A BITTER dispute that has all but stalled work on Edinburgh's troubled tram system is unlikely to be resolved until the summer, sources close to the project have admitted.
The Scotsman has learned that a deal between City of Edinburgh Council, its tram company, Tie, and the main consortium working on the project will almost certainly not be agreed until after the elections in May.
Insiders have blamed the delay on the need for council chief executive Sue Bruce to oversee the handling of the elections in the capital, insisting she is "crucial" to the tram project getting back on track.
Ms Bruce receives extra payment, believed to be up to 20,000, for acting as returning officer, on top of her salary of 160,000. She will oversee the election both of MSPs in Edinburgh and the list MSPs from the Lothians area.
One insider said: "The election will hold things up for a variety of reasons. The main one is that Sue Bruce is the returning officer overseeing the counting of votes from all over the Lothians, as well as the poll on voting reform.
"There is no way there will be any crucial decisions taken on the tram project just before the election, for political reasons. It doesn't mean there is no work happening to resolve the dispute, but a quick fix is out of the question."
Shirley-Anne Somerville, an SNP candidate standing for Holyrood in the Lothians, said: "Sue Bruce is absolutely integral to the whole mediation process, as she was not involved in the project, coming to it fresh. I'd certainly hope there is no delay in trying to bring this dispute to an end. The election should have no impact on the need for Tie and the council to sort it out with the contractor."
Tory candidate David McLetchie said the talks should not be "put on ice" until after the election.
He said: "It is not as if everyone is not aware of the issues. I'm sure there are plenty of officials at the council who are capable of overseeing the council's handling of the elections. Blaming Sue Bruce's involvement sounds like a cover story for not having anything to report."
Gordon Mackenzie, the council's transport leader, said: "We have agreed not to say anything while the process is ongoing. The process is not on hold."
Councillors decided last year to intervene over the fate of the project amid dismay at the protracted length of the dispute and Ms Bruce, who was appointed at the beginning of the year, has been leading the authority's efforts to find a resolution, rather than Tie chief executive Richard Jeffrey.
However, politicians have demanded that every effort is made to reach a resolution as soon as possible and that the elections should not get in the way. The dispute revolves around how much it will cost to deliver key sections of the tram scheme and who is responsible for problems that emerge.
The first peace talks to resolve a dispute that flared up in February 2009 broke up this month after only a week without any resolution.
Trams were due to start running last month, but the network is not expected to start until the second half of 2013. Details of what area will be covered by the initial phase and how much it will cost to get up and running are still unknown.
Officials at Tie are unable even to say when any further "mediation" discussions will take place, insisting they are gagged due to all parties agreeing on a "policy of confidentiality" until there is a breakthrough.
It emerged on Friday that ten of the trams built for the Edinburgh scheme are set to be used by Londoners for up to 20 years, after Tie was shortlisted to provide vehicles for Croydon's expanding network.
One source said: "Things are still looking fairly positive in terms of reaching a solution, but it is a complex process and it is not going to be resolved in the next couple of weeks.
"You are talking about trying to get some kind of solution on the table over the next few months and the council having to reach a crucial decisison. But at the earliest, that is likely to be in June or after the recess in August.
"By then there should be clarity over the make-up of the next administration in the Scottish Government, which may be crucial in taking the project forward."
Some 72 per cent of the construction work on the tram project is unfinished, although just 38 per cent of the budget is left.Senior figures in the local authority and Tie hope the first phase of the project can be delivered for 600 million - although there is huge uncertainty over which parts of the city will benefit from it.
Originally, the then Scottish Executive awarded 500m to the tram project to pay for two lines, but a section from the waterfront to Haymarket was shelved due to concerns about funding.
It is thought the first phase may only run from Edinburgh Airport to the city centre, with latest reports speculating there will only be enough money to stretch as far as the Haymarket railway station.