Slovenian frontier resort Bovec is to receive over €5.7 million of state aid from the country’s incumbent administration, channeled through its Ministry of Economic Development and Technology and nearly twice the amount originally suggested. Whilst this isn’t a financial incentive designed to benefit the whole town, what amounts in effect to project-specific funding will provide beneficial knock-on effects for the immediate area and beyond, such is the importance of winter-sports to Slovenia’s northwest, specifically in the only area countrywide that can offer high-altitude skiing.
Formally tasked with rebooting Bovec’s ailing Kanin cableway that hitherto serviced the eponymous mountain straddling the Slovene-Italian border, the marked increase in the amount of confirmed funding as opposed to rumoured figures publicised in the local media and indeed, on this very blog, suggests the task to bring the lift back into operation is a far larger undertaking than previously thought. The sensible option of completely replacing a physically and metaphorically tarnished cableway with a new, modern device could account for the spike in funding, the realization that Bovec’s Municipality couldn’t justify renovating an existing lift-system that forever undermined public confidence once it deposited several empty carriages to earth, being uppermost in the minds of town hall decision makers once a full costing appraisal had been concluded.
A little known Slovenian statute allowed the local Municipality to assume control of the existing cableway device and Prestreljenik mountaintop restaurant after a succession of auctions failed to realise the assets of former(and now defunct) operator ATC Kanin. Once the consent of creditors was acquired for ownership of the previously privately controlled assets to pass into public ownership Bovec in effect inherited the infrastructure vital to the town’s future free of charge, although a surety of €170,000 was lodged to cover costs associated with the receivership of ATC Kanin and the formal transfer of assets process.
Backing that amounts to state aid isn’t however without controversy. At a time when many of Slovenia’s ski resorts face uncertain futures and suffer from inconsistent levels of snowfall commensurate with their modest altitudes, the munificence afforded Bovec – a resort that whilst not being able to guarantee adequate snow cover any more than the likes of St. Anton or Obergurgl is the one location in Slovenia that comes close to being able to do so – does potentially place it at an unfair advantage when pitched against its local competitors. Is Bovec a special case? It certainly has become a regional and national embarrassment since the cessation of snow sports on its Kanin slopes, subsequently hemorrhaging money and custom to Sella Nevea, the resort situated on Kanin’s Italian side. Collateral damage has also been significant, with many hotels suffering from a subsequent lack of patronage and in the Hotel Kanin’s case, has lain empty until its recent acquisition by the Russian owner of Ljubljana’s Hotel Cubo, a purchase surely predicated on the long overdue upturn in fortunes now seemingly resurgent within Bovec. The money brought in by a fully functioning cableway will justify the outlay but it is assumed many conditions are attached to the deal, with Bovec’s Municipality presumably expected to contribute significantly to the renovation of the cableway and pylons, several which have suffered from neglect and ironically, the vicissitudes of the capricious alpine weather that dumped large amounts of snow agonisingly out of reach to winter-sports enthusiasts. Should the local authority’s contribution merely amount to the relatively modest €170,000 already committed to the aforementioned legal and liquidation costs, the danger of being labelled unable to operate its own infrastructure without a state-approved crutch becomes very real. The long-term prospect of Bovec divesting itself of the cableway device and associated assets to a private company remains an option but having previously experienced the collapse of ATC Kanin that resulted in the municipality standing helplessly on the sidelines whilst the town’s greatest asset deteriorated in front of its eyes, it will be reluctant to tempt fate of lightning striking twice. A compromise solution could allow for the formation of a standalone publically-owned company to operate at arm’s length from the municipality, albeit with the town’s mayor occupying a place in the management structure.
Since the collapse of the former Yugoslavia, in part precipitated by Slovenia seceding from the failing federation, much of the country’s tourism infrastructure was denationalised to private companies assumed to have deeper pockets and the ability to diversify and grow businesses that had stagnated under public ownership. Slovenia has since found to its cost that even high profile tourism assets fail when controlled by those motivated by greed that profusely manifests itself once holdings are mercilessly sweated in tandem with little or no routine, inward investment. It is unrealistic to expect a return to blanket public ownership through a process of renationalisation but if the cases of Bovec and in particular Bohinj are anything to go by, where a large percentage of its tourist bed space presently resides within hotels(Bellevue and Zlatorog) that are nearing complete dereliction and, the Hotel Bohinj whose future looks uncertain as part Zmago Pacnik’s portfolio which includes all three properties, then a mixture of local level state ownership and competent private operators is surely the way forward to ensure a viable future for Slovenia’s tourism sector.
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