The full City of Edinburgh Council meet on Thursday at 10am. Trams are on the agenda for the first time since June and this is the latest update from Mandy Haeburn-Little, Director of communications and customer services at Edinburgh  Trams:-

As part of our commitment to keeping you up to date with how the project is progressing, I am keen that you be made aware of the City of Edinburgh Council report about the tram project that has been released this afternoon. The report will be presented to the Council Meeting next Thursday, 14 October.

The report includes good news about a refresh of the 2007 Final Business Case and concludes that the option to deliver tram line 1A in phases is viable and enables Transport Edinburgh Ltd (TEL) to be profitable from day one. It also draws upon revised modelling of tram patronage figures which take account of the economic downturn and the likely need to phase the operational delivery of line 1A.

The report sets out the next steps towards the creation of a publicly-owned integrated transport system to underpin the city’s vision for sustainable economic growth and prosperity, through the integration of Lothian Buses and Edinburgh Trams and highlights that the work to bring the two companies under one organisational structure will be undertaken over the next nine months under the leadership of Richard Jeffrey as Chief Executive (Designate) of TEL and Ian Craig as Chief Operating Officer (Designate). This follows the outline structure endorsed by the Council (through the Chief Executive) around two years ago.

On this our Chairman, David Mackay, commented: “I believe that in the past there was a mistake made in merely labelling the tram and the future of the public buses as transport – this is all about Economic Development. It is as simple as that. We know that the City needs a solution; we know that the City will expand and we know that environmentally there must be a solution to create a green and sustainable future for the Capital City.

No-one regrets more than I the inconvenience that the dispute has caused, however, for the people of Edinburgh, these appointments mark progress and achievement and a vision of the future and that is most definitely something to be celebrated.”

Finally the report provides a summary and some additional detail on the latest developments in the rigorous efforts being made by tie ltd, on behalf of the Council, to resolve the contractual dispute facing the project.

Cllr Gordon Mackenzie, Transport Convener for the City of Edinburgh Council, said: “The contractual situation we are currently facing is hugely frustrating and I, along with everyone else, would like to see a resolution as quickly as possible. The challenge we face has implications beyond how we manage public transport, as an efficient and effective infrastructure is vital to our economic prosperity. However we must ensure that whatever the outcome is, it represents the best value we can achieve.”

The full report is now available on the Council website.

Thank you for your support and patience during this time, I will continue to keep you as fully up to date as possible over the coming weeks and months.

The report which the above letter refers to is indeed available on the City Council website. You may read it by going to the Council page here and clicking on  item 8.1.

We have read the report in an effort to bring  you a synopsis of it. It is not the easiest of reads. It contains jargon and phrases which all have certain legal definitions. We try here to translate into plain English some of the main points for you.

Tram Business Case Refresh – Perhaps best expressed as ‘what we might have decided then, if we knew then what we know now.’

Commercial disputes with the contractor – ‘Bilfinger Berger have completed some of the work and have advised an increase in the cost. We are still discussing this with them.’

Final Business Case – no really clear idea how to translate this one

Incremental delivery – this means that parts of the tram project might be delivered before others.

Patronage assumptions – what might happen if a certain number of people use buses and pay fares

First Phase – St Andrews Square to Edinburgh Airport

Key affordability risks – money the council will have to pay even if it was not previously budgeted for.

“The tram remains an important stimulant to development and regeneration in the West and North of Edinburgh.” That is probably quite correct, but it depends on the tram actually being delivered, and it  probably depends on the whole tram project being delivered – particularly if you have a business on Leith Walk.

“the detailed figures must remain commercially confidential” – we cannot tell you with any certainty what the actual figures are……

We could go on but it might not help you with your reading enjoyment or indeed your understanding of the position. So what facts can we help you with?

BSC consortium is (Bilfinger Berger, Siemens and CAF). BB are generally perceived as the bad guys.

Edinburgh Trams Limited – responsible for delivery of trams – known as tie (transport initiative Edinburgh) Tram route should be 18.5km from Edinburgh Airport to Newhaven calling at 23 stops.

Tram project announced in March 2003 – estimated cost £375m.

Tie entered into two contracts worth £240m with BSC:- firstly, MUDFA for diversion of utility pipes and cables – almost 100% completed, albeit behind schedule – cost increased by 25% owing to the number of pipes etc resited and secondly, INFRACO for provision of the tram infrastructure i.e tracks Under half the total spend is for infrastructure – so utility work is the more expensive part.

According to this week’s report about 1/4 of the infrastructure work has now been completed.

16 of the 27 tram vehicles have now been completed – thus 60% complete.

85,000 – the number of people who come into the city to work each day as per the 2001 census.

100,000 – the number of people who now come into the city to work each day.

48,000 linear metres of utiities have been diverted. (27,000 linear metres were budgeted for.)

12% of total budget relates to purchase of land required for the tram project.

21% of total budget relates to project management and ‘other project related items’.

£381m has been spent on the tram project to date.

£545m was budgeted for the whole project. A further 10% has been requested for ‘contingency planning’ and the Council believes it may be possible to borrow against the future profits of Trams Edinburgh Limited to pay for this additional amount.

£25m was supposed to come from developers’ contributions, as part of their planning conditions. It has not been paid – yet. It might be paid in future as and when key areas along the tram route are developed.  If the tram route is stopped at St Andrew Square then the £7m which has been paid by developers in Leith and Granton might have to be funded by the council. One particular and notable player in this part of the game is Forth Ports which refuses to pay.

36 people appear to have been paid off by Bilfinger Berger in recent weeks.

£21.9m of additional payment was demanded by the consortium BSC but agreement has been reached with the council at £9.5m. (this has been reached by alternative dispute resolution – ie by discussion and not by court action, so a much cheaper process)

The report  does not divulge some parts of the discussion between the council and the consortium as these are matters of ‘commercial confidentiality’ – and that even though the contract itself might already have been broken by the contractor.

tie does not at this time offer any alternative way in which the tram project might be completed. It might do by the time of the December council meeting – maybe.

Richard Jeffrey, the current CEO of tie, is being proposed as the new CEO of the integrated tram and bus network and Ian Craig will be the Chief Operating Officer. There will be no consequent changes to existing salaries.

The report concludes that even if the tram is only running between St Andrew Square and the Airport it still merits all the investment in the project. In June 2010 a report was presented to the Council containing this memorable sentence:-“There has been no real breakthrough despite several months of negotiations to restore real momentum to the project.”

Here we are some 4 months later – and it really must be the question on everyone’s mind – what progress has been made in that time? Of course the council cannot really tell us as they are clearly nervous of being the party which breaches the contract. So essentially the report to this week’s council meeting is in fact much the same as the one prepared for the June meeting.

It is simply that we are four months further down the line.


  1. As I understand it, the Trams Update can be summarised as follows:

    1. We might only build the tram to St Andrew Square.
    2. But we don’t know how much it is going to cost.
    3. And if you combine Lothian Buses and the Tram the service will be profitable… no, make that viable.
    4. But we’re not going to tell you how we proved that.
    5. And we don’t know when the tram will go to Leith.
    6. But we’re not going to think about it until December.

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