TIE’s replacement to cost city £8000 a day

By MICHAEL BLACKLEY City Council Reporter
Published on Thursday 13 October 2011 12:16

The private firm brought in to run Edinburgh’s tram project will cost the city nearly £8000 a day, the Evening News can reveal today.

International consultancy firm Turner & Townsend (T&T) will be paid £700,000 every three months under the deal that saw the company replace discredited tram firm TIE as project manager.

It also emerged today that the final wave of pay-offs at TIE, where around 20 of the 29 remaining staff will leave on voluntary redundancy deals, will cost the council another £800,000. That will take the total cost of redundancy deals for staff at TIE up to £2.1 million – and that does not include former chief executive Richard Jeffrey’s pay-off.

The £2.8m annual cost of T&T managing the project will come on top of costs relating to the time put in by officials at the council, which has taken a much more “hands-on” role since mediation talks with the construction consortium headed by Bilfinger Berger began earlier this year. It also does not include the cost of Transport Scotland officials, who have been brought in to help oversee the troubled project.

But council bosses insist that the costs will still be lower than the running costs at TIE, which total £47m since the start of the tram project and have worked out at an average of £2.1m per quarter.

City council chief executive Sue Bruce said: “The idea was that, in winding down TIE, it would put control back to the council and see if we could save on any costs. The idea was that, if there were any [staff] skills that we needed then we would keep these, otherwise we would let them go.”

When asked whether the project will progress more smoothly with the end of TIE, Mrs Bruce said: “I think it will sharpen the focus and bring clarity around roles and responsibilities, and it will be easier to keep a tight hand on it.”

The winding down of TIE is expected to be completed within four weeks. Of the nine staff not being given redundancy deals, five are expected to join T&T, while four are set to get new positions within the city council.

Councillor Lesley Hinds, transport spokeswoman for the Labour group on the council, said: “I am quite shocked about the cost of Turner and Townsend because, as I understand it, they are not taking over the whole function of TIE. They are doing a part of it but there will also be the cost of Transport Scotland staff and staff seconded from the council. There have to be questions asked about why the cost is so high.”

Councillor Jeremy Balfour, leader of the Tory group on the council, added: “These figures are a big surprise. We asked for more details before Turner and Townsend were appointed and we did not get that. We wanted to know what their standing would be, how much they would be paid and what they would do and that was not provided to councillors.”

Councillor Gordon Mackenzie, the city’s transport leader, said: “I think TIE have become tainted by what has happened. TIE as an entity has become synonymous with the difficulties the tram has experienced. It was clear that a fresh start was required. That said, there are a lot of people working at TIE who have done nothing but their very best and contributed a great deal to try to get the project moving forward.”

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41

gus1940

Friday, October 14, 2011 at 06:23 PM

Yet another trams gravy train hoves into view.

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40

Jools in Edinburgh

Thursday, October 13, 2011 at 11:58 PM

#39 Exactly. We're not talking RBS here, as someone previouly said. This is a small organisation of 29 employees. Most of them must be culpable in some way for this mess. Why not just sack them without redundancy and let each TIE member take them to court if they wish. Alternarively, ask a judge to put a hold on their redundancy payments in light of the facts we know. Leave it up to the public enquiry to decide which of TIE's employees were guilty of gross negligence. Time for some accountability.

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39

TooLittleTooLate

Thursday, October 13, 2011 at 11:48 PM

"20 of the 29 remaining staff will leave on voluntary redundancy deals, will cost the council another £800,000." That's 40 grand a head - why not just sack them for gross incompetence as they must each have screwed up at least 144 times...........

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38

Tartancult

Thursday, October 13, 2011 at 09:03 PM

This (TRAM fiasco) will take longer to resolve than the (real) issue before us - how to work a line feed into the text. Ah well...

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37

jdships

Thursday, October 13, 2011 at 07:45 PM

" Councillor Gordon Mackenzie, the city’s transport leader, said: “I think TIE have become tainted by what has happened." Clr McKenzie I have news for you . City of Edinburgh Council HAS become tainted by what has happened. Whenwhere is this sorry mess going to end ? Your statement's are those of a man completely out of his depth who should " fall on his sword " In May 2012 we should all ensure we do not vote for any "SITTING COUNCILLOR" as not one of them deserves to stay in office

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36

doojas

Thursday, October 13, 2011 at 06:41 PM

I am sure that any investigation will not bare any fruit,there are so many powerfull people that probably could bring down the council.Theres probably a shortage of brown envelopes at cec headquarters,this is probably the reason why there has never been a investigation so far they are trying so hard to cover thier own backs,i can gaurantee that it will end up the same as the parliament building,someone will will say there was things we could have done better.This of coarse will be the answer not unless someone DIES then there the blaim will lie.The investigation will not take place until after the elections in Edinburgh and by that time there will no longer be a libdem and snp coalition,they will both be out.

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35

Thickasabrick

Thursday, October 13, 2011 at 06:30 PM

Who was the last leader of any organisation who was investigated or charged following this type of disaster? Just think back to Holyrood. Nobody was to blame, nobody lost their job, no organisation was named as guilty. Since nothing obviously was learned, we can form our own conclusions as to why inquiries are held. A mild form of appeasement. probably. Right lads, where's the next major construction job?

