13 Mar 2024

Ruapehu Alpine Lifts gets $7m bailout from government

5:37 pm on 13 March 2024
October at Whakapapa ski field, Mt Ruapehu.

Ruapehu Alpine Lifts has been given $7 million from the government. Photo: Supplied/ Ruapehu Alpine Lifts

The government has agreed to give Ruapehu Alpine Lifts (RAL) a $7 million bailout.

It has told the operator it will be its last taxpayer bailout, with Regional Development Minister Shane Jones saying "this is the last chance saloon".

This is RAL's fifth multimillion-dollar bailout in the last 18 months.

In October 2023, the government gave the company - which is in voluntary administration - an extra $7m.

That was on top of a $5m loan announced in June 2023 and $2m and $6m in November and December 2022 respectively.

In a statement, Regional Development Minister Shane Jones and Conservation Minister Tama Potaka said the latest bailout was to ensure the 2024 ski season could go ahead on the Whakapapa ski field.

Cabinet had also agreed to provide $3.05m in equity and loan funding to support the sale of Tūroa ski field assets to Pure Tūroa Ltd, the statement said.

Jones said this was RAL's final opportunity to find a commercially viable solution for Whakapapa.

It also provided more certainty for Tūroa.

"The government cannot indefinitely sustain the ski fields. That is why Cabinet is signalling a clear end point," Jones said.

"If no acceptable commercially led solution can be found within the next year, there will be no additional government funding for RAL's Whakapapa ski operations."

Last month, the government's preferred bidder, Tom Elworthy, walked away from negotiations on purchasing the Whakapapa skifield.

Elworthy said the deal was not worth it and no-one would be willing to take on a business with more than $15m of debt repayments and other risks.

The uncertainty over the skifield's future was "frustrating for local businesses", Ruapehu District mayor Wes Kirton said at the time.

"It turns over something like $100m collectively between the two mountains through our industry and that's certainly a big hit for the community."

Ruapehu Skifield Stakeholders Association earlier put forward a proposal to run Whakapapa and Tūroa together as a not-for-profit, using crowdfunding and having iwi on board.

However, the Ministry of Business, Innovation and Employment did not engage with the idea.

Jones said snow tourism was a large employer in the region, supporting about 800 full-time equivalent jobs.

Speaking to Checkpoint, Jones said it was "last chance saloon" for RAL and the skifields had "run out of motorway".

They had been struggling for years, he said, due to Covid-19 "and a host of other challenges".

Jones said RAL's receivers and his own staff hoped someone would buy both businesses, but due diligence had to be done.

In total, $32 million had been "poked into this enterprise" since 2020, he said.

"Obviously the local community are highly agitated, but I have to repeat what my mandate is: this is the last chance saloon, I have no authority to give another cracker."

Asked why the government was spending millions on a skifield rather than on a better police pay offer or free school lunches, Jones said the money had been "set aside in a fund" to work with businesses.

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