Call for spending watchdog to probe trams 'shambles'

Published on Thursday 11 March 2010 21:35

AN INDEPENDENT audit into Edinburgh's crisis-hit tram scheme was demanded last night, amid allegations that project chiefs were mishandling the construction contract.

• City tramworks have become a symbol of the project's troubles. Picture: TSPL

Two MSPs called for the project to be scrutinised by public spending watchdogs Audit Scotland in an effort to reassure residents.

However, the city council said the move would cause huge damage by diverting officials away from trying to have work on the project speeded up.

The call came as tram sources claimed to The Scotsman that the city council-owned company in charge of the 545 million scheme had resorted to strong-arm tactics against the firms building the 11.5-mile line. The firm admitted yesterday that 338m had been spent so far.

It was revealed on Wednesday the construction consortium had said the project could not be completed until 2014 – two years later than currently planned – and would cost an extra 100m.

That provoked a furious response from the tram project board chairman, David Mackay, who described the timescale and the "unqualified" cost increase as "entirely unacceptable".

The clash came as the latest twist in a year-long dispute between the consortium and tram developers TIE, the former Transport Initiatives Edinburgh, over design changes to the Edinburgh Airport-Newhaven line.

Independent MSP Margo MacDonald said: "There should be an independent audit of operations to date for public confidence in the scheme.

"There have been disastrous clashes between TIE and the companies. It is having a direct effect on commerce and traffic. It is also affecting developments, such as the Waterfront."

SNP MSP Shirley-Anne Somerville agreed urgent action must be taken to establish the true state of the project. She said: "With both sides of this dispute further apart than ever, it is high time Audit Scotland investigated.

"It is difficult, if not impossible, for anyone to have faith in the figures and dates quoted by either side. Talk of an 'unqualified rise in costs' in a publicly funded project is also a cause for real concern."

But council transport convener Gordon Mackenzie said: "This proposal is potentially the most damaging for the taxpayer I have heard. It would take vital management time away from the most immediate pressing task, to tackle the contractor on their underperformance."

Edinburgh Chamber of Commerce chief executive Ron Hewitt said now was "not the time for an independent audit".

He added: "This is a distraction the management team could well do without. The last thing we want is key people involved in assisting Audit Scotland to review their processes. Time would seem to be playing into the hands of the contractor and the losers are the people of Edinburgh."

Tram sources said TIE had failed to learn the lessons of losing three of the first four rounds of an independent adjudication process to resolve the dispute. They said this clearly showed TIE's approach had been found to be wrong. However, when things had not gone TIE's way, it had resorted to giving the consortium "a kicking".

It is understood that when TIE made overtures to replace consortium leaders Bilfinger Berger with partners Siemens, the firms closed ranks against it.

This led to the tram project board announcing its "profound disappointment with the lack of progress" – and effectively pointing the finger at Siemens by excluding the third partner, tram builder CAF, from the criticism.

The sources stressed the dispute derived from separate preliminary work by another company to move underground pipes and cables from the tram route, which may not be finished until the end of the year – two years late. It is claimed that significantly less of this work has been done than the 98 per cent quoted by TIE.

It is further claimed that Carillion, the firm involved, was fired last year. TIE would say only that another company was appointed in November to "complete remaining work" in the city centre after Carillion had "completed their agreed scope of work".

The sources said TIE had claimed as its own a proposal by the consortium to open the off-street section of the line between Edinburgh Airport and Haymarket by the end of next year.

TIE agreed the consortium had suggested the plan – which The Scotsman revealed on Wednesday – but it was not a new idea.

Gordon Burgess, chairman of the Leith Business Association, said: "There should have been a public inquiry long before now.

"TIE and the council continue to hide under the umbrella of commercial confidentiality, but that's not good enough when there is so much public money at stake and businesses have had to put up with so much uncertainty.

"The whole thing has been a shambles for the last two years. It is being run by people who simply don't know what they are doing."

Edinburgh's Liberal Democrat council leader Jenny Dawe has admitted SNP criticism of the scheme had been "unhelpful".

She pledged to explore the possibility of a full briefing for councillors on the project, but insisted that she did not want to "tie the hands of TIE" while it was involved in commercially sensitive negotiations.

TIE customer services director Mandy Haeburn-Little said: "In dealing with a dispute process as complex as this, the devil and the pound are in the detail.

"We need to be accountable for managing the contract well, while respecting the public role we are undertaking. If we failed to review the detail, we would not be fulfilling our role."

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