Row on Shetland over delays and overspend on creative arts and cinema complex

A FURIOUS row has erupted on Shetland between the islands’ main construction company and its arts agency over the delays and overspend on the Mareel - Lerwick’s new flagship creative arts and cinema complex.

• Opening of the Mareel arts centre was delayed for 18 months

• Shetland Arts were left facing a 10 per cent funding gap for the £12 million project

• The council has agreed £600,000 to enable the entire project to be complete

The opening of UK’s most northerly arts centre was delayed for 18 months. leaving Shetland Arts facing a 10 per cent funding gap for the £12 million landmark project on Lerwick’s waterfront.

Shetland Islands Council has now, by a narrow vote of 11 to nine, agreed to provide bridging finance to Shetland Arts, with a limit of £600,000, to enable the entire project to be completed.

But the council bale-out has provoked a fresh dispute over the troubled construction phase of the project.

Shetland Arts today accused local builders DITT Construction of being to blame for the delay in the completion of the Mareel which finally opened in August. Burt the building company immediately hit back, blasting the Shetland Arts Development Agency for resorting to making “wild, inaccurate and desperate claims.”

A spokeswoman for the islands council had earlier announced: “Shetland Islands Council has approved bridging finance to Shetland Arts Development Agency (SADA) in respect of Mareel, on a narrow vote of 11-9. A facility of up to £600,000 will be provided to enable the completion of the project.

“There are a number of stringent conditions attached to this offer to give the community greater reassurance on Mareel’s viability. The council will commission a full due diligence study and post-project review. It is hoped that this offer will secure the future of Mareel, and protect the local community’s investment of £6.1million and £5.9million of other public funds in this important public facility.”

A spokeswoman for Shetland Arts welcomed the council’s decision. She said:”The additional support creates a breathing space in which Shetland Arts can recover costs and damages from those responsible for the overspend on the construction of Mareel. This additional support is not related to the running (revenue) costs of Mareel which are covered by ticket sales, hire of the venue, café bar and concession sales income.

“The provision of money ensures that Mareel remains an operational community asset – one open to people from all corners of Shetland. However, the board is to seek further clarification on the precise nature of the financing and the conditions attached”

Gwilym Gibbons, the director of the agency, also welcomed the council’s plan to commission a full due diligence study and a post-project review.

And he declared: “We will be able to show whoever carries out these pieces of work, the view of the contract administrator is clear that the contractor, and not Shetland Arts, is to blame for most of the delay.

“We have been disappointed by the repeated premature claims over the past year by DITT Construction Ltd that the majority of delays have been due to Shetland Arts making changes and problems with the design of Mareel. We have always felt that their statements and suggestions were false and damaging.”

He claimed that DITT Construction were continuing to “smoke screen their own failings” and blame Shetland Arts for the delays in the project. And Mr Gibbons continued:” If DITT Construction Ltd had managed the project diligently and expediently Mareel would have been completed in late July 2011 as opposed to 24 August 2012 when practical completion was actually certified.

“Regrettably the focus of DITT Construction Ltd appears to have been more on maximising profit from this community-funded project than simply expediently and diligently completing the task in hand.”

Peter Tait , the director of DITT Construction, refuted the allegations. He said:” We are disappointed that Mr Gibbons and the Shetland Arts Development Agency has resorted to making these wild, inaccurate and desperate claims. We refute the allegations made directly regarding us, but will not be responding on the details which they have chosen to include in their statement. These are subject to ongoing litigation.”

Mark Boden, the chief executive of Shetland Islands Council, held a meeting this afternoon with representatives from Shetland Arts Development Agency following the decision to provide up to £600,000 of bridging finance.

He said: “I am reassured by my first meeting with SADA’s management that we will be able to work together on the due diligence exercise. There is a lot of work to get through in order to be able to provide a comprehensive picture to members in February. However, I’m confident that we will find a way to secure the considerable investment of public money that has been made in Mareel. We will keep members – and the public – informed as this process goes ahead.”