Multi-million cost to scrap the trams

CANCELLING the tram project could land Edinburgh with a bill running into the tens of millions, it emerged today.

It is understood that pulling the plug on the project would leave the city council liable for all costs involved in tearing up contracts and laying off staff.

However, it was not immediately clear whether money received from Transport Scotland, a sum currently around 350 million, would have to be paid back. The news comes after the SNP said it would push for a referendum on scrapping the project should a breakthrough not be made in the ongoing dispute with contractor Bilfinger Berger.

A council document released prior to the start of work clearly states that cancelling the project for anything other than "purely commercial reasons" would leave the council liable for the "full cost of that decision.".

The report also identified costs of 8m to 10m for compensation to contractors and staff at TIE who would lose their jobs, a sum which is likely to be further swelled by any legal dispute with Bilfinger Berger.

Councillor Jeremy Balfour, leader of the Tory group in the city council, said the lack of information about the project was frustrating attempts to take decisions about its future.

He said: "Clearly, we are concerned about the cost and delays and the Edinburgh taxpayer needs to be our priority. Until we get the full facts we can't make any decisions."

And Shirley-Anne Somerville, SNP MSP for the Lothians, called on TIE to lift "gagging restrictions" preventing its contractors putting their side of the story.

She said: "Time and again I've called for full information about the trams project to be made public, but repeatedly these calls are rejected.

"It's about time the people of Edinburgh got to hear both sides of the story so they can make up their own mind."

According to sources close to the construction consortium, Bilfinger Berger is currently owed around 16m for work on Princes Street and elsewhere on the project.

Any decision to sack the company is likely to involve a costly court battle, while scrapping the project altogether would leave the council liable for failure to honour contracts.

A council spokeswoman said: "Cancellation of the project is not an option we are considering."

A spokesperson for Transport Scotland added: "Edinburgh City Council would be obliged to advise the Scottish Government of any proposal not to complete the tram project, and the implications of any such proposal would be considered carefully."