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Highlands and Islands Enterprise said it had taken the decision to withdraw the Cairngorm funicular railway from service temporarily while a series of ‘snagging’ works are carried out.
A timescale for how long it is likely to be out of action has not been given.
HIE said nine days ago that it had received £11m after settling the court action.
It had been pursuing a £14.5m claim against the company that owns Morrisons Construction and the civil and structural engineers for the scheme.
The agency made claims over defects in the design and construction of the railway and breaches of contracts which emerged after the funicular was forced to shut five years ago.
READ MORE: Scot gov agency sues creators of shut Cairngorm railway for £14.5m
HIE had at one point included a provision of £14.3m for the cost of reinstating the funicular which had been expected to take two years.
News of the long-running case emerged in 2021 when it was revealed that ministers had to refund part of an EU grant for the original Cairngorm funicular because of discrepancies in the way it tendered for the work as costs spiralled.
As of the end of last year the cost to the taxpayer of funicular had soared to nearly £52m – with the costs of crucial repairs spiralling.
The cost of the repairs rose by 56% from £16.16m to £25m.
The faults were discovered after the costs of building the funicular spiralled from £14.8m to £26.75m.
Calls were made for public inquiry into the management of the Cairngorm funicular, which it was hoped would re-open in late 2022.
It finally came back into action in January after a four-year hiatus.
A 12-month snagging period and inspection programme has been ongoing since the funicular began carrying passengers again in January, following a two-year programme of works to strengthen the mile-long viaduct that supports the track.
HIE said snagging and inspection are usual practice for major civil engineering projects.
This week, inspectors identified that some of the ‘scarf joint assemblies’ that link the beams at the top of the piers did not meet the required tension.
At a board meeting today, Cairngorm Mountain (Scotland) Ltd (CMSL) agreed with the HIE decision to temporarily withdraw the funicular on the grounds of public safety.
Contractors are due to arrive on site within days to begin work using specialist tensioning equipment.
An HIE source said: “We’ll assess the situation once the contractors are on site next week and will be in a better position then to estimate the timescale. At this point, we believe the job can be carried out relatively quickly, but it would be unwise to speculate at this point.”
Susan Smith, CEO of CMSL, said: “We realise this will disappoint our customers but health and safety is always our number one priority and cannot be compromised.”
An HIE spokesperson said: “Everything will be done to return the railway to service as quickly as possible and we will issue updates as soon as the picture becomes clearer.”
The Cairngorms are a major Scottish tourism attraction and centre for recreation with downhill hillwalking and rock climbing a major draw for the 1.92m who visit the national park every year from around the world.
The crucial funicular, which was opened in 2001 and connects a base station with a restaurant and a ski area 1,097m (3,599ft) up Cairn Gorm mountain near Aviemore, was closed in September, 2018 due to structural issues.
The £14.5m claim was made against the now owners of Morrison Construction, Galliford Try Infrastructure Limited and Inverness-based AF Cruden Associates Limited, the civil and structural engineers for the scheme which had been taken over by Glasgow-based Arch Henderson.
The case was due to be dealt with in a proof hearing beginning this month.
But HIE confirmed that it has reached an out-of-court settlement for £11m – £3.5m less than the original claim.
The decisions over the contracts for the funicular were hit with allegations of cronyism and financial mismanagement that led to an investigation after chief executive of Highlands and Island Enterprise (HIE), Iain Robertson, announced in 2000 that he would be leaving to become director for corporate development for Morrison plc, an Edinburgh-based construction company founded and once chaired by one of Scotland’s wealthiest men Sir Fraser Morrison.
In five years HIE had awarded a number of Morrison contracts including that for the building of the controversial railway up Cairngorm which they eventually received more than £10m for.
Morrisons were awarded the funicular contract in 1999, a year after Sir Fraser left HIE.
Audit Scotland said there was no conflict of interest in either case.
The Herald previously revealed that having already pumped more than £10m in works to fix the funicular, ministers and officials were considering scrapping the project altogether.
A dossier of internal Scottish Government documents showed that business minister Ivan McKee ended up sanctioning continuing with the project as the “least worst option” while warning additional finance could not be guaranteed.
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