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Edinburgh Trams Project - Council could have to repay £500 million

Submitted by actionman on Wed, 2 Mar '11 11.29pm

STV News came up with some startling news - that the capital city might have to repay up to £500 million if it is unable to complete the ill-fated trams project. The statement by Ainslie McLaughlin, the Director of Major Infrastructure Projects at Transport Scotland, must have landed like the proverbial bombshell on the City Council.

His statement indicated that this requirement could technically be enforced if the Scottish Government, through Transport Scotland, were dissatisfied with the way that the project has been handled. He apparently added, "I'm not pretending that this would not present a challenge for the council". This must qualify as one of the most classic pieces of understatement ever to be made by a civil servant!

But why are the Council in such a shambles? They have clearly failed to keep a check on spending by Transport Initiatives Edinburgh (Tie) as elsewhere it is reported that some £6665 has been spent on "team building" exercises by the 'arms length' company.

As Tory MSP Gavin Brown said,  "In this difficult economic climate it is vital that every pound of public money is spent wisely.  The trams project should be no exception and people will question whether spending £5,000 on team-building is value for money.   My constituents would like to see more tram building than team-building".

It would seem that with a currently admitted shortfall of at least £50 million, the forthcoming mediation talks with the German contractors will have to succeed, otherwise Edinburgh City Council really will be heading for bankruptcy.

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Having to repay the 500 million pounds is probably the lesser of the Council's worries. Can you see the government calling ECC on it? I very much doubt it.

As more and more incompetence is discovered on the part of the Edinburgh City Council and Tie, it would be foolhardy to rely on a future Scottish Government not losing patience with a bunch of incompetents and seeking to draw a line under the whole shocking debacle.   Of course, what was not mentioned in the initial article, is the unknown amount that Tie will have to pay the German constructors for their failure to honour the contract in full when the work stops short of the original destination in Newhaven.   All the remaining money is probably vulnerable to a legal case against the Council and Tie - this is why the 'mediation' exercise is so crucial for the Council and Tie to keep the project alive.

I don't thin k they will have to pay the money back because they couldn't..and the Government know that.

But all the same it is a colossal mess and a line needs to be drawn under the project and fast.  There have been too many visits to the Last Chance Saloon and the £600M amount being discussed as being needed to get the project even as far as St Andrew Square, is £55M more than the entire total project was to have cost.

Of course we all know that getting to St Andrew Square will cost far more than £600M and that is just another 'absolutely final' amount that they are using in a desperate attempt to get something they can call a success....an amount they know will not be enough even as they are saying it.

The state of the outside world seems to have no effect on the cash burners in City Chambers, they don't seem to understand that the public finances will be in near crisis for years yet not just a few weeks---the time has come to recognise there really is not a penny more for a project for which the only people have enthusiasm are those whose own highly paid jobs and political ambitions depend upon it.

If the Consortium say they can build a line from the Airport to Haymarket station, with an interchange there, the Council should bite their hand off!

I know there's been a lot of talk about Haymarket being a potential end point, but I would have thought the buiness case would evaporate if there wasn't a continuous line from the airport to St Andrew Square.

What tie has been doing for some time, together with the Council, is carefully massaging the business case to try and make it appear that there is still some kind of economic benefit of having the tram at all - whether it runs to St Andrew Square or to Haymarket.   But the economic downturn and the considerable scaling down of the financial sector in Edinburgh was the death knell for the tram Business Case.   The Newhaven and Leith developments have stalled and it could be between ten to fifteen years before these start again.

To be honest I simply do not see the tram being a popular mode of transport when less than a third of the capacity will actually be able to have a seat!   There will be a certain novelty when they are introduced, but they are not nearly as convenient as the excellent bus service.   Of course, if the trams do not get to St Andrew Square all businesses, like Harvey Nichols, will demand that their "tram development tax is refunded by the Council !