Trams chief warns project 'definitely' going over budget

Richard Jeffrey, chief executive of tram firm TIE, is understood to have warned senior council officials that the project will now definitely go over budget.

He also revealed that just 18 per cent of so-called Infraco infrastructure work has so far been completed, when the figure should be 86 per cent by this stage of the project, senior sources told the Evening News.

The work involved includes track laying and building structures such as the depot at Gogar, but does not include work to divert underground utilities.

Yesterday, the Evening News reported SNP plans to call for a referendum on scrapping the tram project should the current deadlock with contractors not be resolved in the next few weeks.

It is now understood that council officials have been instructed to look at alternative funding mechanisms for the tram project after large contributions from property developers failed to materialise.

According to figures provided by transport minister Stewart Stevenson, more than 350 million – around two-thirds of the budget – has already been spent.

Sources close to the consortium said German construction firm Bilfinger Berger are owed 16m for work already carried out, money which is likely to include payments due to local sub-contractors.

One source said Mr Jeffrey had briefed councillors and senior officials, admitting that the project was running over budget.

The source said: "He said they had completed 18 per cent of the Infraco work, when it should have been 86 per cent by this point. They're way behind."

A spokesman from the tram project said: "We cannot comment on commercially confidential proceedings while in the middle of a dispute, and neither should anyone else privy to confidential information."

Meanwhile, the Federation of Small Businesses (FSB) today called for the plight of traders affected by Edinburgh's tram works not to be forgotten.

SNP Lothians MSP Shirley-Anne Somerville said: "Anyone walking around Edinburgh won't be surprised by these figures. It shows the project has reached a farcical stage. The council needs to get a grip and tell people what is going to happen in the long term."

Edinburgh Pentlands Tory MSP David McLetchie said the revelation showed the project was months behind schedule, adding: "People will despair that the project will ever be finished at this rate."

Meanwhile, the Federation of Small Businesses (FSB) today called for the plight of traders affected by Edinburgh's tram works not to be forgotten.

Michael Dixon, FSB Edinburgh branch chairman, said: "Before the tram works eventually resume again, the FSB are calling for assurances by TIE and the council about business compensation for loss of trade and what measures are planned to mitigate further damage as well as the reputation of the city as a place for people to visit."