Tram chief in line to share £3m pot of gold

Published on Monday 20 October 2008 10:12

STAFF at the council-owned tram company TIE are in line to share a £3 million pot of bonuses if they keep the controversial project on time and in budget.

The Evening News has discovered the firm's 13 top executives are all eligible for a bonus of up to 50 per cent of their salaries, with a total pot of around 500,000 a year up for grabs.

But it is understood that the recent failure of The Mound traffic diversions will severely dent a number of TIE officials' chances of achieving their bonuses this year.

The rest of TIE's 71 staff are in line for a 25 per cent bonus, which will see them share around 600,000 a year if the project stays on schedule until 2011.

Last year the Evening News revealed that tram chief executive Willie Gallagher's basic salary had almost doubled in a year to 170,000.

He will also earn up to 340,000 in bonuses by 2011 if the project is completed on time.

The city's finance leader today said any bonuses paid will reflect the performance and work done by TIE officials over the course of the 512m project.

But deputy council leader Steve Cardownie, who leads the city's SNP group, questioned the amount on offer.

He said: "It sounds like nice work if you can get it.

"I think a lot of people will look at this and see that these people are already on nice salaries and the bonuses are for effectively doing their job.

"I would be interested to know if they get money taken off their salaries when there are mistakes, like the gridlocked city centre we had on October 1.

"We really do hope this project is being managed responsibly and will take no pleasure in this project coming in over budget. Bonuses will be a part of that."

TIE's remuneration committee is made up of chief executive Mr Gallagher – who is exempt from presiding over decisions affecting his own wage – two city councillors and two non-council representatives.

Figures released by TIE show that the board approved bonus payments to executives of between 58 per cent and 87.5 per cent of the 50 per cent bonus on offer between January 2007 and March this year.

Finance leader Gordon Mackenzie said: "Any bonuses paid will reflect the performance and work done over that time.

"Obviously, there will be further reviews, which will assess current and future performance against the dates or other milestones set in the contract."

Documents released to the News last year showed Mr Gallagher was hired by TIE on a salary of 100,000 in June 2006, with an annual bonus opportunity of up to 30 per cent.

But his new contract – approved by the TIE board in August 2007 – is worth 170,000 a year, with a bonus scheme of up to 50 per cent of his salary.

TIE declined to comment when contacted by the Evening News, adding it was more appropriate for the city council to comment on the issue.

WHEN SORRY IS NOT THE HARDEST WORD

FINANCE Secretary John Swinney apologised to delegates at the SNP conference for having to use government cash to pay for Edinburgh's trams.

Reporting on the past year's activities, he listed many of the major capital projects the Scottish Government is funding, including a new hospital for Glasgow and flood alleviation in Moray.

He said the government was using "all of the capital resources we have at our disposal to invest in the fabric of Scotland and to provide vital opportunities for our construction sector".

Then he said: "There is one exception, though. Normally government ministers don't apologise for anything and certainly not for major capital infrastructure. But let me apologise for this one. I didn't approve of it, but I'm having to pay for it – the Edinburgh trams."

And he added sarcastically: "What a triumph for the opposition!"

The SNP opposed the trams scheme but was forced to find 500 million towards it when MSPs voted in favour. Mr Swinney has repeatedly warned the council there will be "not a penny more", even if the project exceeds its budget.