THE SCOTTISH government has agreed to increase grant funding for Shetland’s flagship cinema and music venue Mareel by almost £300,000 to help cover extra costs caused by an 18 month delay in the construction.
Further funds have been approved in principle by Highlands and Islands Enterprise and Creative Scotland to finance the shortfall, though Shetland Islands Council are unlikely to agree extra funding.
Meanwhile local construction firm DITT is pursuing the building’s operators Shetland Arts for hundreds of thousands of pounds it claims to be owed from the contract.
Building work on Mareel began in May 2009 with an original completion date set for February 2011, though several setbacks delayed the opening until August this year.
Since then the state of the art building has proved a big hit with Shetlanders, with cinema audiences exceeding expectations and Friday witnessing the first sell out concert when popular local band The Revellers perform a Halloween special.
The initial budget for the building was £12.1 million, but Shetland Arts director Gwilym Gibbons said the final cost would not be known before the spring of next year.
DITT finance director Peter Tait said his company was currently pursuing a number of legal actions relating to Mareel and predicted that there would be more to come after the contract administrator finishes going through the paperwork.
Tait said additional costs were incurred due to the extra time it has taken to complete the job and the “fair amount” of changes to the original design.
“It is too early to say what the exact figure will be because the contract administrator has another five to six weeks to make his initial judgement on that, and I daresay neither us nor the arts trust will be happy with his position.
“So this will rumble on for some time,” Mr Tait said.
Last month, Shetland Arts agreed to pay more than £200,000 after DITT lodged a claim in the Court of Session. Mr Tait said some of these monies were still outstanding.
Original funding for Mareel was:
£5.19 million from Shetland Islands Council (42.8 per cent);
£2.82 million from European Regional Development Fund (23.3 per cent);
£2.12 million from Scottish Arts Council (now Creative Scotland) lottery funding (17.5 per cent);
£965,000 from Shetland Development Trust (eight per cent);
£965,000 from HIE (eight per cent); and
£50,000 from Gannochy Trust (0.4 per cent)
On Thursday the Scottish government said the ERDF was raising its investment from £2,822,203 to £3,098,708, an increase of £276,505.
Stuart Robertson of the Lerwick HIE office confirmed that the development agency had “approved additional funds” as the concept behind Mareel complied with the organisation’s strategy to enhance the creative industries.
A Creative Scotland spokeswoman added: “Creative Scotland has offered further support to the Mareel project on the basis that it secures further investment from the range of original partners.
“Our final contribution has not yet been determined and, in that context, we can’t confirm the amount.”
Shetland Islands Council had always warned that no additional funding for the controversial music and cinema venue would be forthcoming after the initial sum was only granted on the casting vote of then convener Sandy Cluness.
SIC development director Neil Grant declined to comment on the issue.
However SIC development committee chairman Alastair Cooper said that “to his knowledge” Shetland Arts had so far not approached the local authority.
He said it would be for councillors to decide on the way forward if a bid was made, but pointed out the council was “ill-equipped…in the current financial climate” to offer additional funds.
Gibbons said: “The board of trustees are committed to securing the best possible outcome on the final costs of the construction of Mareel for the community of Shetland.
“To that end through this period of negotiation with all those involved in the build, Shetland Arts will not comment on estimated figures or be drawn into comment on rumours and speculation.”
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