Leith Business Association

The latest tram project status report has indicated that unresolved commercial issues will require to be resolved through the formal contractual dispute resolution process, as reported on the Transport Briefing website on 29 April:

Edinburgh tram dispute to require formal resolution

Once again, the City of Edinburgh City Council is claiming that commercial confidentiality prevents it from divulging details of the unresolved issues at present.

tie and BSC have set up a new project management panel to "reach commercial resolution on known issues of disagreement, wherever possible". However, the report warns "it is realistic to expect that some commercial issues will still need to be escalated to the formal contractual dispute resolution process". A review of project costs and risks is currently underway with the aim of reaching a revised commercial agreement by the end of June.

Despite recent reports that Carillion had completed more work than originally contracted (Tram firm does more work than planned), the Council has also been asked to approve an additional payment of £1.2m to Carillion because of changes and delays beyond its control.

The indefinite postponement of Line 1b will cost a total of £6.2m - £3.2m for the demobilization of BSC and a further £3m for design work already undertaken.

Stronger financial oversight is essential

With such large sums of money being paid out for no return, strong questions must be asked regarding the fiduciary management of this project by the City of Edinburgh Council and tie.  While it may be easy with the benefit of hindsight to question the wisdom of entering into this contract with BSC for Line 1b before the necessary funding was in place, the decisions appear to have been driven more by a desire to turn the tram 'line' into a tram 'system' than by prudent financial planning.

£6.2m invested along the tram corridor would have provided a much-needed lifeline for businesses adversely impacted by the construction works, or enhanced the visual appearance of the public realm.