The top bidder to take over Whakapapa ski field who pulled out of the deal is still confident the ski field could be a commercial success.
The government has agreed to give Ruapehu Alpine Lifts (RAL), which is in voluntary administration, another $7 million to keep it open for the 2024 season.
RAL which previously operated both the Whakapapa and Turoa fields on Mount Ruapehu, has already had more than $20m in tax payer bailouts.
A deal with a new operator for the Turoa side of the mountain is imminent, but there seems to be no viable options for Whakapapa.
Whakapapa Holdings, led by Dave Mazey, tried to buy the Whakapapa ski field, but withdrew because of concern over its viability.
Mazey said the difficulty with Whakapapa was that any new owner would have to take on a large debt associated with the construction of the Sky Waka Gondola in 2018-19.
"Some of the financing for the gondola to the tune of about $14m was provided through a bond or bonds that were taken up primarily by iwi groups, but other investment funds based in the central North Island and there's a loan in there from Ruapehu District Council and they need to be honoured and they're secured over the gondola itself, not secured over the overall company."
Anyone wanting to buy Whakapapa would need a concession or licence to be able to operate on the mountain and Mazey said the current offer of concession was restricted to a 10-year term with the Conservation Act allowing a maximum available term of 60-years.
"But we agreed to that in principle and it's a recognition of the Tongariro National Park claim which is being negotiated and considered with the Crown by five different iwi groups and the outcome that will be a key determinant of what is the long-term future for Whakapapa and Turoa that is acceptable."
A 10-year concession would mean there was no opportunity to make long-term investments, but on the plus side it would allow the owner to work through with iwi groups and communities what were the long-term viable opportunities to support recreational facilities on Ruapehu, he said.
Mazey said he believed that there had to be another investor or investment form available to take on the business, but it was not straightforward.
Skiers and snowboarders at Whakapapa skifield on Mt Ruapehu. Photo: Unsplash / Matthew Buchanan
"The complexity and the volatility of this business, the risks that are associated with it has not been an attractive proposition to any investors at all as we've seen by those that put their hand up when RAL was looking for an equity injection pre-2022 and then when primarily the Crown but the receivers and the administrators have been looking for investors in the past 18 months.
"It's a risky business," he said.
Mazey said he would talk with potential investors, answer queries, provide advice and support as necessary.
Mazey remained optimistic that Ruapehu ski field could be a good business again.
"For 70 years Whakapapa traded positively and I believe that opportunity is still there."
In the 30 years that he was involved in RAL, Mazey said they went through a number of issues such as volcanic eruptions, no snow years and massive fires.
"We went through a range of natural circumstances that significantly diminished revenue streams in any one year - but we made it. And I think it's viable again and that's why I'll err on the positive side."
