A major row has erupted within days of the last £1.7m of funding to complete the renovation of Lews Castle being awarded.
Kenman Holdings Ltd, the holding company for the Cala Hotels Group, announced today it was seeking a judicial review of the tendering process relating to the accommodation aspect of the project.
In response, the Leader of the Comhairle, Councillor Angus Campbell, said: “We have every confidence in our processes and procedures regarding the Lews Castle Museum and Archive project, including the appointment of our operator partner.


“If the threat of legal action and formal complaint transpires, it will be vigorously defended and responded to by the Comhairle.”
On the same day that the operator Natural Assets Investments Ltd was holding a meeting in Stornoway Town Hall with prospective local suppliers, Kenman Holdings managing director, Kenneth Mackenzie said:
“Our action has the support of over 40 small local businesses who, whilst very supportive of the museum and ground floor renovation of the Castle, are seriously concerned their businesses will be badly damaged by the subsidised operation of the accommodation proposed on the upper floors of the development.”
In response Councillor Angus Campbell said: “I also want dispel the statement in Mr MacKenzie’s press statement regarding a subsidised operation.  Natural Assets Investments Ltd are committed to a minimum capital contribution of £500,000 as well as taking the whole operational risk associated with the project.
“The procurement of the private sector partner undertaken in 2012 was open and transparent.  Despite registering his interest during the open tender period, Mr MacKenzie chose not to submit a tender.”    
The Kenman Holdings statement said that the company had: “through its legal advisers been in correspondence with both the Comhairle and Highlands and Islands Enterprise in relation to the process leading to the decision to award a contract for Private Sector Development Partner for the Lews Castle development to Natural Assets Investments Limited and its associated company NA Lews Castle Limited.
“Last week, the Comhairle was advised that we have instructed our solicitors to:-

  • “Raise an action in the Court of Session for a Judicial Review seeking reduction of the award decision on the basis that the tender process was not genuine and was significantly non-compliant with applicable European laws.
  • “Lodge a complaint with the European Commission on the grounds of breach of European Rules on the award of concessions and the rules on state aid.”

Councillor Angus Campbell said: “This is a flagship, generational project for the community of the Outer Hebrides which will create much needed jobs and benefit businesses throughout the area.”
Referring to the public meetings in the Town Hall this week, he said he “would encourage as many people as possible to go and meet the Natural Retreats in the Town Hall” over the next two days and “to hear the facts for themselves about what the opportunities are.  The new Tourism Strategy highlights Accommodation as a key strategic action, especially investment in the range and quality that meets expectations.
The next “open door to the community” event organized by Natural Retreats in the Town Hall is at 1pm tomorrow (Wednesday) with a further one on Thursday at the same time.
It was only on Wednesday last week that it was announced that the project to restore and transform Lews Castle could took another major step forward as Highlands and Islands Enterprise (HIE) announced £1.7 million funding to complete the project.
Led by Comhairle nan Eilean Siar, the £18 million project involves the transformation of the category-A listed building which, HIE said, will deliver significant cultural heritage and economic benefits for the Outer Hebrides.
Commenting on the threatened legal action, a HIE spokesperson said: “The redevelopment of Lews Castle and Museum Nan Eilean is being led by Comhairle nan Eilean Siar and questions should be referred to them. It would be inappropriate for us to comment further at this stage.”