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THE Scottish Government has stepped in to effectively take control of Edinburgh’s troubled tram project. Ministers confirmed they would now oversee the long-delayed scheme and bring in their own experts to try to get the trams running by 2014.

For the first time, government agency Transport Scotland will be able to direct key decisions and overturn council votes on the project. The move came weeks after ministers withdrew £72 million in funding for the project after the council voted to cut short the tram line at Haymarket.

The move to “help” the council is a major climbdown for Alex Salmond’s administration at Holyrood, which has tried to wash its hands of the increasingly beleaguered project since winning power in 2007. The trams are more than three years behind schedule and have gone at least £200m over budget in that time.

Opposition politicians said the SNP’s decision to take a firm grip on the project was long overdue and that the Nationalists’ failure to get involved until now had been responsible for many of its woes.

Transport Scotland was pulled out of an advisory role on the tram project in 2007 and the government refused demands to intervene in the scheme until late last year, when it demanded the council enter into formal mediation talks to break a lengthy deadlock with contractors working on the project.

The Scottish Government – whose ministers are to receive fortnightly updates on the project – has won a power of veto over key decisions and is moving up to five staff from Transport Scotland into the council’s headquarters under a deal that will see the local authority receive its full £500m grant for the project. Transport Scotland director Ainslie McLaughlin will sit on a new project board.

However, ministers claim the agency’s involvement stops short of a full take-over. They say they will not take complete responsibility for the project, even if costs increase, declaring: “The buck stops with the city council.”

They have again refused to provide any extra funding although they did agree to provide the £72m still due to the council – despite the first phase of the project now only running as far as St Andrew Square rather than the waterfront. But infrastructure minister Alex Neil insisted having the power to “direct strategic project decisions” would help keep costs down. He said the government believed there was no need for the cost of the tram line to rise above the current price tag of £776m.

He said: “We are where we are. We were not in favour of this project when parliament voted it through in 2007 and we were morally obliged to award the funding after that vote.

“Given that so much money has been spent on the project, it’s vital that the route is completed from the airport to St Andrew Square in time for the first trams to run in the summer of 2014.

“We believe this can be delivered for the new £776m budget and we believe that should be the final budget.

“We are going to take a much more pro-active and hands-on approach to ensure that the remainder of this project is delivered on time and within the available budget. But the buck stops with the city council. It is their project.”

Mr Neil said Tie, the firm set up by the council’s previous Labour administration to oversee the project, effectively no longer existed, under a shake-up that would see senior council officials take overall charge.

Those officials were still in talks last night with the German-led consortium building the tram line, however it is understood an agreement has been reached to draw up a new contract so the first line now stops at St Andrew Square.

Council leader Jenny Dawe said it had been agreed with the government that it was better to have a “closer relationship” over the trams in future. She added: “We have a joint interest in ensuring a clean, green and efficient transport network is delivered in Edinburgh and our new working arrangements are a logical extension of the discussions we have had with them.”

Council chief executive Sue Bruce said: “The delivery of Edinburgh’s trams remains the council’s responsibility and we are putting in place new arrangements to ensure that there is the best possible governance and operational oversight of the initiative. That will be complemented by the technical, project management expertise, and experience that Transport Scotland offers.”

Mr Neil defended the government’s decision not to intervene until now, saying it would not have handled the situation any differently in hindsight.

He went on: “The fact is that Audit Scotland gave the tram project a clean bill of health in 2007, just before it was voted through by parliament. There was no need for us to be involved. We did not wash of our hands of it.”

There was a mixed reaction to the second government intervention in the space of two weeks, with many MSPs welcoming the move, although there was criticism that the SNP had been “dragged kicking and screaming into sorting out a shambles of their own making”.

Lesley Hinds, Labour’s transport spokeswoman on the city council, said: “Transport Scotland should never have been taken off this project. The reason the project received a clean bill of health in 2007 is because they were still involved with it at that point.”

Scottish Labour leader Iain Gray MSP said: “The SNP government abandoned this project four years ago out of petulance at losing the vote in parliament. They left it to their SNP colleagues at the council, who then made a complete mess of it.

“This is a flagship project in Scotland’s capital and it is a disgrace that the SNP government has had to be dragged kicking and screaming into sorting out a shambles of their own making. They have let Edinburgh down badly.”

Scottish Tory transport spokesman Jackson Carlaw said: “The SNP doesn’t fool anybody. They took Transport Scotland out of its overseeing role in the first place and the consequences are there for all to see.

“Nobody is fooled by the SNP pretence that the trams fiasco has nothing to do with them. Kenny MacAskill was its biggest fan. The SNP government signed the cheques. They removed Transport Scotland and its expertise from the project in the first place and SNP councillors signed the contracts.”

Jim Hume, transport spokesman for the Liberal Democrats at Holyrood, said: “It is somewhat regrettable that the SNP refused to get involved before now.”

Edinburgh Western SNP MSP Colin Keir said: “The people of Edinburgh have had to deal with an unprecedented amount of frustration since the tram scheme began, and the mismanagement of the project has only added to it.

“By bringing in experts from Transport Scotland, I am confident this scheme – which the SNP opposed from the outset – will finally be delivered and the nightmare will finally be over.”