Ministers face new calls to push pause on the hasty sale of the North Island's ski fields to private investors, says mayor.
Creditors have been told the Department of Conservation may lodge a claim against the insolvent Ruapehu Alpine Lifts over an estimated $100 million cost to remove the buildings and ski lifts from the maunga if the company is unable to resume operating.
Karl Beckert, the department's operations support director, confirms its currently considering its claim for the watershed meeting of creditors, on June 20.
The effect of accepting this claim would be to make government a bigger creditor than the ANZ Bank, iwi, councils and life pass holders combined.
Ruapehu District mayor Weston Kirton says: "If they don't go ahead with this season and the Department of Conservation has to pull the whole place down, it could be up to $100 million. That was my understanding if it all falls to bits. That's the absolute last resort, and I think the whole country would be in an uproar if we actually had to go through that process."
Lodging a credit claim for that contingent liability would be a government impact-play giving it control over decisions on the ski fields' future. An administrator's report published this week identifies $37.6m owed to 38 priority or secured creditors, and another $44m owed to 15,043 unsecured creditors, most of whom are life pass holders.
READ MORE: * Hapū warn against selling ski fields without asking Māori * Ruapehu skiers to decide fate of mountain * Cabinet set to break up Ruapehu ski fields for sale * Give mountain a chance to recover, say Ruapehu iwi
But in a footnote, it says: "This excludes a potential contingent claim from the Department of Conservation for remediation costs they could claim pursuant to the licences, as no claim has been filed yet."
It comes after Newsroom revealed increased unhappiness among the 14,000 life pass holders, and iwi and hapū who are both kaitiaki of the mountain and bond holders over the Sky Waka gondola.
Their combined voting clout on the creditors committee was looking increasingly liable to derail government officials' plans to sell not-for-profit Ruapehu Alpine Lifts' assets (and debts) to two consortiums of private investors.
The Ruapehu/Whanganui hapū grouping Patutokotoko has written to the Prime Minister demanding officials consult with iwi before signing off new operators for the Whakapapa and Tūroa ski fields on June 20. "In the event this does not occur we are placing the Crown on notice that we will seek redress in the appropriate forum," they say.
And just this week, life pass holders have received letters placing individual values on their passes – at least $1000 even for the oldest skiers, and $2000-plus for younger skiers and boarders with more years ahead of them on the mountain.
"It makes a lot of sense, in my view, to allow some freedom to get through the season. We're bleeding as a community. My gut feeling is that it's in their best interest to do that with the current structure that we've got, and work through some of the issues over the next next 12 months." – Weston Kirton, Ruapehu mayor
That would put their combined claim at about $30 million – which means they would wield more voting power than the bank, councils or iwi.
But the Ministry of Business, Innovation and Employment was owed $15m at the time the administrators were appointed last year. Since then it's provided another $8m in loans through its regional investment arm Kānoa.
That $23m, if it's combined with a $100m claimed by the Department of Conservation, would hand greater influence to officials. "We had a creditor committee meeting on Friday and said there was a possibility they will file a claim, because they'd be entitled to," says administrator John Fisk, from PwC. "We haven't had any dialogue with them."
And those officials are pushing for a quick sale of the not-for-profit company's assets, acquired through years of fundraising. Their preferred bidders are private investors The South Island Office Ltd to take over Whakapapa, and Pure Tūroa to operate Tūroa.
That requires the Department of Conservation to issue concessions to the new companies authorising them to operate in Tongariro National Park, or if iwi won't agree to new concessions, to transfer over Ruapehu Alpine Lifts' existing concessions – which don't expire for about 20 more years.
A Cabinet paper says the Whakapapa concession expires in 2046 with rights of renewal of up to 30 years, and the Tūroa concession expires in 2042 with rights of renewal of up to 25 years.
Under the terms of the concessions, Ruapehu Alpine Lifts is responsible for removing all infrastructure from Tongariro National Park and remediating the land – what it calls a "make good clause".
The Department of Conservation could terminate the concessions, triggering the make good clause, if the lifts company no longer operates – but the administrators have warned the insolvent company doesn't have the funds to fulfil the make good clause.
If Ruapehu Alpine Lifts is unable to fulfil the make good clause, the liability to do so will fall to the Department of Conservation – and sources say that's why the department is seeking to be listed as a creditor.
"There will be a strong expectation from iwi and the public that redundant assets are removed from the National Park and the land remediated," ministers were told.
"We shouldn't have to go down that route of protecting ourselves through the dismantling of a physically good system and operations. It just seems to be a nonsense to actually be talking about an $80 to $100 million breakdown of the whole process." – Weston Kirton
Fisk has estimated that would cost $80 to $100 million, though Conservation officials were working on their own estimate of this cost.
"If a new entity takes over Ruapehu Alpine Lifts' operations, Department of Conservation would expect them to take over the liability for removing infrastructure and remediating the land," the Cabinet paper says. "In the event the new entity is not successful, this liability may fall to the Crown if the entity is unable to fulfil the clause."
The voluntary administrators – Fisk and Richard Nacey – had initially proposed to operate the ski fields this year, allowing time to confirm new operators and to negotiate concessions in time for 2024.
Instead, officials at Kānoa (working alongside lawyers Chapman Tripp and receivership experts Calibre Partners) have moved quickly to recommend new preferred operators to Cabinet in time for this year's season.
That's forced the liquidators to schedule a watershed meeting with creditors for June 20, the last possible date allowed by the High Court.
On or about that day, the administrators have told employees, they hope to hand the keys to the new owners, in time to switch on the ski lifts for the start of the winter season and the July school holidays.
Ruapehu District mayor Weston Kirton questions whether DoC can lodge a claim unless Ruapehu Alpine Lifts is liquidated and the concessions are terminated. Only then, he says, does it become liable for the costs of remediating the mountain.
But he says lifetime holders have been "flexing their muscles" and saying they might have the upper hand in terms of voting strength, at the watershed meeting – to the alarm of government officials. "So it doesn't surprise me that we're going through this process to try and alleviate some issues around the watershed meeting."
He is concerned MBIE is being too hasty, and that's his message to the Government. "That would be my personal view," Kirton says. "It makes a lot of sense, in my view, to allow some freedom to get through the season. We're bleeding as a community.
"My gut feeling is that it's in their best interest to do that with the current structure that we've got, and work through some of the issues over the next next 12 months."
He adds: "There are some issues that iwi haven't been engaged with the process, and Department of Conservation has been working hard to try to alleviate that – we knew that.
"If we can resolve these outstanding issues, we shouldn't have to go down that route of protecting ourselves through the dismantling of a physically good system and operations. It just seems to be a nonsense to actually be talking about an $80 to $100 million breakdown of the whole process.
"It's so important to have the ski field income come through our economy," Kirton says. "It's about 20 percent of our gross income, and a wide range of jobs, and associated contractors, all sorts of things. The money circulates and multiplies in our community, directly into our economy, so it's very significant."
