24th February 2026
The Scottish Parliament's Public Audit Committee has released its latest report on the Cairngorm Funicular Railway, offering one of the most detailed examinations yet of the project's troubled history, escalating costs, and long‑term prospects.
The funicular, which has become both a symbol of Highland tourism and a lightning rod for criticism, is once again under scrutiny and not only for its engineering failures but for the governance and financial decisions that shaped its past and will determine its future.
Here is a clear breakdown of the report's key findings, including the positive developments, the serious concerns raised, and the full picture of the costs involved.
A Vital Asset With a Troubled Past
The Committee acknowledges that the Cairngorm funicular remains a critical economic asset for the region. It supports local jobs, underpins winter tourism, and plays a central role in the wider Cairngorm Mountain Masterplan. The report recognises that the railway has the potential to anchor a year‑round destination, reducing reliance on unpredictable snow seasons.
However, the report also makes clear that this potential has been repeatedly undermined by engineering failures, governance weaknesses, and spiralling public costs.
Positive Findings: Economic Value and Long‑Term Planning
Despite the controversies, the report highlights several encouraging developments:
1. The Funicular's Economic Importance
The Committee notes that the funicular is central to the economic vitality of the Cairngorms. Its presence supports local employment, hospitality businesses, and the broader tourism ecosystem.
2. A Clear Long‑Term Vision
Highlands and Islands Enterprise (HIE) has developed a long‑term strategy through its Cairngorm Mountain Masterplan, which aims to transform the mountain into a sustainable, year‑round attraction. This includes diversification into non‑snow activities and infrastructure upgrades.
3. Legal Barriers Removed
Long‑running legal disputes surrounding the funicular's construction and repair responsibilities were resolved in 2023, allowing repair work and future planning to progress without further litigation delays.
Negative Findings: Structural Failures, Oversight Issues, and Rising Costs
The report is equally clear about the serious problems that have plagued the funicular since its construction.
1. Major Structural and Engineering Failures
Audit Scotland's earlier investigations (2009, 2019, 2020) identified significant flaws in the original design and construction. These included inadequate structural elements and insufficient oversight, ultimately leading to the funicular's closure in 2018.
2. Weak Governance and Risk Management
The Committee raises concerns about HIE's governance arrangements, contractor oversight, and long‑term risk management. These weaknesses contributed to both the structural failures and the escalating costs of repair.
3. Uncertain Long‑Term Viability
Even after repairs, the funicular faces ongoing challenges:
High maintenance costs
Climate‑related risks to snow‑dependent operations
Questions about whether the railway can generate sustainable revenue
Cost Breakdown: Construction, Repairs, and Ongoing Funding
The report draws on multiple financial reviews and Audit Scotland analyses to outline the full cost picture.
1. Original Construction Cost
The funicular railway originally cost around £26 million to build. This figure has been widely cited in Audit Scotland's 2009 review.
2. Repair and Reinstatement Costs
Following its closure in 2018, the funicular required extensive structural repairs. Audit Scotland’s 2019 and 2020 reports estimated the cost of reinstatement at £20-25 million, covering:
Structural strengthening
Project management
Engineering assessments
Associated legal and operational costs
3. Ongoing Public Funding
HIE’s recent accounts (2023/24 and 2024/25) show continued public investment in:
Mountain operations
Infrastructure maintenance
Snowmaking and uplift improvements
The Scottish Government’s Infrastructure Delivery Pipeline (2026) also lists Cairngorm as an ongoing capital commitment, indicating that further investment will be required in the coming years.
Representative Themes From the Report
While I cannot quote the report verbatim, these paraphrased themes reflect its tone and conclusions:
Positive Themes
The funicular is described as essential to the region’s economic health.
The long‑term masterplan is seen as a constructive step toward sustainability.
Critical Themes
Audit Scotland highlights significant weaknesses in oversight and risk management.
The Committee expresses concern about the scale of public funding required to address preventable failures.
A Project With Promise — and Persistent Problems
The 2026 report paints a picture of a project with undeniable economic value but a long history of mismanagement and costly engineering failures. While recent repairs and strategic planning offer hope for a more stable future, the funicular remains a high‑risk, high‑cost asset.
Its long‑term success will depend on:
Stronger governance
Effective maintenance
Diversification beyond winter sports
Continued public scrutiny
The Cairngorm funicular may yet fulfil its promise as a year‑round Highland attraction but only if the lessons of the past are fully absorbed.
