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  • rmacculloch

A Solution to the Ruapehu Alpine Lifts (in Liquidation) Quagmire

The government can't decide what to do about the bankrupt Ruapehu ski-lift outfit, Ruapehu Alpine Lifts (RAL). Meanwhile Leader of Opposition Luxon messed up the answer - he said to Mike Hosking on Newstalk ZB, "That has to be solved by commercial interests". Wrong. Luxon better sharpen up on public policy matters, fast. He's no longer a CEO. By the way, Air NZ of which he was once CEO, has never been commercially viable - it bankrupted in 2001 & was bailed with a billion bucks of public money - then took another billion dollar "relief" package (on top of the wage subsidy of almost $200 million) when it bankrupted again during Covid. So what is the way out of the quagmire?

1. First & foremost, a cost-benefit analysis should be conducted to ascertain whether the total benefit to NZ of keeping the Ruapehu lifts running exceeds the costs. If it does not, then they should be closed. However if the total benefits, including things like promoting sports education & ski training for children going to schools & growing up around Ruapehu in towns like Turangi, Ohakune & Taupo, not to mention keeping one of our iconic and most spectacular mountains open for the public to fully enjoy, do exceed the costs, then the ski-fields should be kept running.

2. Should such benefits (not simply the ones to a commercial operator) outweigh the costs, nationalization of the ski-lifts would become the solution. RAL should then become a fully state-owned corporation. Selling off RAL to private operators after so much public money has already been ploughed into it and propping up a new private owner with on-going subsidies is bonkers and out of the question.

3. Publicly owned & operated national tourist treasures are common throughout the world, including ski-fields. There are even publicly owned and operated ski-fields in the US. SkiTalk reports, "In New York there are three state owned ski areas, Whiteface in Lake Placid, Gore and Belleayre, all are currently being run by the ORDA or Olympic Regional Development Authority". (Lake Placid was the site of the 1980 Winter Olympics).

4. I'm not a fan of public ownership for a huge range of goods & services, but in the case of helping open up a natural wonder that ranks amongst the most important in our country for Kiwi youngsters to achieve immeasurable happiness in terms of learning snow activities as they grow up, then if those kinds of benefits exceed the costs of keeping the lifts running, they should be kept open and run by the State.

There is no case for selling RAL to new private operators - it has already been proven to be commercially non-viable. Luxon is wrong to say the matter can be "solved" that way. For a man about to be PM, he better read up on Cost Benefit Analysis to see how there are many examples when a nation can benefit from State investment, not least of all in parks and often sporting facilities, when the total social (not just private) benefits exceed the costs.


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