A Stornoway hotel group has lodged an official complaint with the European Commission, accusing Western Isles Council of breaking contract rules.
Cala Hotels which runs the Cabarfeidh, Caladh and Royal hotels in Stornoway -
Kenneth Mackenzie, Kenman’s managing director, confirmed a state aids complaint -
Local providers who stress the market is already over-
For the last 25 years, the council-
Natural Retreats is renting the castle on a long term lease from the Comhairle and
plans to open the newly renovated ground floor in October. Later, the upper floors
will be redeveloped into hotel rooms and self-
Natural Retreats will open 26 apartments -
However, Kenman Holdings which own Cala Hotels -
Kenman Holdings has also launched legal action against the council in the Court of Session where it is seeking a judicial review over the “flawed” council decision.
Managing director Kenneth Mackenzie said “Western Isles Council has stated that the procurement process undertaken was open and transparent.
“We disagree and wish to have this matter legally tested.”
Mr Mackenzie added: “Our complaints are founded upon some 1,500 pages of documentary evidence released by the council and Highlands and Islands Enterprise under Freedom of Information requests.”
Mr Mackenzie said the island tourism trade is “very supportive” of renovating the castle’s ground floor into public areas but are “seriously concerned their businesses will be badly damaged by the subsidised operation of the accommodation proposed on the upper floors of the development.”
The Comhairle highlighted any legal action and formal complaints will be “vigorously defended.”
Angus Campbell, leader of the council, said: “We are confident in the processes and procedures regarding the Lews Castle Museum and Archive project, including the appointment of the operator partner.
“The council took appropriate advice on state aid issues.”
The council maintains the tender was undertaken in an “open and transparent” procedure
Mr Mackenzie opted not to submit a bid, “despite registering his interest during the open tender period,” it added.
Council accused of breaking rules over Lews Castle hotel deal
4 Aug 2015