THE controversial project to introduce trams to the capital has been plunged into fresh turmoil after the constructors said the complete line would not now be ready until 2014 – two years after the expected date.
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News of the significant delay came as speculation mounted that the cost of the 545 million Edinburgh tram scheme is set to rocket by more than 100m.
The development was condemned last night by the anti-tram SNP as an "utter disaster". News of the delay emerged as city council-owned tram developers TIE confirmed that the construction consortium carrying out the work had proposed a new timetable.
A statement issued after a TIE board meeting yesterday, which was held in private, said it "noted formally its profound disappointment with the lack of progress by the consortium against the expected progress".
The board said Bilfinger Berger – the firm which leads a construction consortium – had proposed "an additional delay, which would extend this by a further 30 months from now to a completion date of January 2014.
"This was deemed to be entirely unacceptable by the board, as was an unqualified increase in cost."
The Scotsman understands this increase to have reached around 100m.
It also emerged last night that Bilfinger Berger put the date to TIE in January, but the developers chose not to make it public until yesterday.
TIE insisted that independent experts had concluded the work could still be completed by mid-2012.
It also said a plan revealed by The Scotsman yesterday to open half the route late next year, between Edinburgh airport and Haymarket, was still possible.
The remainder of the 11.5-mile line to Newhaven has been embroiled in a year-long dispute between TIE and Bilfinger Berger. This has prevented any further tracks being laid since most of Princes Street was finished before Christmas.
The tram project board, which includes TIE officials and councillors, yesterday stepped back from a rumoured "nuclear option" to fire Bilfinger Berger.
The dispute centres on changes to the construction contract and delays to separate work to divert underground pipes and cables – which should have been finished in 2008.
The board instead instructed TIE chiefs "to continue to apply rigorously the legal terms of the contract to the contractor".
But a spokeswoman said other options, which were believed to include ditching the German firm, remained on the table if progress was not made over the next two to three months.
It is thought such options could involve extra legal and financial costs, with tram sources warning of litigation that would last for years.
The board's statement made clear it excluded tram builder CAF from the criticism of the consortium – suggesting for the first time that it was also not happy with Siemens, the grouping's third partner.
Significantly, TIE had previously privately praised Siemens as "customer-focused" and "trying to resolve problems" – in contrast to what it saw as the belligerent attitude taken by Bilfinger Berger.
Gordon Mackenzie, the council's transport convener, said last night that replacing the consortium posed risks to the project. because the contract would have to be re-advertised, while it was "not in our gift" to replace individual members of the consortium.
He described Bilfinger Berger's claim that the project would not be completed until January 2014 as "completely nonsensical".
TIE said auditors it had brought in to assess the project had concluded the construction contract was "wholly deliverable" by 2012.
The tram developer believes this has strengthened its position against the consortium.
Last night it emerged that Donald Anderson, the former Labour leader of the city council that approved the project, has been drafted in by Bilfinger Berger as a consultant in an effort to improve relations with TIE.
Bilfinger Berger is banned from commenting because of the terms of its contract.
Board chairman David Mackay said: "My concerns and those of my fellow directors are for the people of Edinburgh, who have continued to suffer from these seemingly endless delays.
"While the board will continue to seek a reasonable negotiated outcome to all matters in dispute, the clients' rights will be strenuously safeguarded. Our priority, and that of our partners, remains the delivery of a 21st-century integrated public transport system that represents good value and which Scotland's capital city deserves. This we will do."
However, the consortium is understood to have won four of five rounds of an ongoing independent dispute resolution process, which started in August.
Lothians SNP MSP Shirley-Anne Somerville, an arch critic of the project, said residents must be told whether the project would be finished and how the extra cost would be funded.
The city council would be responsible for any shortfall – in addition to its own 45m contribution – because the SNP Scottish Government will not add to the 500m pledged by its Labour-Liberal Democrat predecessors.
Ms Somerville said: "It is disappointing that we are now faced with a three-year delay and an 'unqualified' bill. It seems the contractors now expect Edinburgh's taxpayers to sign a blank cheque for this project.
"This is an utter disaster for the Liberal Democrats, who are leading the council.
"It is time that they, and the Labour Party, who conceived and planned this project, stopped trying to shift the blame to contractors and accept their responsibility for what has become a blot on the city.
"When the underground utility works are still to be completed in parts of the city, it is inconceivable for anyone to now believe this project will be on time or on budget."