Mareel’s financial management to be examined

SIC officials have embarked on the task of trying to establish what went wrong during the construction of cinema and music venue Mareel.

On Thursday, chief executive Mark Boden met with Shetland Arts director Gwilym Gibbons to discuss how its provision of up to £600,000 in “bridging finance” will work in practice.

There has been some confusion caused by political leader Gary Robinson’s statement that the money was neither a grant nor a loan. The council says it will hold the £600,000 and issue sums of money only when required by Shetland Arts to meet its “immediate, short-term financial commitments”.

Mr Boden 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.”

Mr Gibbons said it had been a “very positive and constructive meeting”. He and his staff are committed to working with council officials “to safeguard everybody’s investments in Mareel and ensure that Mareel continues to be a success”.

SIC officials will examine the financial management of the £12 million project, which went £1.2 million over budget. They will also look at its ongoing income and whether the venue can really buck the trend for public buildings in Shetland by paying for itself.

On Thursday Shetland Arts issued a statement saying the contract administrator put around two-thirds of the 18-month delay down to “the actions or inaction” of contractors DITT.

There are also questions over the role played by the SIC’s “Mareel sounding board”, set up in 2008 to keep councillors informed about the project’s progress. In September last year, a report from development director Neil Grant stated that the building’s construction remained within budget.

In a letter to The Shetland Times, councillor Jonathan Wills said he hoped that “with a new business plan, Mareel can trade out of its current troubles”.

He said better-than-expected cinema attendances gave “grounds for a little optimism”. More than 30,000 cinema tickets have been sold in the first three months. But Dr Wills suggested: “Those who support Mareel will also have to put their money where their mouths are, by paying for more tickets and probably also by becoming financial patrons of the venture.”

He said the latter was a common method for helping to fund projects such as the renovated Kelvingrove Museum in Glasgow and the National Portrait Gallery in Edinburgh.

Mr Gibbons said that, while the business plan was constantly being monitored and aspects may be tweaked, “on the whole” he is very pleased with the level of income being generated so far.

“I think it’s too early to be making any significant changes in the way that we’re operating. On the whole we are really pleased with how well, financially, Mareel is working. There is a caution – these are the first months – but our focus is to ensure it operates with no additional local subsidy.

“I understand that there is scepticism and that people might see the challenge that’s there as difficult. Our job is to make what is currently successful more successful.”