News / Mareel dispute settled
THE PROTRACTED and sometimes bitter dispute between Shetland Arts and construction firm DITT over the huge cost of delays building Lerwick’s cinema and music venue Mareel has been settled out of court.
The £13.5 million building opened in August last year 18 months behind schedule and £1.5 million over budget.
Shetland Arts and DITT have been at loggerheads over who is responsible for the delays, both accusing each other of incompetence.
Neither party was prepared to comment on the settlement signed on 4 November having failed to agree on a common statement, but it brings to an end any threat of expensive legal action in the Court of Session.
Fears for the future of the controversial building were allayed when Shetland Islands Council agreed to take ownership of Mareel and lease it back to Shetland Arts, taking the council’s total investment to more than £7 million.
Other funding agencies including Creative Scotland and Highlands and Islands Enterprise have also made a substantial contribution.
Th settlement also lifts a threat over the long term future of Shetland Arts, which ran a deficit of more than £160,000 last year and had no cash reserves to settle the legal dispute.
It is now looking to sell some of its smaller properties, such as the hatchery at Weisdale and The Booth in Scalloway, to meet its costs.
The organisation is not intending to approach the council or the Shetland Charitable Trust for future funding.
Cinema audiences have been much higher than expected since it opened, however the music programme is being reshaped after it made losses in its first year.
Last month chairman Danus Skene said that once the capital account was settled he was confident the organisation could sustain itself financially with its current £750,000 annual grant from the charitable trust.
DITT employs about 120 people on a variety of house building projects and the large maintenance contract at Sullom Voe oil terminal.
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