THE Dockyard Marina Company is going to arbitration to settle a dispute over its lease with the West End Development Corporation (Wedco), the can reveal.

The company is the second long-term tenant at Dockyard to reveal leasing problems with Wedco in the past two weeks.

The Bermuda Cement Company (BCC) last week went public on its dispute with the Government agency, a dispute which has left the company's future in doubt. BCC president Jim Butterfield met with Premier Alex Scott yesterday to discuss the matter.

Tony Smith, president of the Dockyard Marina Company, said this week: "The company is going to arbitration with Wedco over our lease, which expires in 2006.

"We have agreed on an arbitrator and we are awaiting the confirmation of a date. I cannot comment further as the matter will be going to arbitration."

The marina was set up in 1987.

Wedco general manager Lloyd Telford did not respond to a message left at his office yesterday.

Meanwhile, evidence has come to light that Wedco ignored the instructions of Finance Minister Eugene Cox in failing to offer the Bermuda Cement Company (BCC) a new 20-year lease.

BCC's ageing facilities were badly damaged by Hurricane Fabian and the company is keen to build a new plant. But it will not go ahead with the multi-million-dollar investment, while uncertainty remains over the lease. For now, the plant has been patched up with plywood.

According to the records of Mr. Butterfield, Finance Ministry Permanent Secretary Donald Scott told him on December 23 last year that Mr. Cox had written to Wedco instructing them to give the company a new lease as quickly as possible.

Mr. Cox's letter added that a rent increase would be acceptable, but not to the extent that it would substantially increase the price of cement.

Mr. Cox sent his letter four months after Wedco had offered BCC a new three-year lease, entailing a rent increase of around 800 per cent.

Since the early '60s, the rent had risen at five-yearly intervals, in line with inflation, said Mr. Butterfield.

The current rent for the 21,000-square-foot site on the south of Dockyard close to the dockside is around $50,000 a year. The lease expires at the end of 2005 and BCC received an offer from Wedco in August last year to extend it by three years ? provided the company paid ground rent plus ten per cent of its gross sales, amounting to around $400,000 per annum.

Mr. Butterfield described that offer as "outrageous" and said he believed Wedco wanted BCC out.

His belief was strengthened by Wedco's decision to advertise earlier this month for "expressions of interest" from any party interested in taking over the site in 2006.

Over the past two years, Mr. Butterfield has taken his case to several senior Government figures, including Terry Lister, Alex Scott, Dale Butler and Mr. Cox.

BCC, which is owned by 12 local shareholders and some international interests and employs four full-time staff, supplied the island's booming construction industry with more than 40,000 tons of cement in 2002 ? a record high figure in its four-decade history at Dockyard.

If the company were to close down, there would be significant repercussions for the island, according to Mr. Butterfield.

"We work hard to keep cement prices down and we have the capacity to store 10,000 tons," Mr. Butterfield said. "Specialised cement ships, carrying about 6,000 tons can come to us and unload.

"Without the cement company, construction companies would probably have to import concrete in bags, which would be two or three times more expensive. And people don't like to bring in too much like that because the cement goes hard."

Over the fast two years, Mr. Butterfield and fellow company director Stella Winstanley have been in regular talks, on and off, with Wedco's Lloyd Telford.

They have proposed plans for a new plant, including a dome design, 100 feet in circumference and around 40 feet high, designed to minimise any negative effect on the environment. And BCC also suggested a new site further down the dockside on a site currently covered in junk, which at first seemed to attract Mr. Telford's interest, according to Mr. Butterfield, but later he told the company there were no plans to develop that area.

Mr. Butterfield believed Wedco wanted to put the cement business into the hands of others who had already been lined up.

Ms Winstanley said: "At some point, there was a change. At first we thought it was about them not wanting an ugly cement plant in a tourist area, but they realised that the construction industry had to get its cement from somewhere.

"Then they changed and it seemed they wanted to get rid of the people running the cement plant."

Mr. Butterfield said he had not given up his battle to keep BCC going and was still hopeful of getting a lease extension.