We dug ourselves into a hole over trams fiasco, admits senior official

A SENIOR official at Edinburgh City Council has admitted the authority made a “big mistake” by agreeing to shoulder the burden for problems with underground tramworks when the contract for the troubled project was being drawn up.

Dave Anderson said he expected the public inquiry to find that the construction consortium should have borne the risks involved with digging up the city’s streets, rather than the local authority’s tram company.

His comments emerged the day after Gordon Mackenzie, the councillor responsible for the project over the last four years, admitted he and his fellow project board members had lacked the “expertise” to properly scrutinise the scheme.

However, Mr Anderson, the council’s director of city development, said he did not believe Edinburgh would suffer long-term reputational damage from the project, which he compared with the Sydney Opera House, claiming that the capital had almost made a full recovery from the impact of the financial crisis in 2008.

Addressing business leaders in the capital yesterday, he said he was “confident” the council would press ahead with delivering a full tram line to the city’s waterfront, despite the lack of current funding, while he insisted further lines would also still be developed.

Mr Anderson also said there was a stronger economic case for building a tram line from the city centre to the Edinburgh Royal Infirmary and the city’s bioquarter at Little France than for the Border Railway.

Mr Anderson, the most senior transport official, was appointed by the council in the spring of 2008, just weeks before the crucial construction contract was signed off, replacing Andrew Holmes after he retired from the £110,000-a-year post.

Both figures are expected to be called to give evidence at the public inquiry into the tram project, which is running at least five years late and is now £400 million over budget.

The council’s tram firm, TIE, was locked in a costly dispute with the German-led consortium, Belfinger Berger, for more than two years amid wrangles over delays to utility works and the scale of problems discovered underground.

TIE – whose senior figures accused Bilfinger Berger of trying to hold Edinburgh to “ransom” – went on to lose a string of independent adjudications over the contract. The cost of delivering the first phase has soared to £776m, compared with a price tag of £545m 12 months ago.

Mr Anderson said: “With the benefit of hindsight about the complications with the utility diversions, it would have been preferable to have had the risk borne by the contractors.

“It was a big mistake with the contract that the client [TIE and the council] was responsible for any risks. They were able to make claims about the utility works, which caused delays and additional costs.”

Mr Anderson said the council had every intention of building the full tram line from Edinburgh Airport to the waterfront, insisting the city faced “gridlock” if it did not create a proper rapid-transit system to accommodate predicted population growth.

Meanwhile, opposition councillors expressed amazement at the admission by Mr Mackenzie that TIE’s board did not have the right technical expertise.

Labour transport spokeswoman Lesley Hinds said: “He has been on the board of TIE for at least four and a half years. We have discussed the tram project on many, many occasions. It is the first time I have ever heard him say this.”