'Get on with tram work or we'll sue'

THE construction firm at the centre of the cash wrangle threatening to derail Edinburgh's troubled tram project has been ordered to start work in Princes Street or face massive compensation claims, The Scotsman can reveal.

Officials running the capital's 512 million scheme are said to have demanded "immediate" action from Bilfinger Berger and warned of legal proceedings if it refuses to budge.

The company's UK division has been issued with the edict by Edinburgh city council's tram company, TIE, amid growing concern over the future of the project, said to be running up to a year behind schedule and tens of millions over budget.

Council officials are expected to be asked to produce a dossier on the cost of cancelling the scheme. Steve Cardownie, the council's deputy leader, revealed the surprise move, which has come in the wake of growing concerns from politicians at Holyrood and Westminster that the project is running out of control.

However, sources close to the project say the cost to taxpayers of cancelling it in the next few months could run to almost half the overall budget, even though no rail has yet been laid.

Mr Cardownie said he wanted to see a report within the next fortnight so councillors could come to an informed decision.

The fate of the project would still have to be decided in the Scottish Parliament – and at least 200 million is thought to have been spent so far.

Mr Cardownie's intervention is likely to infuriate officials at TIE, who are banking on Bilfinger backing down by the end of this week.

A source close to the project said TIE was determined to "turn up the heat" on the contractor, which has a 120 million share of 240 million of work to carry out major infrastructure work along the tram route.

The insider said: "Bilfinger in the UK has been told to get people on site right away and that there is no justification for any further delays.

"TIE firmly believes it is within its rights to demand that Bilfinger meets the terms of its contract and it has warned Bilfinger its lawyers are looking closely at the implications of work not starting."

Bilfinger Berger UK is the British infrastructure arm of its German parent company, based in Mannheim.

A spokesman for Bilfinger last night insisted no work would get under way until TIE had agreed to meet a whole host of conditions linked to utility work running behind schedule.

He said: "The client can ask again and again. It will not make any difference until we can reach some form of agreement. But there's no question work could get under way within days."

Mr Cardownie, who described reports the council could sell off its bus company to bail out the tram scheme as a "non-starter", said he would seek the backing of councillors for a full audit of the tram scheme and the implications of pulling the plug.

He said: "I hope the ongoing negotiations are successful and we see work getting under way on Princes Street, but it is only right that we get full information on how much has been spent on the project and what the implications would be of scrapping the project.

"It may be that a new contract comes in lower than the last one. If we have to bring in another contractor, it could take another nine to 12 months."

Tom Buchanan, the council's economic development leader, said the council was taking advice on whether it would breach its contract with Bilfinger if it reversed traffic diversions and reopened Princes Street.

The show will go on, insist Festival fireworks chiefs

ORGANISERS of the Edinburgh International Festival yesterday pledged its annual fireworks spectacular would go ahead this year – despite the prospect of tramworks leaving large parts of the city centre out of bounds.

The long-running show will be staged in its usual slot, on the final Sunday night of the Festival. But The Scotsman can reveal sections of Princes Street may be closed off for the event, leaving the council and police with a big logistical headache.

Safety officials have given fireworks organisers the green light to allow tickets to go on sale within the next few weeks. However, it is likely to be several months before it is known how many people will be allowed into Princes Street. Its south side may have to be completely blocked off.

About 12,000 ticket-holders normally descend on Princes Street Gardens, while a further 250,000 take up vantage points in the city centre. A Festival spokeswoman said: "When clear and accurate information is available on the extent of the tramworks, we'll let everybody know of any recommendations to make their experience as enjoyable as possible."