WEEKS before the council has to set its annual budgets, the SIC is continuing to refuse to say whether it has adequate insurance cover against a £5.25m claim from Lerwick Port Authority.
The LPA claim relates to losses incurred after it had to delay dredging work on Lerwick Harbour because of the council’s now aborted plan to build a bridge to Bressay.
LPA chief executive Sandra Laurenson confirmed that the harbour is now dealing with the solicitors for the insurers of the SIC, appointed by Zurich Municipal on the council’s behalf. “We raised a summons and that’s in the Court of Session timetable now, the summons is in and the defenders are lodging answers and so on,” she said.
The council refused to reveal any details after a freedom of information request from The Shetland Times earlier this year and SIC chief executive Morgan Goodlad this week declined to say whether the council was insured against the claim.
He said: “This matter is referred to our insurers and it is their legal representatives who will deal with any claim.”
Lerwick South councillor Jonathan Wills said it was worrying that the public and councillors were not able to know whether the SIC was insured because the sum could amount to around five per cent of its annual budget.
Meanwhile, a spokeswoman for Audit Scotland confirmed it was now considering Dr Wills’ letter asking the body to investigate the council’s habit of wasting millions of pounds on capital projects without managing to get them off the ground.
She said: “We have followed our usual correspondence processes and passed this letter on to the local auditor, for their consideration as part of the routine audit work at the council.”
Convener Sandy Cluness, who has accused Dr Wills of pursuing a “witch hunt” by calling in the auditors, is expected to go before a special meeting of the council’s audit and scrutiny committee on Tuesday week to answer questions about the SIC’s handling of capital projects.