Cardownie's dire tram prediction as concerns grow line may stop at Haymarket

Sources suggest that at least 375 million of the 545m budget has already been spent, with huge amounts of work still to do.

It came as both tram bosses and the construction consortium made a series of claims in an increasingly bitter war of words:

Part of the route could yet be postponed due to funding shortfalls.

The project faces a further 100m in costs, according to contractors.

Tram firm TIE are "in denial" about the scale of the problems facing the project.

The "less adversarial" approach to the negotiations has not worked, according to the council.

German construction giant Bilfinger Berger claimed the project was facing a further 100m in additional costs, with tram bosses "in denial" about the shortfall.

In a letter from Bilfinger UK's managing director, Richard Walker, to senior executive members of the council, the construction firm claims that 100m would be a "conservative" estimate for the cost of a series of contractual disputes it has won against tram firm TIE.

It has also emerged that work to move underground cables and pipes, which should have been completed last year, may now not be finished until December, providing a breakthrough is found between the two sides.

Insiders now believe that the council will push to deliver the airport to Haymarket section in time for the 2012 local elections.

That has sparked fears that once that section is complete, the rest of the route could then effectively be postponed until more funding is in place.

It comes a day after it emerged Bilfinger had proposed a delay which would extend the project by 30 months, meaning it would not be complete until January 2014.

TIE said it was "deeply concerned" over the new revised programme, which it insisted was "unacceptable", and the city's transport convener, Councillor Gordon Mackenzie, suggested the German firm could yet be kicked off the project.

For its part, Bilfinger said it would defend "with vigour" any attempt to remove it from the project.

Councillor Cardownie, a long-standing opponent of the tram project, said today the latest revelations all proved the city should never have become "embroiled" in the scheme in the first place.

He said: "The modus operandi now is for them to get something running with members of the public on it in time for the elections.

"I've heard that there is an option on the table to get the Haymarket to airport line running by 2012, and opening it to three men and a ferret in order to get some fare-paying passengers on the trams."

A spokeswoman for the tram project said bosses remained committed to building the whole route, adding that external experts believe the scheme could still be delivered by 2012.

However, one source connected to the project told the Evening News: "There is now a softening-up process under way where they will complete the city centre to airport first and put in dates for the rest to be finished.

"They won't come out and say they're cutting the rest of the route – it would be too embarrassing. TIE have made a hash of this and the biggest issue for them now is avoiding blame."

The increasingly bitter disputes between TIE and Bilfinger are also likely to prove costly as it is believed that an adjudicator has found in the German firm's favour in the majority of the cases.

A crisis meeting of the tram project board yesterday is understood to have discussed options for "phasing" in the route a section at a time.

The Evening News understands that the construction consortium, which includes Bilfinger, approached TIE earlier this month about delivering the project in stages, with the airport to Edinburgh Park part of the route finished first.

It also warned that the scheme could not delivered in its entirety until January 2014.

Cllr Mackenzie today said the proposal was "not worth the paper it was written on". He said: "We don't rule out terminating the contract, but we believe best value comes from getting them to deliver it within the existing terms."

TIE chairman David Mackay said the timescale proposed by Bilfinger was "entirely unacceptable", and added:

"We have had a full and constructive discussion around these options and have a clear sense of what we need to do to achieve the best possible outcome."

SORRY SAGA

September 2001: Edinburgh City Council launches its new transport initiative, which includes the reintroduction of trams.

March 2003: Completion date: 2008; Cost: 375m.

January 2006: One line shelved due to funding crisis. Only line from Leith to airport deemed affordable in a "first phase".

June 2006: Willie Gallagher appointed executive chairman of TIE.

September 2006: Completion date: 2010; Cost: 512m.

June 2007: Scottish Government drops opposition to the plans.

July 2007: Preparatory work begins. Completion date: 2011; Cost: 512m.

July 2008: Preparation work for Princes Street closure to all traffic for seven months begins.

October 2008: Tram chiefs cancel plans to shut Princes Street after traffic chaos on The Mound.

November 2008: Willie Gallagher quits.

December 2009: David Mackay appointed new chair of TIE and admits costs rises are "inevitable".

February 2009: Tram work grinds to halt as Bilfinger Berger demands more money to finish. .

April 2009: Figures reveal tram bosses have been paid nearly 1 million in bonuses since the start of the project.

May 2009: Completion date: 2012; Cost: 545m.

December 2009: Economic impact study assesses the possibility of resurrecting shelved Tram Line 3 to the ERI.

January 2010: Reports suggests costs of the project will soar to about 600m.

March 2010: It emerges Bilfinger Berger has proposed delaying completion until 2014, as fears rise that the route may be scaled back.