THE head of Edinburgh's tram project has had his contract terminated amid growing fears of further delays to the controversial scheme.
The appointment of Ian Kendall was regarded as a coup when he was drafted in three years ago after overseeing the introduction of trams to the London borough of Croydon.
It is understood the Australian troubleshooter left his post in Edinburgh after being blamed for a series of missed deadlines and problems with the technical design of the new trams network.
The move has seen concerns raised that the council's transport firm, TIE, will now miss an autumn deadline for the presentation of a business plan to ministers.
That would see the release of Executive funds stalled and the start of construction work - currently scheduled for January, likewise delayed.
Some elements of the project, mainly technical details on how the Capital trams system will be likely to operate, are also believed to be in need of re-drawing, it has emerged.
TIE said today it was still on course to deliver the scheme by its current revised deadline of the year 2010.
But sources close to the project have disputed the deadline claims and said the company was "in crisis" and facing "a nightmare few months".
Mr Kendall was appointed to the newly-created post of trams project director - with a salary somewhere in the region of 250,000-a-year - last August, after serving for two years as procurement manager.
TIE chief executive Michael Howell has since taken over and is in temporary control of the scheme. A replacement project director is expected to be appointed within the coming weeks.
Mr Howell denied suggestions that Mr Kendall had been sacked, saying his contract was "terminated by mutual consent".
While admitting that some aspects of the preparatory work have fallen slightly behind schedule, Mr Howell said that "slack" has been built into the programme and trams would still be running by the year 2010 as was previously planned.
But some insiders have said the latest turn of events had left the controversial trams project in turmoil.
The start date has already been delayed from 2008 to 2010 and the price for the overall scheme has risen from 473 million to 714m.
Because of a massive funding shortfall, only one line is currently earmarked for completion by July 2010. The line will run from Leith's Western Harbour to Edinburgh Airport.
One source close to the scheme said today that Mr Kendall had been escorted from the building last Monday: "They [TIE] are in crisis. "A number of things came to light last Monday, and Ian was told to immediately clear his desk and was escorted out of the building.
"There were a number of missed deadlines, delays in handing out contracts, and flaws in the technical designs of the network."
Another insider said: "There are some real concerns about what is happening at TIE.
"They need to sort themselves out, because it looks like they don't know what they're doing."
The source added: "It's going to be a nightmare few months.
"There are very real concerns that the business case won't be ready in time for the Scottish Executive's autumn deadline."
SNP Lothian MSP Kenny MacAskill said: "This smacks of an organisation in turmoil.
"Given the amount of public money they are capable of spending, we need to get a grip on the situation."
Mr Kendall has formerly managed a number of tram bids, including Manchester and Leeds, and was the lead director during the planning and construction process of the Croydon tram scheme.
He helped choose the future trams operator for the Edinburgh scheme, Transdev.
Mr Howell said today: "Ian Kendall has never been an employee of TIE.
"He had a contract with us in the name of his own management company, which he continues to develop. We found this inconsistent with his role here and after a conversation his contract was terminated by mutual agreement.
"We will be seeking to replace him and there are a lot of good people out there.
"We anticipate finding a replacement within ten days to two weeks. Ian's departure is a short-term issue.
"Nothing has changed and we are ready to go. We anticipate presenting a business case by the end of the year and beginning work early in the new year."
TIMELINE OF TROUBLE
June 2003 - Transport chiefs admit a Scottish Executive grant of 375 million might not be enough to cover the costs of the project.
December 2003 - Cost of two tram lines put at 473m, nearly 100m more than the Executive's grant and leaving the project with a huge financial shortfall.
January 2005 - Lengthy parliamentary process puts back estimated completion of scheme from the year 2008 to 2009.
February 2005 - Failed referendum on congestion charging means a third tram line to the south of the city is shelved indefinitely.
September 2005 - The Evening News reveals inflation has not been included in the cost of the scheme, increasing the price from 473m to 714m. Completion date put back to 2010.
October 2005 - Trams chiefs admit city's streets will need to be dug up twice. The first time will be for moving utility works and then the second time for laying tracks.
October 2005 - New figures reveal 16.5m has already been spent on the scheme - before final approval.
November 2005 - Transport Secretary Alistair Darling warns city leaders about the risk of spiralling costs.
November 2005 - Scottish Executive bail-out of 115m, it emerges, will not cover funding shortfall.
January 2006 - One of the two tram lines is shelved due to the funding crisis. Only a line from Leith to the airport deemed affordable in a "first phase".
March 2006 - Tram chiefs under fire for planning to spend up to 60m on the scheme before final approval this autumn.
May 2006 - Project chief Ian Kendall leaves.