The Whakapapa skifield is being run by the receivers of beleaguered company Ruapehu Alpine Lifts. Photo / Sarah Ivey
The Whakapapa skifield is being run by the receivers of beleaguered company Ruapehu Alpine Lifts. Photo / Sarah Ivey
Concerns have been raised about commercial viability in official advice to Cabinet around Mount Ruapehu’s Whakapapa skifield, which has been subject to an on-and-off bidding war for some time, following the downfall of ski company Ruapehu Alpine Lifts.
The skifield, sitting on the northern side of the mountain, has been under more uncertainty recently than its southern counterpart Tūroa. The Tūroa side is being run for the first time this season by company Pure Tūroa, after recently receiving a 10-year concession from the Department of Conservation following a lengthy bidding and consultation process.
Meanwhile, conversations around Whakapapa continue to go back and forth.
A deal did not come to fruition while the Tūroa agreement was being signed off. Iwi representation group Ngāti Tūwharetoa pulled its bid from the table last year, with Uenuku iwi chair Aiden Gilbert telling NZME at the time that Māori have not had enough say, and the discussions had all pre-empted the Tongariro National Park settlement.
Whakapapa Holdings, which pulled its original bid, is now back and negotiating a potential concession.
Despite the new-found confidence, an advice document to Regional Development Minister Shane Jones, released by the Ministry of Business, Innovation and Employment (MBIE), raises red flags about the future of the skifield.
The document from the ministry to Jones was proactively released by MBIE. It describes the Government’s controversial decision to put more millions towards both sides of Mount Ruapehu, described at the time as the “final” bailout.
In it, Jones was reminded of the importance of Mount Ruapehu’s contributions to the local economy and the potentially dire picture that could be unveiled if the Government’s cash input to the ski area ceases.
The document reveals the receivers of Ruapehu Alpine Lifts, Calibre Partners, would cease operations and sell the assets on the Whakapapa skifield if no further Government support was provided.
It’s estimated that if the Whakapapa assets were to cease operation, the impact on the local economy would be dire. Hundreds of jobs in the region, either directly linked to the skifield or indirectly, would be lost, alongside more than 250,000 guests each year to the region, and a multimillion-dollar loss in annual regional spending, to the tune of $64 million.
Cabinet was told that continued support for the maunga would preserve more than 1000 jobs “in an area with a high level of deprivation” and also provide an opportunity to further engage with iwi, who had been subject to an engagement process described as “flawed” by former Regional Development Minister Kiri Allan.
Jones was told that, from a financial perspective, removing financial support for the skifield would “reduce financial risks” and eliminate uncertainty.
Official advice pointed to numerous prior Government bailouts to Ruapehu Alpine Lifts (RAL), which had been running both sides of the mountain as the lengthy bidding process took shape. The fact numerous funding announcements had been made over the years following RAL’s struggles, liquidation and further receivership suggested “challenges” that revenue and cost forecasting may be inaccurate.
MBIE suggested RAL’s requirement for financial support “could be substantially higher than predicted”.
Further concerns were raised in the MBIE document; it stated continuing to support RAL could be viewed as a “market distortion”, when prices vary from the normal supply-and-demand process.
“The challenges in concluding a viable sale for RAL’s Whakapapa assets suggests that it is not a commercially sustainable business,” the document sent to Cabinet reads.
The Government was warned that funding RAL effectively makes the Government the “de facto operator and owner of assets that are likely to be unprofitable” over a long term. Further funding to Ruapehu Alpine Lifts could be viewed as the Government subsidising the business and its stakeholders when the funding could be better used on other priorities, the document said.
In a statement, MBIE’s head of kānoa Robert Pigou said the expressions of interest process, which came to a close on Friday last week, is the “final opportunity” for RAL to find a commercially viable solution for Whakapapa.
“The Government cannot indefinitely sustain the skifields and that is why Cabinet signalled a clear end point in March 2024 - if no acceptable commercially led solution can be found within a year of that date, there will be no additional government funding for RAL’s Whakapapa ski operations,” Pigou added.
In December 2023, MBIE wrote to Whakapapa Holdings with concerns if its original proposal was accepted, the Crown could be seen as taking on a “disproportionate level of risk”.
Whakapapa Holdings formally withdrew its bid in December, but boss Dave Mazey has confirmed his application is now back on the table.
Speaking to NZME recently, Mazey said it can be a commercially viable investment opportunity.
“The two ski areas on Mount Ruapehu contribute significant value to the economy of the central North Island,” he said in an interview.
The receivers of Ruapehu Alpine Lifts are set to operate this year’s ski season until around October.
Azaria Howell is a Wellington-based multimedia reporter with an eye across the region. She joined NZME in 2022 and has a keen interest in city council decisions, social housing and transport.
