Runaway tram costs leave emergency fund half empty

Published on Monday 9 March 2009 08:51

A MULTI-million-pound contingency fund for Edinburgh's tram project is already half empty – even before a deal has been struck to get contractors back to work.

It is understood that just 40 million remains of the original 96m set aside for overruns or problems on the Newhaven to Edinburgh Airport line.

And as the Evening News revealed last week, the contingency fund is likely to be even further stretched as the work on Princes Street disputed by tram contractor Bilfinger Berger is expected to cost up to 20m.

The news of the dwindling resources comes as the full extent of problems uncovered by contractors working on the project is beginning to become clear.

It is understood that previously unidentified electricity cables have been discovered at a site near to the railway line at Balgreen.

Across the railway line at Murrayfield, piling work is now needed for a new embankment being built to carry trams past the rugby stadium.

Tram firm TIE today said it did not wish to be drawn on any of the issues while talks with Bilfinger Berger are continuing.

But opposition politicians today raised fears that any cost overruns on the tram scheme would be picked up by city residents.

Councillor Mark McInnes, the city's Tory transport and environment spokesman, said: "Any serious dents into the contingency fund at this stage would be concerning and what we need to be clear on is that any extra costs do not fall back on the Edinburgh taxpayer.

"The project was backed on the strength of the business case and it could be that this was simply not robust enough, so it is one we will be following closely over the coming months.

"If contractors have legitimate grievances as set out in the contract then these will have to be paid up but it is something TIE needs to keep on top of."

Transport chiefs are considering a number of options if crisis talks with Bilfinger Berger are not resolved, including opening the Haymarket to Edinburgh Airport section ahead of the rest of the 16km route in a bid to speed up the project.

Another idea is to bring the management of installing the tram track and overhead wires in-house, with council and TIE officials project-managing the work.

It might also be possible for Siemens – which is part of the tram building consortium, along with Bilfinger Berger and tram maker CAF – to take over Bilfinger's role.

Edinburgh West Liberal Democrat MSP Margaret Smith, who last week held meetings with senior officials at both TIE and Bilfinger Berger, said: "Quite clearly it is a tricky situation because there are claims on the funds in this contingency fund so TIE are in a difficult situation.

"If Bilfinger Berger believe this contingency money is a pot of gold then they are clearly mistaken.

"We are clear that this contingency fund is designed to last the full length of the project so TIE will need to stand its ground at times and keep control of this fund."

A spokeswoman for TIE said that the matter could not be discussed due to commercial and contractual responsibilities.

Trams slay dragons after audience vote

TRAM Line Three to Edinburgh Royal Infirmary emerged the winner in a Dragon's Den-style contest to choose the best transport project – but only after some outspoken comments from the judges on the Capital's trams scheme.

Edinburgh's Labour group leader Andrew Burns put the case for Line Three at the fringe event at the Scottish Labour conference at the weekend. He explained tongue-in-cheek to the experts that he was looking for "a mere 280m".

But one of the judges, Scott McIntosh of engineers Mott MacDonald, said: "I would rather invest my granny's savings in RBS."

He claimed there was a lack of political leadership of the project.

Four projects were presented and the modernisation of Glasgow's underground won the most points from the judges, with trams in third place, after a scheme for park-and-ride sites to double as lorry parks but before a plea to abandon the new Forth Road Bridge.

But after the addition of votes from the audience – which included a good contingent of Edinburgh delegates – the tram line won.

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