City set to rip up tram contract

Published on Friday 1 October 2010 14:56

COUNCILLORS are set to begin moves to rip up the contract to build Edinburgh's tram line as hopes of getting the project back on track fade.

• Councillors plan to kick Bilfinger off trams contract

The Tory group on the council said the current impasse with Bilfinger Berger had gone on "long enough" and said it was now set to lodge a motion demanding the contract with the German firm be terminated.

The move comes after the Evening News revealed that Bilfinger Berger had laid off dozens of staff amid claims they are owed millions by tram firm TIE. The council-owned tram company described the claims as "malicious misinformation" and said those making them could be in breach of contract.

Councillor Jeremy Balfour, leader of the Tory group on the city council, said there was now enough evidence to show Bilfinger had been in breach of contract in relation to other matters. He said: "We believe TIE should look at terminating the contract. We're still committed to the project, but we feel that both parties have been negotiating long enough.

"The best advice we've got is that Bilfinger is in breach of some areas of the contract that could lead to termination."

Edinburgh Conservative MSP David McLetchie added: "We are now in the endgame with the consortium. TIE should stop pussy-footing around. If Bilfinger is in breach of contract then it's time to show them the door."

But Councillor Gordon Mackenzie, the city's transport convener, accused the Tories of "political posturing".

He said: "At this stage we need clear heads. The Tories may feel they have thrown the first punch, but the right thing to do is go through the process to try and find a deal."

A report on the future of the tram project had been expected ahead of the full council meeting later this month. However, it is now understood there will be nothing new to report and an update may not come for several weeks. TIE is believed to have served Bilfinger Berger with nine breach of contract notices in the last few weeks without reply from the German firm, with the possibility of contract termination now looking more and more likely.

Last month it emerged that tram bosses were ready to tear up the contract with Bilfinger if tiot could not agree to build the route as far as York Place.

Deputy council leader Steve Cardownie, leader of the SNP group, said the Tory call for the contract to be terminated was both "entirely predictable" and "two years too late". He said: "If it wasn't such a crying shame and a waste of public money, it would be laughable."

Sources close to the BSC consortium, of which Bilfinger Berger is part, said the companies remained committed to finding a solution, but claimed TIE had lost 13 out of 15 independent adjudications, putting them on a poor footing for any potential legal battle.

TIE declined to comment, other than to say it was following a "twin track" approach to agree a revised cost and programme for the project, while overseeing it in a "commercially robust manner."

A spokesman said: "Our resolve to find an equitable resolution remains absolute but it is too early to prejudge how we reach that resolution and whilst this limited information may be frustrating, rest assured that we are leaving no stone unturned to protect the public purse."