Trams boss: 'We won't be held to ransom' over extra £80m

Published on Wednesday 25 February 2009 08:59

EDINBURGH'S tram boss today broke his silence over a multi-million-pound dispute with contractors, vowing that he would not be "held to ransom".

David Mackay, interim chairman of tram firm TIE, spoke to the Evening News as it emerged that officials are drawing up plans to sue contractor Bilfinger Berger if it refuses to start work on Princes Street.

Talks are still ongoing to begin work on laying the first set of tracks after it was halted by the 11th-hour demands of the German contractor. TIE remains deep in negotiations with the BSC consortium which includes Bilfinger Berger, in an attempt to get the contractors – who want an extra 50m-80m to begin work – back on site.

Officials are said to have demanded "immediate" action, and have threatened legal proceedings if the German company fails to comply.

Speaking for the first time since the dispute began last week, Mr Mackay, told the Evening News he would not bow to pressure from a company which had used similar tactics in the past.

Mr Mackay, who has previously admitted that rising costs are "inevitable", said : "We've made it perfectly clear that we're not going to be held to ransom by anyone.

"The German company must do what it thinks fit. I'm positive about Edinburgh's trams and will continue to be. We have a duty to the people of Edinburgh, whose forbearance has been quite remarkable.

"I don't have any doubts about what the truth is. The truth is quite simple and the truth is coming from us. Their (Bilfinger Berger's] track record in the past includes behaviour similar to this. TIE and the city council will not make any unjustified payments."

Mr Mackay said discussions between the two parties were continuing on a daily basis and would be resolved in days rather than weeks and months.

Councillors yesterday held emergency discussions about the contractual dispute behind closed doors and are understood to have unanimously backed TIE's stance.

Council officials are expected to be asked to produce a dossier on the cost of cancelling the scheme in the coming weeks, but sources said abandoning the project could run to almost half the overall budget.

Graham Birse, deputy chief executive of the Edinburgh Chamber of Commerce, said: "We believe the council and TIE have behaved in the right way. This is not a high stakes game of poker. It's important for Edinburgh that a solution is reached quickly."

David McLetchie, Scottish Conservative MSP for Edinburgh Pentlands met representatives from Bilfinger Berger yesterday.

He said: "I was assured by Bilfinger Berger that it is ready and willing to meet its contractual obligations, both in relation to Princes Street and elsewhere on the route

"There is an urgent need for a top-level meeting, within the next 48 hours, between the council, TIE and the contractors, an open recognition of the practical problems to be tackled, and a realistic assessment of what is needed to put the project back on track.

"I urge them all to get on with it."

Work on the troubled 512m scheme is now thought to have slipped up to eight months behind schedule due to problems with the initial utility diversion works.

News of the contractual dispute emerged just hours before a raft of traffic diversions were meant to be introduced ahead of a nine-month closure of Princes Street at the weekend, piling further pressure on embattled tram bosses.

Politicians from both sides of the political spectrum are now queuing up to attack the project, with Nigel Griffiths, Labour MP for Edinburgh South, saying it was time to "cut our losses" and scrap the scheme.

Angela Constance, SNP MSP for Livingston, said: "This is an absolute fiasco. Princes Street is at a standstill while the contractor holds Edinburgh City Council to ransom. I am seeking reassurances from Mr Swinney that the Scottish Government will stick to its guns and not allocate a penny more to this wasteful scheme."