Battle for Turoa slopes not yet over

By PAULA OLIVER

It came as a big surprise to the people of Ohakune, who had steeled themselves for yet another defeat.

Five years of bad luck, volcanic eruptions and light snowfalls had forced nearby Turoa skifield into receivership and left many local businesses clinging on by their fingertips.

The ski-dependent town was angry and was directing most of its fury at former Turoa owner Sir Andrew Grimwade.

So the residents threw their weight, in writing, behind a familiar face - Whakapapa skifield operator Ruapehu Alpine Lifts, which wanted to buy the Turoa field.

To townsfolk, it was a lifeline. But to outsiders, it created a dangerous monopoly on the mountain.

The only opinion that really mattered was that of the Commerce Commission, which approved the sale just weeks after initially saying it was unfair.

Ohakune resident Paul Ashcroft modestly admits there was a lot of excitement around the district.

Two distinct factions emerged during the battle for Turoa, and rumours persist that the fight may not yet be over.

On one side is Ruapehu Alpine Lifts, which claims it is now able to open up the mountain and offer a two-in-one pass that gives skiers access to both fields on any day.

It also says a traverse will be built between the two fields, and hired gear will be able to be taken all over the mountain. A joint international marketing effort will bring in more visitors.

"There really are only winners," says Ruapehu marketing manager Mike Smith.

In the opposite corner are those who say Ruapehu's buyout will push prices up and quality down - standard accusations fired at a monopoly.

Some members of this camp made rival bids for the skifield, and are understood to be bitter that they lost. Any benefits that Ruapehu claims will come, they say, would also have been possible had any of them taken over the field.

Appeals to the High Court are being discussed behind closed doors.

Whatever the outcome, the new owners of Turoa face a big challenge.

PricewaterhouseCoopers receiver Gary Traveller, who steered the field through a better season this year despite having no skifield experience, says Turoa's facilities are run down.

He told the commission some big, difficult decisions would have to be made, and much more investment was needed.

Others who have looked around the field estimate that at least $1 million is needed to get it up to scratch. Ruapehu says this is speculation and it is yet to determine the full cost.

Many Ohakune locals blame Australian-based Sir Andrew and the other former owners, the Moore family, for the field's slide. Anecdotes of rusted toilets and decrepit facilities abound, and they argue that any profit squeezed from the venture went straight back to Australia instead of being reinvested.

"There's no love lost for Sir Andrew in Ohakune," said one observer. "They believed it was possible that Grimwade could have reappeared, and that was enough to scare the hell out of them."

But Roy Giddens, who made a rival bid for Turoa, says Sir Andrew poured millions into the field. He also offered to put up some assets to help finance Mr Giddens' shot at buying Turoa.

Even those operating on the opposite side from Sir Andrew describe the ill-feeling as "awful."

Mr Smith says his group's unique structure allows it to reinvest more in the field.

When it was first registered in 1953, Ruapehu Alpine Lifts was a ski club for enthusiasts and consequently earned tax-free status that continues today. It is owned by 4500 skiing shareholders, and 45 per cent is controlled by a trust, which demands that all financial surpluses be put back into the betterment of snowsports. Trustees cannot sell any shares until a distribution date of 2058.

"Despite the fact we have shareholders, there is no benefit to being a shareholder," Mr Smith says. "They don't get dividends, and the value of their shares doesn't increase."

Ruapehu's offer of a $2495 life pass is planned to partly finance the required maintenance and the purchase of Turoa.

If all goes according to plan, up to $7.5 million could be raised by the offer, and the passes are reported to be selling like hotcakes.

Mr Smith won't reveal how much Ruapehu paid for Turoa, but indications are that it was the largest offer, more than the $6 million Turoa owed.

Rivals, who do not want to be named, argue that people were "seduced" by the idea that Ruapehu could reinvest every cent.

"It would be a lot easier for an operator with the structure they [Ruapehu] have got to rest on their laurels, and not have the forces of competition snapping at their heels," one says. "Is that a benefit?"

And they question how long Ruapehu will be allowed to retain its tax-free status, given the value of the assets it controls.

Another big cost for the new owners will be snow-making equipment - crucial to avoiding the recent vagaries of the weather. Turoa experiences such harsh conditions that Austrian ski lift manufacturer Doppelmayr is reported to use it as a test-site for its lifts. The theory is that if they work there, they will work anywhere.

Mr Smith says the capacity of the new snow-making equipment will need to be 1000 times that of Ruapehu's present gear. Like the traverse, it's a 2002 project.

Taking all the costs into account, Ruapehu has set its much-awaited lift pass price at $249 for an early season purchase. The day pass, at $54, remains the same as last year.

But howls of protest greeted the $249 offer, because it is seen as an increase on last year's $199.

But Ruapehu argues that it is a decrease, because it gives access to both fields, which would have previously cost $398. The catch is that if somebody has always skied at Whakapapa, and wants to continue to do so, he or she has no choice but to buy the $249 pass.

"The benefit from their point of view is that they do now have that choice," Mr Smith says.

As for the idea that the quality of services at Turoa will fall through a lack of competition, Ruapehu says it will not happen. If it did, it argues, skiers would go elsewhere.

But as the commission ruled, in the immediate North Island area there is nowhere else to go.

After months of deliberation, the commission decided there were more advantages to come from the purchase of Turoa than disadvantages. The company and most of Ohakune have had their celebrations, and are now working hard to make the combined fields a domestic and international success.

Mr Smith says: "We don't believe it's going to fail. We believe we've been through a period that's pretty much as bad as it gets, and we have no intention of it failing."