We have received permission to publish an open letter from Tūroa Alpine to MBIE expressing concern about the process for consideration of bidders to acquire the skifields on Mt Ruapehu. For clarity, there are a number of points made by Tūroa Alpine that the Stakeholders Association disagrees with (not least being the proposal to split the skifields), but this letter is published unedited and without comment as it is important that all stakeholders have a chance to robustly and transparently make their case.
Ministry of Business, Innovation and Employment
Ruapehu Alpine Lifts Limited (Administrators Appointed)
MBIE: Robert Pigou, Murray Beatson, Brendon Gibson, Martin Burrows. PwC: John Fisk, Richard Nacey, Chris Whiteside, Lukas Oberhofer.
From: Tūroa Alpine Limited, c/o Armillary Private Capital
Re: Ruapehu Alpine Lifts Limited – Robert Pigou call to John Sandford May 9th
In the call from Robert Pigou around 2pm on Tuesday May 9th, we were very pleased to be advised that Tūroa and Whakapapa operations were to be split. On the other hand, we were very disappointed to be advised that we were not the preferred bidder for Tūroa.
In response to a question of why we were not the preferred bidder for Tūroa, we were even more disappointed when Robert agreed that our offer was very good in terms of community engagement (social licence) *, but that there were concerns about financial aspects of our offer. When asked why we hadn’t been asked to address those concerns, we were told that there wasn’t time to do so. Robert also advised that although preferred bidders had been identified, a final decision had not been made.
Request for reconsideration
Having had time to reflect on the advice on Tuesday, we express concern about the process that appears to have been taken by Kānoa, relating to the Tūroa Alpine offer, and request further consideration of the offer for the following reasons,
1. Community Engagement (Social Licence)
At all times when considering the Tūroa Alpine offer, the following statement of position by the Department of Conservation (DoC), has been foremost in our minds,
"Tongariro is New Zealand's oldest national park and a dual World Heritage area. This status recognises the park's important Māori cultural and spiritual associations as well as its outstanding volcanic features."
Dept of Conservation (A comment repeated by Minister Henare the following day in Christchurch.)
When we were advised that Kānoa, the Regional Economic Development & Investment Unit within the Ministry of Business, Innovation and Employment, was involved in the process, this gave heart to the efforts of Tūroa Alpine because we understand the role of Kānoa being about the bigger picture and supporting economic development in regional New Zealand.
Our collaborative and integrated approach focused on environmental, social, cultural, and economic factors for Tūroa Alpine and its potential impact for good, particularly in the southern Ruapehu region. These factors included being the catalyst for other year- round, off-mountain activities providing more full-time jobs off-mountain and practices to mitigate the effects of climate change for Tūroa Alpine, all of which gained universal support.
We believe it is reasonable that we be able to answer any queries Kānoa may have with regards to the community engagement by Tūroa Alpine.
2. Public vs Private ownership
We are concerned that a private group may be awarded the right to operate the business at Tūroa* on Ruapehu, an iconic and unique place that is spiritually and culturally significant for māori and special to, and owned by, all the people of New Zealand.
The ability to own and operate Tūroa brings the opportunity, under the DoC licence, to operate the business for up to another 65 years and six months provided conditions are met.
Tūroa Alpine believes that, given the strategic importance of the business at Tūroa and the way its presence can be leveraged for the greater good of the wider community, ownership of the business of Tūroa should be available to many, especially people of the southern Ruapehu region and customers of Tūroa.
Tūroa Alpine initially engaged with the three other parties who had made themselves known, to see if a solution could be found to work together with a view to Tūroa Alpine being able to operate with wide ownership and an ability to focus on its key community, supplier, and customer demographic: people south of Ruapehu. None of the three other parties wished to work together with Tūroa Alpine because they,
believed that Tūroa and Whakapapa must be owned and operated as one and/or,
did not want a widespread group of shareholders and/or,
wanted to focus on the financial aspects of the offer whereas Tūroa Alpine considered that a strategic, all-of-region and stakeholders’ approach was as critical as financial considerations.
We believe it is reasonable that we be given the opportunity to discuss the matter of public vs private ownership in the context of a business operating in the alpine area of Tongariro National Park.
*The same logic applies to Whakapapa operations, but the Tūroa Alpine interest is in Tūroa alone
3. Financial Aspects
While we believe that Tūroa Alpine has extensive and deep regional support for its proposal, we accept we might not be able to bid in a way that a private entity might be able to.
Robert’s answer to the question of why Tūroa Alpine was not a preferred bidder for Tūroa was along the lines of Kānoa not having faith in the Tūroa Alpine ability to fund the purchase and the risk of Turoa Alpine being “back here again”. We took that to mean back at Kānoa looking for funding.
Tūroa Alpine believes that it has acted prudently and has taken a cautious and long-term view of the viability of the business at Tūroa, particularly considering the environment in which it would operate and responsibilities to DoC and iwi for removal and remediation at Tūroa. For these reasons, Tūroa Alpine plans to be fully equity funded with minimal or no debt.
We are prepared to provide a schedule of amounts foundation investors for Tūroa Alpine are prepared to invest. We will also detail the process for raising capital for the company. We are also happy to share details of the proposed board of independent directors which will be chaired by Gary Traveller.
A very cautious view has been taken by Tūroa Alpine regarding the possibility of more lifts for Tūroa. Keeping existing lifts operating with relatively minimal maintenance against commencing identified deferred maintenance might arguably be financially better in the short term. The view of Tūroa Alpine is that ensuring existing lifts operating optimally and reliably is the best option for the long term. There is also a strong case against the prospect of moving existing lifts higher.
We believe it is reasonable that we be able to be queried and respond on the financial approach taken by Tūroa Alpine
4. Lack of engagement / “not enough time”
Given the strategic importance of Tongariro National Park and Ruapehu for New Zealand and New Zealanders, and the significance of a 65-year licence, we believe it is reasonable for Tūroa Alpine to be engaged with, regarding any aspect of its offer, that requires further clarity.
While we accept that the assessment of offers may have been a fraught process given the challenges of other priorities for Kānoa, we believe that this is such an important issue, a decision needs to be made considering both realistic financial outcomes for RAL and in the interests of the social, cultural, environmental, and economic fabric of the southern Ruapehu region. We are available to meet at a place and time of Kānoa choosing.
Nāku noa, nā
John Sandford, Director, Tūroa Alpine Limited
You can download the full letter here:
Tūroa Alpine have also made their proposal public for review by the community: