Government and district councils to finance Whakapapa gondola

Friday, 15 June 2018

The governments’ provincial growth fund is lending RAL ski company $10m towards its $25m luxury gondola project

A 'luxury' gondola on Mt Ruapehu is closer to getting off the ground after the Government announced it would loan $10 million for the project.

The $25m gondola on Whakapapa Skifield will feature 50 cabins with floor-to-ceiling glass, leather seats, WIFI and ski-racks. Each cabin will accommodate 10 passengers on the 1.8 kilometre trip, with views of waterfalls along the way. It is expected to be finished in June next year.

Regional Economic Development minister Shane Jones said the Government's confidence in loaning to Ruapehu Alpine Lifts Ltd's [RAL] project was boosted by the support local iwi and local government were agreeing to give.

The luxury gondola proposed for Whakapa Skifield on Mt Ruapehu will operate in summer and may take visitors up to the skifield's restaurant until 10pm at night.

The mayors of Taupō District Council [TDC] and Ruapehu District Council each confirmed they are providing loans of $1m and $500k, respectively, to RAL for the project.

**READ MORE:

Ruapehu District Council Mayor Don Cameron, Regional Economic Development Minister Shane Jones and Ruapehu DC chief executive Clive Manley at Ohakune's Powderhorn Chateau.

* High speed gondola planned for skifield**

* **Taupo eyes ski destination title

The 1.2 kilometre luxury gondola proposed for Whakapapa Skifield on Mt Ruapehu will rise 400 metres and finish at the skifield's restaurant.

* Gondola part of $100m Mount Ruapehu plan**

'The $10m loan to Ruapehu Alpine Lifts limited, which I am now formally announcing, plugs a gap in the development aspirations of your rohe, but also, ensures we've got the right capital mix between central government, a private enterprise, and local investment,' Jones said.

Beginner skiiers prepare for a ski lesson on the first day of the 2018 season, June 1, on Whakapapa Skifield.

'This is the first time a government has done anything of this nature in many, many years.

'There are risks when a government decides to put your taxpayers' money, my taxpayer's money, into these ventures, but our government – and I've been empowered to go out and lead these initiatives – is up for those challenges.

Taupo District Council Mayor David Trewavas, RAL board of director's Murray Gribben and RAL chief executive Ross Copland at Ohakune's Powderhorn Chateau.

'Without our involvement, I was told, it would be long and dreary journey before an initiative could come into being.'

TDC Mayor David Trewavas said the investment was seen as prudent given the economic return the district was likely to receive.

A snowboarder carves up some snow at Whakapapa Skifield on the first day of the 2018 season on June 1.

'This will be an absolute game changer for tourism in the Central North Island and with the expected increase in visitor numbers, we are expecting our district to do very well, particularly Turangi,' he said.

'We expect more employment opportunities will be created and it will further cement our position as a viable alternative to Queenstown not only for snow and skiing during the winter months but now with extended sightseeing opportunities, year round,' he said.

RAL chief executive Ross Copland said the gondola would attract 300,000 extra visitors and $50m in additional spending by visitors per annum.

'This translates into more people booking accommodation, eating at local restaurants and experiencing local activities, creating employment and lifting household incomes.'

More than 120 jobs would be created to build the gondola, and an additional 137 full-time jobs in the restaurant, maintenance, sales, retail and transport teams would be created too, he said.

The Government's $10m wasn't the last piece of the project's funding puzzle, however, Copland said.

'It's the first piece of the puzzle. Until you've got that anchor funding secured, it's quite hard for other investors come on board.

'Having Crown investment is a sign that, with the due diligence the Crown have done, it's obviously a great investment not only for the region, but also for them as investors. And that will allow us to finalise those investment agreements in the next few weeks.'

Copland said RAL was already $25m and three years into its $100m 10-year development plan, and it was progressing well.

'Every year for the last four years we've built a new chairlift or T-bar. This summer we've done the Far West T-Bar at Whakapapa. Next year we'll do the gondola, then we'll come around and look at Turoa.'

Ruapehu District Council chief executive Don Cameron said that following many meetings with RAL, the council had decided the gondola project was worth supporting.

'So we put meat in the game, in the form of a $500k loan to them, which is a small investment, in the scale of things.

'But it was really important for the Government to see that we supported this project and thought it important enough to put skin in the game,' Manley said.

'It's paid back, so it's not a draw on the ratepayers. But it's a really important, strong statement, that we're making, that we're supporting economic development in our region to support jobs and improve it for everyone.'

Mayor Don Cameron said the district council's $500,000 loan to RAL was 'something the council 'had to think about long and hard'.

'Because it's not our normal business. But on the other hand, if we could get it across the line, everyone could see it as a game-changer.'

Cameron said working with Taupō District Council had been productive.

'At the end of the day, the visiting skiers don't know or care what district they're in. The important thing is we got this development underway.'

TDC's investment comes from its TEL fund, which has a diverse investment portfolio that includes shares, property, bank deposits and bonds, Trewavas said.

There will be no impact on rates, Trewavas said.