The prospect of winter-sports returning to the Slovenian side of Mount Kanin has this week moved a step closer, with a transfer of the cableway and Presteljenik restaurant to the Bovec municipality seemingly set to be rubber-stamped by creditors.
In an unusual move facilitated by a little known law allowing assets that are all but impossible to dispose of or, their disposal incurring unreasonable costs, Bovec’s municipality will in effect secure control of the ailing lift-infrastructure that previously serviced Kanin and the iconic restaurant atop its summit, free of charge. Having suffered serious damage during 2014 the cableway didn’t see any investment from creditors to limit any potential damage from the elements. Coupled with the whole lift-system being deemed uninsurable by domestic and foreign indemnity brokers the choices regarding the lift’s future had significantly narrowed. It is a given that creditors such as HIT will officially ratify the transfer of assets to Bovec’s municipality, recognising that all realistic avenues of achieving a cash sale have now been exhausted.
Whilst there is never such a thing as a free lunch, especially at the Presteljenik restaurant, the municipality of Bovec as part of the agreement to transfer assets into their name will have to immediately inject €50,000 liquidity into presumably the renovation of the lift-system, a figure I feel to be somewhat on the conservative side, especially once the full extent of the damage has been realised. Costs totaling €112,000 since the suspension of activities in 2013 will also have to met by Bovec’s municipality.
Municipalities throughout Slovenia are strapped for cash, mirroring the national mood that currently sees the country embroiled in a desperate rush to offload 15 state-companies into private hands. It is with this in mind that piques my scepticism over whether Bovec’s municipality will be able to retain control of the cableway and restaurant on a long-term basis, the attendant costs of ongoing maintenance, lift upgrades and a business plan mitigating the risks of potentially poor winter seasons all costing serious money. Is this then, as has been seen elsewhere in Slovenia, a stop-gap measure to afford the resort some breathing space, bring the slopes back into operation and eventually, seek a sale back into the private sector? This might not be possible, for several reasons. Firstly, it is entirely possible that creditors such as HIT, who, after all, through their altruism are losing out financially by Bovec’ municipality acquiring the assets gratis, will seek to insert a clause in any binding agreement over the transfer of assets that Bovec cannot ‘flip’ the lift-system and restaurant for a quick profit, unless preferential creditors get part of any profit made from it through any sell-on into the private sector. Secondly, for the best part of the last two years auctions and Dutch auctions have failed to find a buyer willing to meet the asking price, realising the purchase price would only be the financial start for what could and presumably will end up being an expensive renovation project. Would the renovated lift-infrastructure become a more attractive proposition to future buyers? Maybe, but only in my opinion if the faulty Poma lift has been replaced, rather than fixed. After all, it is hard to ‘fix’ a lift that nobody can come to a consensus over why several of its carriages crashed to the ground, official reports struggling to apportion blame on human or mechanical error, with a freak but destructively brief spell of high winds thought to have brought the thankfully empty cableway carriages hurtling to earth. The Environmental Agency in Slovenia can though find no hard data to support this hypothesis.
Thirdly, much in the same way in England that an asset can officially be classed as a Community Asset, attaching caveats to any resale and cosmetic and commercial change, the people of Bovec who so rely upon a fully functioning lift-system for the ongoing viability of their business interests may wish to see the municipality retain possession of the lift, if not particularly the restaurant, ensuring an element of publicly-backed security that cannot be guaranteed by the private-sector. With such an eventuality the ongoing costs to the local administration will be considerable but should be weighted against the the not insignificant revenue streams that will once again flood into the area, the only one that can provide high-altitude skiing in Slovenia. When other resorts are closed due to insufficient snow-depths or have drawn a veil over the season Bovec can pick up the slack, there being no other reason than mechanical failure why it shouldn’t once again be a thriving ski resort.
Consumer confidence is though a large factor in its future. To reiterate I for one do not believe a €50,000 investment is sufficient to bring a lift-system back into operation, especially when it has been out of action for two years and in the manner which its operation ceased. If wind did bring the carriages down, something a modern-day lift should be able to withstand, albeit whilst sitting idle, the whole infrastructure should be replaced. This will then incur far greater costs to the local municipality, becoming a potential millstone. At a time when the incumbent Slovenian administration is seeking to shrink the state, can it be realistic for it to do so locally as well as nationally? Surely recognising the importance to economies throughout the country, is there an argument for state intervention, to keep its ski resorts functioning? This may though become a financial hot-potato the Slovenian government wishes to avoid, not wanting to contradict their national stance and surely realising there are too many ski resorts in Slovenia, most at altitudes that cannot by right expect to get sufficient levels of snow year in year out, especially with the onset of climate change being very real and noticeable in Slovenia. Should then only the more snow-sure resorts as Bovec and Vogel above Bohinj be given extra financial help to enable the fittest to survive, in effect sounding the death knell for smaller, lower lying pistes? Arguments for both interventionist and laissez-faire approaches can plausibly be debated but the importance of the winter-sports industry is too great for central government to stand idly by. The future of winter-sports in Slovenia remains uncertain, where positive news is cautiously welcomed but with a very real impression that the next serious problem is only just around the corner.
Further reading on this subject can be found at: RTV Slovenia: Bovec to take control of Kanin cableway