The buyer of Ruapehu Alpine Lifts has confirmed he has walked away from negotiations on purchasing the Whakapapa skifield, leaving its future uncertain.
Tom Elworthy and his partners were the government’s preferred bidder for assets of the Whakapapa skifield on Mount Ruapehu.
But Elworthy said the deal was not worth it and no-one would be willing to take on a business with more than $15 million of debt repayments and other risks.
New owners of the skifield needed to have a fresh operating concession from the Department of Conservation.
A 10 year concession was offered to Elworthy’s group but can be reviewed at the five year mark.
The government committed $20m towards keeping it afloat for last year’s ski season and over the last 16 months.
The previous Labour-led government said it was important to keep RAL running for the local tourism sector and the central North Island economy.
But its future is now unclear on whether the upcoming ski season can go ahead this winter without tax payer’s money to prepare it for the next ski season and to hire workers.
Prime Minister Christopher Luxon told media ministers Tama Potaka and Louise Upston, the MP for Taupō, were working on the issue and conversations about it were on going.
There would be “more to say about it later,” Luxon said.
Ruapehu District mayor Wes Kirton told Midday Report the withdrawal has put a major spanner in the works for the area.
“It’s frustrating for local businesses. Any business associated with the mountain will be very, very concerned along with the council. It turns over something like $100m collectively between the two mountains through our industry and that’s certainly a big hit for the community,” Kirton said.
He was aware that Whakapapa would be more difficult to negotiate because of different mana whenua connections.
“This area is split into two in terms of iwi relationships and the relationships with Tūroa are a little bit different from the northern part of the mountain.
“We’ve got Tūwharetoa of course who put a bid in and indicated they weren’t happy with the arrangements that were made so it’s only my guess that there’s been some sort of hiccup there in terms of relationships if not how it should all be unfolded.”
Kirton said it would be known in “due course” while the potential sale failed.
“I suspect that DOC along with the other stakeholders couldn’t see their way clear to get something over the line.”
He said he was not aware of the new government’s position and will urgently try to get ministers up to speed with everything happening around RAL and how important it is to the areas economy.
‘RAL is not a hopeless case’ – Ruapehu Skifield Stakeholders Association
Sam Clarkson, of Ruapehu Skifield Stakeholders Association, was furious the Ministry of Business, Innovation and Employment (MBIE) did not engage with the group’s idea to run both slopes together as a not for profit, using crowd funding and having iwi on board, saying officials favoured private for-profit bids.
The association wanted to meet with Regional Development Minister Shane Jones and Māori Crown Relations Minister Tama Potaka, without MBIE officials, to discuss the ski field’s future.
“RAL is not a hopeless case. There’s a solution. There’s a solution that works for iwi. There’s a solution that works for the ski community. It’s just not a solution that works for the privateers, that’s all.”
Whakapapa Holdings director Dave Mazey said a reduced support package from the Crown was a factor in the decision for it to withdraw from negotiations with the MBIE.
“In the end our investors came to the conclusion that it was an opportunity that wasn’t as palatable as originally put together.”
Only being offered a 10-year licence to operate was also untenable against the uncertain backdrop of Crown treaty settlements with local iwi and what that could mean for the use of the ski slopes.
“And probably the last thing that’s always been there, and what some people forget, is you’re taking on a $14m debt with the sky waka bonds associated with the investment made in 2018 and within four years that’s, effectively, got to be repaid.”
The development of the government-backed sky waka gondola, alongside the Covid downturn, curtailed RAL’s profitability.
Mazey said the government was amenable to Whakapapa Holdings, but it had its own constraints too.
“I think Whakapapa is a viable business going forward. This is assuming that the current debt levels are reduced significantly, and that we’ve got a tenure and an outlook that allows that traditional terrain available for skiing and recreational activity to continue to be available in some form.”
National Park Village Association chairperson Andrea Messenger said over the past decade the village, just 20 minutes drive from Whakapapa, had diversified from a complete reliance on the snow sport industry.
“I don’t think it’s going to make a massive difference who is going to be looking after the ski field today, tomorrow, next month or next year.
“I can’t really see it falling over. It’s the only ski field in the North Island apart from the club field over in Taranaki.”
Jones and MBIE declined to comment while commercial arrangements for Whakapapa were under consideration.
Article courtesy of RNZ
Photo: Supplied/ Ruapehu Alpine Lifts