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34

WOTTPI

Thursday, October 13, 2011 at 06:04 PM

31 Jools. Its simple, not everyone is incompetent or negligent as there are people down the line who were just following orders and-or processing things on the basis of the information given to them from above. Do you sack every employee of RBS because of the actions of Fred the Shred. No The vast majority of people who are employed in any mediaum to large organistation have a choice get with the programme or hit the highway. If you are so unhappy or concerned then you can move on or whistle blow. The reality is that there a few key people at the top of all organisations invovled who have made improtant decisions and its these folk who need to be investiagted. Not some sap further down the line., albeit I still ahve an issue with the general salaries that appear to have been available to all grades at tie.

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33

SarahB

Thursday, October 13, 2011 at 05:49 PM

Jools - Thank you. Just for clarity, I am not anti-tram, as such, but I did have concerns about this scheme and what implications the funding shortfall could have, if left unresolved. Not sure I can answer your question, except to say that there are probably clauses in their contracts covering termination of contract of employment which entitles them to stipulated remuneration, although I would be surprised if they would entitle them to such high pay-outs as have been reported. To establish gross negligence, the Council would have to be able to evidence that against each employee in question. It would be very difficult to do that against all but the most senior. In the case of senior TIE staff, there may not be the will within CEC or the Scottish Government to attempt to prove gross negligence - particularly if those organisations have their own skeletons to hide. As an example, the Herald recently carried a story about Willie Gallagher of TIE advising the consortium, prior to contract close, that the funding shortfall (of which they were all well aware) would be met from the public purse. Now, did he just say that off his own bat, or had he been given reason to believe that that would be the case? I don't know the answer but there have been many similar events on this project which should be investigated. What seems to be happening is that TIE is being made to appear the sole party at fault and, even if that were not true (and I do not believe it is), they have taken large pay-outs. I would not be surprised if, in accepting such large pay-outs, they also became bound to confidentiality conditions. That would explain why no member of TIE, at whatever level, has so far seen fit to defend the company or their own reputation.

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32

Thickasabrick

Thursday, October 13, 2011 at 05:36 PM

#19 Rugal & # 21 Kate Yes, all very true, but how often are we to hear it all? When we get to next May does anyone really think all those councillors will just vanish? The electorate's toleration of incompetence is infinite and legendary. We earn - they squander. That's it. End of! Wish I could've worked in the public sector. Big salaries, huge bonuses and poor results. And no stress of course.

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31

Jools in Edinburgh

Thursday, October 13, 2011 at 05:29 PM

hi sarah its a pity you wanted to scrap this thing otherwise you would have been a great asset to be involved in this new organisation:-) Can you tell me any reason why tie employees could not be sacked for gross negligence without redundancy?

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30

The Genuine Mario Antionette

Thursday, October 13, 2011 at 05:29 PM

Ding Ding...

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29

Tobytoo

Thursday, October 13, 2011 at 04:59 PM

Someone mentioned that this new format was faster, Not for me,actually I think it is pathetic and why do they start with the last comment first when someone is answering a comment that is maybe 20 comments away. If I want to see the comments starting at #1 I have to go through the whole story page again to scroll down to the comments again,it is just a waste of time..

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28

B K

Thursday, October 13, 2011 at 04:55 PM

Just when you think it can't get worse, CEC prove you wrong! And no 24, if they were sacked for gross misconduct, not only would they get no severance pay, but could be sued!

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27

SarahB

Thursday, October 13, 2011 at 04:49 PM

Who prepared and costed the original case? I think that was prepared by TIE (with consultants Mott McDonald and others), signed off by CEC and approved by the Scottish Government and CEC. Who drew up the contracts with BB etc? I think they were started off by Ian Kendal of TIE and carried on by Willie Gallagher, with DLA Piper's involvement. The consortium were obviously involved in its preparation as well. The Scottish Government certainly had sight of the contract and Tom Aitchison, with the assistance of the Council Solicitor and Directors of Finance and City Development, was given authority by CEC to decide when, having resolved outstanding issues, to instruct TIE (Willie Gallagher) to sign it. Who appointed TIE personnel and on what criteria? TIE appointed all but the most senior TIE personnel and set salary levels, although I think more senior salaries were subject to CEC approval. The criteria used is beyond my comprehension. Who was monitoring performance and cost against project milestones? This is a grey area. The day-to-day performance of TIE seems to have been monitored by TIE. Overall TIE performance was for CEC officials to assess but they were very much out of political favour and so I think TIE largely got away with little scrutiny. As to milestones, up to mid-2007, it was Transport Scotland but the responsibility but they would have us believe that it then passed to CEC - I am not at all convinced that it did. Were these reported to the councillors in a form they could understand? I think they could understand these reports but the problem was that the reports were often wrong or highly misleading. They were largely prepared by TIE but subsequently signed by CEC officials, making accountability unclear. How were bonuses established and how were they earned? I think they were generally a matter for TIE and, again, even if CEC officials were unhappy, they were (a) out of political favour; and (b) seemingly unable to control what TIE was doing.

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