Sarah B: Keeping track of this fiasco is easier said than done

Unnecessary secrecy has undermined the Capital's troubled trams project, says blogger Sarah B

On February 23, 2011, the chief executive of Edinburgh City Council, Sue Bruce, in evidence to Holyrood's Public Audit Committee on the Edinburgh tram project, stated: "It is absolutely critical that we get the forthcoming mediation right" and spoke at length of the "absolutely huge amount of preparation" and recent efforts to build relations with the tram consortium.

The same day, the Evening News front page headline ran, "German Contractors blast 'spin' from tram bosses" and told of Bilfinger Berger's dismay at claims made by TIE, which formed the basis of the recent Audit Scotland tram report. It seems that, even if TIE and the council have reached a state of calm and reasonableness, the contractors still bear deep, personal wounds.

In 90 minutes of evidence to the public audit committee, the word, "mediation" arose 64 times. The impression was that the situation is desperate and all hope for the project rests upon the outcome of this process.

Although the disputed issues have been repeatedly described as "complex", they actually boil down to two simple facts: 1) the council has signed a legally binding contract with the tram consortium to build a tram line between Edinburgh Airport and Newhaven; and 2) it has insufficient money (and has secured no additional funding), to complete the works. With the council liable for construction costs over the 500 million Scottish Government grant, that is desperately worrying for local taxpayers.

How, in a few short years, has the tram project gone from being the "vital" jewel in Edinburgh's shining crown to a potentially catastrophic financial millstone round its neck?

The answer, again, is simple: over-optimism, arrogance, and a systemic failure on the part of professionals to protect the public interest and purse.

It was assumed that the UK economy would stay strong and voracious demand for property at the waterfront/Granton development would generate millions of tram passengers every year. Airport user numbers would dramatically increase and translate into eager tram users - indeed, such would be the demand for tram tickets, that Lothian Buses, the city's cherished transport workhorse, need have no fear of being lumbered with the responsibility of supporting perpetually loss-making trams. It was assumed that any shortfall in tram construction costs would be met by congestion charging which, despite being touted to a sceptical public as the funder of Tram Line 3, was always quietly earmarked as the means to cover the ever-significant funding shortfall for Tram Lines 1 and 2. Fears that underground utility diversions would be significant, complex and time-consuming were patronisingly dismissed with assurances that super-duper, high-tech radar technology had located all underground pipes; and, crucially, the public need not fear significant cost increases because risk had been transferred to the private sector under "fixed price" contracts.

Concerns were repeatedly raised with the council and the Scottish Parliament by ordinary members of the public who had scrutinised the project's supporting papers and identified its inherent risks. Such was the political vision of cutting-edge developments at the waterfront/Granton, served by a sleek, sexy tram that politicians appear to have failed spectacularly to scrutinise the tram project at any stage and simply relied on the advice of their officials that all was well. It has only been with the recent adjudications, which found largely in favour of the consortium, that a dawning realisation has taken place that Edinburgh may now face extremely lengthy and expensive consequences.

The army of private sector engineers, transport modellers, transport planners, environmental consultants, property experts, accountants and lawyers, having received protracted and generous recompense for their expertise, have also failed to ensure issues were resolved.

Audit Scotland, external auditor of the council and Transport Scotland in relation to the tram project, relied on those two organisations' information to prepare its recent report, which, despite precluding the views of the construction consortium, was considered by Sue Bruce to be "balanced". Indeed, Audit Scotland publicly expressed very few concerns about the project, its financial implications for Edinburgh, or the value-for-money aspect of the 545m (largely) public funding - despite Transport Scotland's recent admission that it is quite possible that the entire 500m government contribution could be spent without one usable stretch of tram line completed.

Whatever the outcome of mediation, it cannot be disputed that the Edinburgh tram project has severely dented public confidence in its elected representatives and officials, as exemplified by the sustained lively discussions on the Evening News website where there is general consensus that such expensive and avoidable mistakes are no longer acceptable or affordable. However, to change the current procedures would require measures which few politicians are likely to support.

Section 12.2 of the council employees' code of conduct, requiring all council employees to support the implementation of policy objectives, should be reviewed as, at present, if a policy is ill-conceived or potentially harmful to local interests, council professionals are unable to express concerns without fear of disciplinary procedure.

The ability to starve the public of its right to transparency under a cloak of "commercial sensitivity" should be reviewed. If a project cannot withstand the scrutiny of ordinary people, and supporting data is not sufficiently robust to quell legitimate concerns, then there should be no confusion that it is political ambition, rather than sound evidence, on which a scheme is founded and progressed.

Politicians should accept that they generally lack the appropriate expertise to fully understand the technical, financial and legal aspects of major projects. Their imperative to largely deliver a scheme between election dates may result in poor scrutiny and a reluctance to even acknowledge, let alone deal with, emerging issues.

The existence of publicly-owned project management companies, such as TIE, whose primary objective of self-preservation can conflict with the public's right to robust and balanced project reporting, should cease. Regular and rigorous independent scrutiny must be a requirement of all major infrastructure projects. Without that, the public is entitled to accountability from its elected representatives and officials.

Lastly, wherever possible, we must have a "Plan B" to ensure that, should a business case deteriorate radically, there is a fall-back option for politicians who, keen to save face, would be able to claim fiscal prudence by reverting to a less risky option.