Mareel deal reached with total price tag of £12 million

Shetland’s long-planned cinema and music venue Mareel will be constructed by local building firm DITT at a cost of just over £10 million, it has been confirmed, with work on the site likely to start before the summer.

The contract was given the thumbs up by trustees at a Shetland Arts board meeting on Monday night when director Gwilym Gibbons announced the agency was in a position to move ahead after spending the past couple of months working with the contractor to bring the building costs back under the budget available for the project.

The contract now agreed with the Lerwick-based firm, which also recently built the iconic museum next to the North Ness site on which Mareel is to be assembled, comes to £10,022,019, a figure which includes a contingency of £300,000.

Shetland Islands Council is contributing around 50 per cent of the £12.1 million overall package – the bulk of the remaining £2.1 million being swallowed up by purchasing the site, obtaining planning permission, building design and specification costs – along with £2.8 million from the European Regional Development Fund, £2.1 million from the lottery fund and £965,000 from HIE.

Before building work can get underway, there are still some site-related issues to be resolved but Mr Gibbons said none of them was insurmountable.

Negotiations are ongoing with Scottish Water over the relocation of pumping station switch gear within the new building and Shetland Arts is still awaiting written confirmation from the health and safety executive that it will remove the current planning restrictions placed on a zone around the adjacent GB Oils tanks at North Ness.

The site is owned by the charitable trust’s property arm SLAP, which has indicated that it would prefer to lease the land to Shetland Arts rather than sell it as currently proposed. Mr Gibbons said that because the £300,000 contingency didn’t leave a great deal of room for manoeuvre, one possible option is that the land could be sold back to SLAP and leased from them at a cost of around £22,000 a year.

As the contractor, DITT will have to take responsibility for some possible eventualities – for instance, if the price of building materials go up it will have to absorb the extra costs, but if they go down it will benefit from any extra profit.

Mr Gibbons said there had been “no significant changes” to the design, sizes or number of spaces in the building and that the people of Shetland will still get the same quality of experience from Mareel.

He said the main means of trimming the cost had been shifting from a timber to a steel frame to take advantage of changing commodity prices, different underlay and pipes. “It has led us to get significantly more value for money out of our investment,” he added.

Shetland Arts hopes that the 700-capacity, 330-seat music auditorium within Mareel will become a regular touring stop for big name acts, while there will also be a 159-seat cinema and potential educational benefits, as well as spaces for recording and rehearsal within the facility.

But the project has been hugely contentious both in and out of the council chamber, particularly since the start of the current SIC term, with concerted opposition from several elected members who believe Mareel to be an unnecessary luxury at a time when the council is trying to tighten its belt and deliver a number of other important capital projects.