Edinburgh flood defence costs soar to £30 million

The Water of Leith defence scheme is set for completion later this year after a dispute with the private firm contracted to carry out the work.

Edinburgh City Council had put aside £17.8m – £11.5m for construction with the remainder for design and compensation – for the first of three stages. However, mediation and unexpected delays of more than a year have pushed costs upwards.

Critics claim that an ambiguous contract drawn up by lawyers at Scotland’s second largest local authority led to a dispute with contractors Lagan Construction, in a near-repeat of the row with the German firm Bilfinger, which caused huge delays to the Edinburgh trams route.

Extra funds of £1.1m will also have to be found to cover compensation for homeowners, a huge rise on the £229,000 originally estimated.

Overall costs now stand at £23.5m for construction and £29.1m in total.

The scheme was initiated after about 500 properties were flooded in 2000, causing an estimated £25m of damage.

Joanna Mowat, transport and environment spokeswoman for the Conservative opposition group on the Labour-SNP council, said it was clear that, as with the tram project, the contract had let the scheme down.

She said: “This is another embarrassing hangover from poor contract construction, where we have had to go back and renegotiate with a contractor.

“We need to look at exactly how this happened, and why we keep getting unfavourable contracts, because it’s not delivering value for the taxpayer.”

Homeowners have been keen to see their properties protected but many have claimed the project, which includes large metal “demountable barrier systems”, has been “over-engineered”.

Bill Sinclair, 77, of Stockbridge, has previously said last year the project was not necessary on its current scale.

“I had to leave my house for ten days while the pile-driving was going on,” he said.

“The whole building was shaking. Ornaments were falling off shelves. This wonderful house has sat here for 180 years and within a matter of weeks there were cracks in the walls and I can’t open the door properly. The stress has been unbelievable.”

Nigel Bagshaw, Green councillor for the area, said: “This project has been subject to over-engineering, in terms of the environmental cost – with the number of trees cut down, the financial cost, and the impact on peoples lives.”

Paul Edie, the leader of the Liberal Democrats said that lessons had to be learned.

He said: “This is another project where we have made a similar error to the trams, although not on the same scale, with regard to the signing of the contract.”

Lagan Construction were not available to comment on the final costs or dispute settlement with the council , but the report to councillors said one of the issues they had raised concerns was the condition of the ground they had been instructed to build on in the Warriston area.

Originally the project was scheduled for completion by autumn 2012, but there had been fears had that the first stage of the project would not be completed until 2014.

Council chiefs insisted that construction work would now be finished next month, and reinstatement to the damaged gardens of homeowners by 31 August this year.

Lesley Hinds, the city’s environment leader, said: “The mediation process has come to a conclusion, enabling the scheme to move forward, with cost and time certainty.

“Revised governance arrangements are in place to ensure that the problems that affected the first phase are not encountered during the remainder of the project.”