Ministers agree loan to private investors to save Ruapehu ski field

Infrastructure

There’s concern at a Cabinet decision, in the shadow of election, to increase its lending to $50m and set up ski field for private ownership

Two businessmen have welcomed a Government green light for them to take over Turoa ski field.

Speaking from Singapore in a gap between business meetings, Pure Tūroa director Greg Hickman tells Newsroom his team are delighted for the Ruapehu communities that depend on a vibrant winter tourism industry.

But it’s a deal that has bitterly divided the Ruapehu district community and iwi; the local mayor says some locals will never forgive him after he used his casting vote to support the deal.

And Hickman acknowledges the $3.05m MBIE loan for his company, signed off by ministers yesterday, requires the Department of Conservation to issue a concession to operate commercially in one of New Zealand’s most treasured national parks. “Settlement is conditional on a DoC Concession being assigned, likely early next year, and assuming no major opposition,” he says.

READ MORE:* Iwi ‘aghast’ at Cabinet decision on privatising Ruapehu ski field* Government offers taxpayer millions for Ruapehu buyers* The Detail podcast: Life under the shadow of Ruapehu Alpine Lifts

“No major opposition” is a big assumption. Already this week, National leader Christopher Luxon has said he wouldn’t give Ruapehu ski field operators any more money: “At some point they’ve got to run it on commercial terms,” he told Newstalk ZB.

“I’ve been very supportive of actually giving them some help in this current season, because I actually think it’s a critical tourism asset for New Zealand, but ultimately that has to be solved by commercial interests.”

And Newsroom has obtained a copy of a letter to MBIE, sent on behalf of iwi leaders alarmed at learning at short notice of plans to split apart Whakapapa and Tūroa fields, and hand over the right to operate the Tūroa to a private company.

“It’s split the community, particularly those who are leading the charge in terms of the lifetime pass holders. And they quite frankly hate my guts.”– Weston Kirton, mayor

That haste is despite long Government delays on settling the Tongariro National Park Treaty settlement.

The letter is from Kura Te Wanikau Tāhana Tūroa, a descendant of the chief after whom the ski field is named, and is on behalf of the iwi Patūtokōtokō.

He says Patūtokōtokō and other iwi and hapu are unified by the belief that any proposed solutions must primarily uphold all the historic settlement agreements of local iwi, and not prejudice their settlement negotiations related to the Tongariro National Park.

“We require additional time,” Kura Tūroa writes. “The Crown’s process to address these matters alongside our tribe has shown an inability to work effectively in a way that upholds Te Tiriti o Waitangi. Throughout this process we have experienced a significant lack of information and time from the Crown.”

The Ruapehu Skifields Stakeholders Association, too, says the Cabinet Manual prohibits a government making major and irreversible decisions in the final days before an election.

Speaking to media, ministers Grant Robertson and Kieran McAnulty insisted they hadn’t tied the hands of any future government – that their decisions were just interim ones, to see the ski fields through summer.

“We’ve chosen an option that allows things to roll over for a few months now, to give everyone confidence,” says McAnulty. “Because we’ve got the local councils, local iwi, all the businesses, the stakeholders – we’ve had a really successful ski season, and we didn’t want to uncertainty in a political period going over an election.”

Grant Robertson adds: “This is a very important part of the economy of the central North Island. We want to make sure that we do leave the possibilities for how it can operate open, but you’ll appreciate we’re two weeks out from an election. In terms of the amount of room that gives the current Government, we think the appropriate and pragmatic decision is to roll things forward several months and then take another look.”

The proposed deal was revealed by Newsroom on Monday morning, ahead of the Cabinet meeting. McAnulty, the regional development minister, confirmed on Monday evening that ministers had agreed to it – entailing further loans of $7.35 million to allow the continued operation of the ski field until March 2024.

“This fund will help cover critical maintenance undertaken during the summer and provide additional certainty for the community,” he said.

“There is a need to allow time for further dialogue with stakeholders, iwi and hapū to understand their aspirations for the ski field. This was the appropriate decision made considering we have an election in less than two weeks.” 

Ruapehu Alpine Lifts, the existing not-for-profit company set up by ski clubs with a Conservation Department concession to operate in the national park, has been described by PwC liquidators as “hopelessly insolvent”.

But McAnulty and liquidator John Fisk both dismiss officials’ concerns about the liquidators embarking on a fire sale of the $53m worth of assets.

Fisk confirms the Government has agreed to bail it out of liquidation, and to allow it to continue trading in receivership instead. It’s expected this would entail MBIE’s regional development unit Kānoa buying Ruapehu Alpine Lifts’ bank debt – $15.2m in loans from ANZ – off the liquidators, for the grand sum of $1.

That, combined with the new $3m loan to Pure Tūroa, and $4.3m that Cabinet agreed to loan the liquidators yesterday, will nearly double the taxpayer funds locked up in ski field loans and investments.

Alongside a bond-holding in the SkyWaka gondola on Whakapapa, and emergency loans to the voluntary administrators and then the liquidators, it takes the total Crown lending to Ruapehu Alpine Lifts and Pure Tūroa to $50.5 million.

Fisk says they’ve already committed to paying German manufacturer Doppelmayr Group more than $5 million to refurbish Tūroa’s Movenpick and Park Lane ski lifts, and much more money will be required for maintenance and about 70 salaries over summer.

Bailing out the troubled Ruapehu Alpine Lifts from liquidation would ultimately mean replacing liquidators PwC, who officials have described as “too expensive”. MBIE would likely replace them with Calibre Partners, as receivers.

Pure Tūroa is a company set up by Ohakune brewery owner and tourism operators Greg and Christine Hickman, backed by the money of Taupō-based Cam Robertson.

Hickman says the loan’s approval identifies a way forward for the ski field and community. 

“This marks an important step in securing the future of Tūroa, creating certainty for surrounding communities and for people who are passionate about the great outdoors,” he says.

“While any decisions remain conditional on further negotiations over the coming months, we will continue to work alongside DoC and iwi partners.”

He says Pure Tūroa has been “putting in the mahi behind the scenes” for more than nine months to deliver the first stage of an agreement that would see a structured financial arrangement, matched dollar for dollar by Pure Tūroa.

“The concession to continue operating in a national park will be the next major milestone as we look toward the 2024 winter season,” Hickman says.

“This is a long term commitment from the Pure Tūroa team. We are passionate locals and snow sports enthusiasts – focused on the future of the Tūroa skifield and the communities that are the lifeblood of the North Island’s Central Plateau.”

But the Ruapehu District is divided between those who support the Pure Tūroa takeover, those seeking greater iwi involvement, and those backing the Stakeholders’ Association’s bid.

The association’s proposal would give lifetime pass holders shares in the ownership of a new operating company; the Pure Tūroa deal, by contrast, would cancel their lifetime passes.

Ruapehu District Council is an unsecured creditor; it’s owed $500,000 that it may or may not ever see again.

Mayor Weston Kirton says he’d like to see that money repaid, and both the liquidators and Pure Tūroa have said they’ll repay it. But far more important is getting the ski field back operating through summer and into next winter’s snow season, for the hundreds of jobs and estimated $100m it contributes to the local economy.

The $500,000 loan did give the council a seat at the table in deciding which bids to progress – and Kirton used his casting vote to back Pure Tūroa.

“It’s certainly split the council,” he says. “It’s split the community, particularly those who are leading the charge in terms of the lifetime pass holders. And they quite frankly hate my guts, but that’s where it is.”