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A clear way ahead and review of key player involvement needed for Edinburgh trams

Posted: 2 February 2011

The City of Edinburgh Council and the body set up by the council to deliver a tram system for Edinburgh, Transport Initiatives Edinburgh (tie), urgently need to establish a clear way ahead for the project. The Scottish Government should consider whether its agency Transport Scotland should become more actively involved.

An Audit Scotland report published today, Edinburgh trams interim report, looks at the project’s progress and costs to date and its governance arrangements. It does not include a detailed review of the various works contracts or express any opinion on the project’s management or the performance of any of the contractors involved. This would be inappropriate due to an ongoing contractual dispute between tie and the Bilfinger Berger Siemens consortium, which may be the subject of future litigation.

Chair of the Accounts Commission, John Baillie, said:

“Mediation talks between the City of Edinburgh Council, tie and the Bilfinger Berger Siemens consortium are due to take place soon. It is important that these talks are pursued and that all other choices including the consequences of terminating the contract are fully considered and evaluated. Public finances are tight and it is crucial that any solution must represent value for money.”

He added:

“Communication about the trams project could also be better. Public confidence in the project is extremely low. The City of Edinburgh Council and tie urgently need to better explain to the public how this complex project is progressing.”

The report says that most areas of the project have progressed significantly since work began in 2007. Utilities diversion works are 97 per cent complete and almost three-quarters of the tram vehicles have been built. However, due to the contractual dispute only 28 per cent of infrastructure work has been completed against a target of 99 per cent by the end of December 2010.

So far, £402 million has been spent on Phase 1a, which is intended to run from Edinburgh Airport to Leith Waterfront. This is 74 per cent of the total funding currently available. Until the contractual dispute is resolved, the total cost of completing the line cannot be accurately estimated, although it is clear that it will not be completed within the £545 million approved budget.

The Scottish Government is providing £500 million of the project’s funding through its agency, Transport Scotland. Transport Scotland monitors the way this money is spent through regular meetings with the City of Edinburgh Council, but the report says the Scottish Government should consider expanding its future involvement.

Auditor General for Scotland, Robert Black said:

“Transport Scotland has committed £500m to the trams project. Given this significant interest and its expertise in managing major transport projects, the Scottish Government needs to consider whether it should become more actively involved to help avoid possible further delays and cost overruns.”

He continued:

“It is very unusual to conduct an audit of a live project, but the Accounts Commission and I decided that an interim report was needed because of the public concern and the risks associated with the project.”

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