Robinson calls for answers as Mareel faces building delay

By NEIL RIDDELL

COUNCILLORS are being “kept in the dark” over what is happening with the controversial £12 million Mareel cinema and music venue project, a councillor has claimed, as it was revealed that no holes are likely to be dug at the North Ness this side of Christmas.

Shetland West member Gary Robinson, a strong opponent of the project since his election last year, said councillors had been assured they would be given updates at regular intervals when the SIC agreed – on the casting vote of convener Sandy Cluness – to give substantial financial backing to the project in June.

A short update was given in private at last week’s development committee, but Mr Robinson said it was “not very illuminating” and he hoped a more regular flow of information to councillors would now be forthcoming.

He said: “We were promised regular updates on this and we’ve had absolutely nothing. We were told the project was going to be on the ground by now. Three lines in a development report is well short of what I would expect.”

Shetland Arts director Gwilym Gibbons said he understood no additional questions had been asked following the update to the development committee. He said councillors could get further updates from their lead officers and that the agency was happy to provide any information elected members asked for.

Meanwhile, Mr Gibbons con­firmed this week that it was now “unlikely” that any building work would start before January. The agency, which previously said it hoped to start building work by the end of this month, is still waiting to hear whether it is to receive a sizeable grant from the European Regional Development Fund (ERDF) to complete the funding package.

The council has provided a £6.1m grant for the project, with a £2.1m lottery fund grant and £965,000 from Highlands and Islands Enterprise. The ERDF money is vital for the project as it covers the remaining cost, plus any contingencies incurred.

It is expected that the final price tag will exceed £12m, though Shetland Arts insists suggestions that it will cost as much as £15m are wide of the mark.

Mr Robinson said: “I think we would like a bit more explanation as to why the funding isn’t in place; also, it was said about the state aid complaint [thought to have been submitted by a member of the local licensed trade] that it wasn’t a valid one – that being the case we expected that it would be cleared up very quickly, but it appears to be dragging on as well.

“We were told all along that any delays would be critical. Well, we’re reaching a stage where we need to know just how critical those delays are and if it’s impacting on the cost of the project or not.”

There is still no explanation emanating from Brussels as to why an announcement from the ERDF has not yet been forthcoming, though it has been suggested the fund is planning to make a batch of announcements in one go. The ERDF had not responded to an enquiry from The Shetland Times when we went to press yesterday.

Mr Gibbons said discussions with local construction firm DITT, which is to build the venue, were still ongoing and were likely to continue for a couple of weeks.

He said: “I think because of the ERDF decision and when we’re going to hear about that, the like­lihood is we may not be starting building until early in the new year, but there might be something happening on site in December. We’re talking weeks, not months. It will be open in 2010.”

At a meeting of the council’s audit and scrutiny committee on Wednesday, members noted that a six-monthly internal audit report had flagged up that “the project management and financial admin­istration of the Mareel project must be clarified and the VAT situation rectified”.

They were told there appeared to be some confusion as to whether expenditure on the project was subject to VAT or not because it was unclear whether the council, as the main funder, or Shetland Arts – which is thought to be VAT-exempt – was purchasing contracts.

Councillor Jonathan Wills said that given the large sums of money involved it was a matter which ought to be clarified urgently.

Mr Gibbons said the agency was VAT-registered and was looking for potential VAT exemptions wherever possible, including for Mareel, but there was “no significant impact” on the project.