Alistair Macleans
Uncategorized July 30th. 2010, 10:33amAlistair Macleans
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Edinburgh Trams, the Costly Farce Goes On
Members of Scotland's parliament have been questioning executives from Edinburgh City Council over concerns that it has become overwhelmed by the tram project.
The project that began in May 2008 when final contracts to build the tram system were awarded to BSC, a consortium of Bilfinger Berger/Siemens (BBS) and tram builder CAF, and construction of the tram infrastructure commenced. Bilfinger Berger was awarded a €190m contract in May 2008 to build the core section of the 18.5km line, including numerous bridges and supporting structures.
The senior council executives have joined Richard Jeffrey, chief executive of tram company, and city-council owned developer "transport initiatives edinburgh (tie) at Holyrood's public audit committee.
They are being quizzed over the Auditor General for Scotland's concerns the project faces delays and extra costs. The £545m tram project has been subject to setbacks following disputes between German contractors Bilfinger Berger and city council owned developer tie.
The council and its council-owned tram company received heavy criticism at last month's audit committee, with Members of the Scottish parliament fearing they had become out of their depth in a project that has made little progress despite spending nearly four-fifths of its budget. They also questioned whether tie was "equipped" to manage Scotland's fourth largest public sector project, or resolve the protracted legal dispute.
The committee is hearing the views of Edinburgh City Council chief executive Sue Bruce, director of finance Donald McGougan, director of city development Dave Anderson, and head of legal and administrative services Alistair MacLean. Meanwhile, Auditor General Robert Black has recommended that the Scottish government agency Transport Scotland be given greater oversight of the project.
Lothian's MSP Shirley Anne Somerville asked whether Edinburgh Council intended to ask the next Scottish Government for more money to complete the project.
Edinburgh Council director of finance Donald McGougan said that while Government money "was not part of the contingency plan at the moment", they would "explore any avenue" if more cash was required.
His options included approaching the Scottish Futures Trust, the system introduced by the SNP Government to finance the construction of large public projects, or national transport agency Transport Scotland.
The Bilfinger Berger the German engineering company charged with overall building of the line have revealed that 72 per cent of the construction work remains with just 38 per cent of the budget left. Edinburgh Council has not ruled out asking for more public money to complete the project.
The Scottish Government has capped its investment at £500 million, with Edinburgh Council responsible for finding the extra £45m envisaged in the original budget.
The council is already taking steps to push its contribution up to £100m to cover additional projected costs, but council executives have admitted they currently have no idea how far the total of £600m will stretch.
Relations between the parties on the project are so bad that the ex chairman of Edinburgh's beleaguered trams project, David Mackay in an interview with The Scotsman newspaper told the newspaper: "Bilfinger Berger was a delinquent contractor who scented a victim, who probably greatly underbid and would use the contract to make life extremely difficult for the city. And they have done exactly that."
The main contractor on the project, Bilfinger Berger, has now said it was considering legal action against David Mackay for "publicly discrediting" the company.
"Bilfinger Berger's behaviour in the Edinburgh tram project has complied with the contract", said Bilfinger Berger executive board member Joachim Enenkel. "We have consistently presented the client with constructive proposals to solve his problems. To then be publicly insulted and a slandered show just how out of his depth the now departed client representative was with a project of this size. We see the change of management on the client side as an opportunity to finally move forward with this project in an orderly manner."
Mandy Haeburn-Little, director of customer service and communications for Edinburgh Trams, retorted that Bilfinger Berger's statement was "nothing less than farcical" and was "a deliberate misrepresentation" of the dispute between the two parties.
She said of the contractor: "Here is a company who made a premeditated and very personal attack on David Mackay, relaying this attack widely to press and media and, unbelievably, also writing to many councillors through an open circular. When faced with our robust legal defence, they not only sought to back down, they actively tried to distance themselves from defending their challenge in open court. We are concerned about the gulf between the press statements and the facts as presented by Bilfinger Berger.
In an attempt to broker a peace deal last minute mediation n talks are due to begin next in March. However, if negotiations fail, which they may well in the present poisoned atmosphere, the dispute could move into litigation, thereby pushing up costs and timescales further down the road.
To add to this litany of problems Edinburgh City Council has conceded for the first time that it will need to provide extra air quality monitoring after months of pleading from families concerned for their health.A new series of air quality tests are to be carried out as residents claim pollution is at dangerous levels because of traffic rerouted for the construction of the tram system.
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