Golf Union writes off Drumoig's £4m value

Mike Aitken, The Scotsman, 24 December 2002

The Scottish National Golf Centre at Drumoig, which cost £4 million to build, has been written down to a book value or just £100,000 in the latest accounts announced yesterday by the Scottish Golf Union.

According to directors of the SNGC, the reduction in value by £3.9 million of the loss-making facility is an accountancy exercise. However, there was an acknowledgment the move cannot help but underline the academy’s status in the eyes of the public as a white elephant.

Alistair Low, the chairman of Scottish Golf Ltd, admitted if the project was being undertaken today it would still go ahead but not be built at Drumoig near St Andrews.

During a press conference held near Edinburgh Airport, the SGU reported the £1 million debt run up by the centre had been paid off thanks to the £10 subscription paid by club golfers in 2002.

Even so, Drumoig still reported an operating loss in 2001-02 of £400,000, which forced significant changes in the running of the venture with the loss of six jobs in administration and the appointment of two new specialist coaches as well as a commercial manager.

The SGU and the SNGC hope the changes made during the summer will enable Drumoig to break even in 2003. As a consequence, Scottish golfers will pay £6 in their subscription next year instead of £10.

Mike Dickson, a director of SNGC, insisted the write-down in value of Drumoig was purely a paper procedure. “No-one would actually give us a firm value and the directors had to take a view. But I genuinely view this as an accountancy exercise. It’s not a cash issue and the centre would have been written down over the next 15 years anyway.”

Jim McArthur, the chairman of the centre, added: "The academy still has a lot of value to Scottish golf way beyond this sum of £100,000. Its intrinsic value is so much greater and that’s why we’re now investing more in the best coaches and equipment as well as looking at ways of attracting more people to use the facility. I would agree, though, the public may only see a £4 million centre being marked down to £100,000.

"The most important thing was to get the costs of the centre under control and we’re now happy with that aspect of things.” McArthur added.

“We’re currently looking for a new marketing manager and he or she will be crucial in encouraging more visitors.”

The SGU also revealed the introduction of the proposed centralised handicapping system had been scrapped because of a lack of funds. The project in partnership with Scotland On Line was originally expected to be a money earner for the union before sponsorship fell through.

"‘We decided not to proceed with the project on the basis originally envisaged although it maybe that alternative proposals will be considered at some point in the future,” said Hamish Grey, the chief executive of Scottish Golf.

On the golfing side, Craig Watson has been re-appointed captain of the Scottish team for next year and will lead the side in defence of the European team championship.

Alistair Low was also optimistic Scotland will continue to produce top class young players even if the current perception suffered by comparison with England “You can be thin on the ground one year and spoiled for choice the next,” he argued.

Climate changes in Scotland, with increasingly wet weather making it difficult for inland courses to provide golf to members on a consistent basis, have also prompted the union to hold seminars on how to cope with a changing environment.