Couldnt resist so what we need now is a car park just above the zig zags

Great idea removing the little footbridge. This will now allow all the snow from the link road and the car parks to be pushed up onto the lower slopes. Well done!

Seems like some good work from CML. Hopefully this will mean that they can keep the lower slopes open for longer.

I didn't even know about it until I saw Colin's blog. Thumbs up from me too & hope it works out. I've never given a f... about my bases anyway so don't give a monkeys about a bit of carpark grit in the final bit of snow to the Cas base station.

Smaller pipes and drainage have been put in on the lower uptrack of the Carpark Tow.