Read the full report HERE
PHOTO
David Monniaux - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=228054
Statement issued by HIE - 24 February 2026
The Committee's report has been published today (Tuesday 24 February) on a dedicated page on the parliament's website.
As the owner and custodian of the 3,500 acre Cairngorm Estate that includes the ski area and wider mountain resort, HIE has responded with the following statement:
"We were pleased to support the Committee in their scrutiny of the Cairngorm funicular railway and welcome this detailed report. Key conclusions from the Committee include recommendations to simplify governance structures for running the funicular and improve the availability of information, and we will reflect and act on both of these points.
"Along with our colleagues in operating company Cairngorm Mountain (Scotland) Ltd, which is a subsidiary of HIE, we are working hard to overcome the challenges of recent years and establish Cairngorm once again as one of Scotland's must-visit attractions for families, nature lovers and snowsports visitors.
"The resort has enjoyed a huge surge of popularity since the funicular returned to service, attracting 122,000 foot passengers since April 2025, plus a further 28,000 skiers taking advantage of the excellent snow conditions this winter.
"We are always conscious of the need to obtain value for money in all our projects across the Highlands and Islands. As a publicly-owned asset for Scotland, Cairngorm is no exception.
"With the funicular back, strong leadership and management in place through the operating company and strategic guidance set out in the Cairngorm Masterplan, we believe the resort is now in a great position to achieve its full potential.
"The challenge is to make the current winter season the start of a new and successful chapter that will see Cairngorm affirm its place as a strong contributor to the economy of Strathspey and Badenoch and the wider Scottish tourism sector."
From the report
Given the history of the funicular, it is helpful to have an awareness of the timeline of events, particularly on its ownership and operation. These are set out in the following paragraphs.
In 2001, the funicular was built at a cost of £19.5m. Cairngorm Mountain Ltd (CML) assumed operation of the ski resort and funicular under a lease agreement with HIE. CML would go on to repeatedly report financial losses.
HIE took CML into public ownership in 2008. This decision was taken to keep the resort open, protect HIE’s investment in the resort, and maintain wider economic benefits for the area.
Six years later in 2014, CML agreed a new 25-year lease for the resort with HIE. HIE transferred ownership of CML to Natural Assets Investments Limited (NAIL). This returned management of the resort to the private sector. NAIL offered financial guarantees to protect HIE’s exposure to potential future losses from CML.
The funicular railway was closed in September 2018 after a routine inspection by engineers found safety concerns. HIE acquired the assets of CML and subsequently placed CML into administration. HIE considered that the suspension of the funicular, with a consequent downturn in business, was a key factor in this decision.
In December 2018, the assets and staff of CML were transferred to a new company, Cairngorm Mountain (Scotland) Ltd (CMSL). This is a subsidiary of HIE. This was the second time in a decade that HIE had to step in to save the Cairngorm Mountain resort following financial difficulties.
From October 2018 to January 2023, the funicular was closed due to structural concerns in the viaduct.
HIE decided to repair the funicular. The full business case for this was published in 2021 after the decision was taken in 2020.
Additionally, during this time, HIE was engaged in two relevant legal proceedings. One was in relation to financial guarantees provided by NAIL when CML was transferred to NAIL in 2014. The other was in relation to design and build aspects of the original funicular railway. HIE sued construction company Galliford Try Infrastructure Ltd and designer AF Cruden Associates Ltd over work done in the 1990s and early 2000s.
In August 2023, HIE settled these legal cases out of court and received an £11 million legal settlement.
The funicular was closed again from August 2023 to February 2025. This was because of structural failure.
The funicular also closed for 3 weeks in May 2025 for planned maintenance and remedial work.
Whilst we acknowledge that HIE has made progress in relation to its engagement with local stakeholders, we also note there is a sense of frustration amongst some stakeholders around the level of information available to take a judgement on HIE’s decision-making for the future of the funicular. The Committee therefore considers there is significant room for improvement, particularly in view of the highly redacted board minutes. HIE should ensure it is sharing information about the funicular proactively and in a timely manner on its website, so the public has less need to rely on Freedom of Information requests. This would lead to greater accountability on the use of public money.
Worryingly
Given the reliance on public sector funding and the funicular’s history of structural issues, the Committee has some concerns that the costs of regular monitoring and maintenance may become disproportionate to its benefit over the projected 30-year lifespan of the funicular railway.