Tram firm axed as council admits it should never even have existed

COUNCIL leaders in Edinburgh have admitted it was a major blunder ever to set up their own transport company – as it was confirmed it will be consigned to the scraphead.

Around half of the 60 remaining staff at Transport Initiatives Edinburgh (Tie) are set to lose their jobs almost immediately under plans to bring the project under the control of the city council and the Scottish Government.

The hugely damaging dispute between the city council, its tram firm and the contractors was finally brought to a halt yesterday, the day after the Scottish Government intervened to effectively take control of the project.

The only senior figure at Tie expected to survive the cull is chairman Vic Emery, who was only appointed in January. He will chair a new project delivery group.

However, its work will be overseen by a new board headed by the council’s chief executive, Sue Bruce, who will lead efforts to resolve any future disputes in an attempt to avoid another lengthy legal battle.

All the main contractors will also get a place on the new board, with independent consultants on stand by to rule on any possible conflict over delays and cost increases.

Insiders say lawyers were involved “almost immediately” in previous disputes with Tie officials at constant loggerheads with the contractors, often without the knowledge of the council.

Another new firm of consultants, Turner & Townsend, is being brought in to project manage, while up to five staff from Transport Scotland will be working on the tram project as part of a deal with the government to hand over the remaining £72 million of its funding for the scheme.

The government is to be compensated by the council for the cost of its staff being involved, although the council has insisted this will not see the new £776m cost of the tram project increase.

Tie was set up more than ten years ago to oversee a host of major transport projects in the capital, including a road tolls scheme and a rail link to Edinburgh Airport, both of which have since been abandoned. It has had 80 staff as it has overseen the tram project in recent years, but this figure has been reduced to 60 over the past few months.

Its demise was confirmed by the council as it announced the “green light” for major tram works to get back under way again in the city.

An official statement said: “Transport Initiatives Edinburgh will cease to exist as an operating entity with its previous functions executed by the council, supported by Turner & Townsend.”

City transport leader Gordon Mackenzie said: “With the benefit of hindsight Tie should never have been set up. It is obvious now that they were not up to the job of running a project like the tram.

“With something like this it really should have been taken forward by Transport Scotland, as it has done with other major transport projects around the country.

“Transport Scotland were on the board of Tie back in 2007 but were not in charge of the project. It would have better if they had, instead of Tie. We are glad to have their expertise on board now.”

Meanwhile, council leader Jenny Dawe has admitted a public inquiry into the tram project may have to wait until the first phase of the scheme is up and running – to avoid it becoming a “distraction”.

First Minister Alex Salmond has agreed to an inquiry although it is unclear if it will happen while building work is ongoing, as happened with the investigation into the Holyrood parliament.

Ms Dawe said: “I’m not sure right now is a good time at all. An inquiry is going to involve a huge amount of preparation and work, it will be a hugely onerous process and I don’t think it would be helpful to have a distraction like that at the moment.”

Major tramworks will get under way in Princes Street on Monday, with a full programme of work expected to be confirmed within the next few months.