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Sat September 26 2020

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Edinburgh tram work restarts under government supervision

15 Sep 11 Work is to begin again this month on completing Edinburgh’s tram line after a mediation deal was reached by the council and its contractors.

The original client is being wound up and its functions transferring to the council, supported by Turner & Townsend. However, the Scottish government is stepping in to help oversee the final delivery of the Edinburgh tram project, putting its own team in place to work alongside the council’s team.

Resumption of work follows the signing of a settlement agreement between the City of Edinburgh Council and the Bilfinger Berger/Siemens/CAF consortium contracted to build the tram line from the airport to York Place. The deal–details of which remain commercially confidential - was confirmed today (15 September) after negotiating teams worked through the night to finalise and sign the paperwork.

Negotiations have been underway since both parties entered into a formal mediation process in March resulting from a contractual dispute.

Remedial work on Princes Street is already scheduled to begin this month while the timetable for other works will be announced shortly. The revised timescale for completing the line from Edinburgh Airport to York Place is summer 2014.

Scottish government ministers have also confirmed that the remaining £72m Scottish government grant will be reinstated to the project now that the route to St Andrews Square has been restored.

Cabinet secretary for infrastructure and capital investment Alex Neil announced that a team of four or five experienced project managers from Transport Scotland will fill key senior roles in the new governance structure with City of Edinburgh Council.

The Transport Scotland team will work with the council’s own team to provide managerial and technical assistance. Mr Neil said that the move would “bring the professional approach” that has seen major projects such as the M74, completed ahead of schedule and under budget.

As part of the agreement with the City of Edinburgh Council (CEC), ministers will have the power to direct strategic project decisions. Ministers will also be given regular progress updates from the project team.

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Mr Neil said:  “The Scottish government did not back the trams project when parliament voted on it in 2007, and we share the frustration of many people in Edinburgh over the way the scheme has developed since then.

“We made it clear two weeks ago that we were no longer prepared to commit further public money to a route which was not financially viable and which did not deliver the link to the city centre which people rightly expected.

“However, now that that link has been reinstated, it is vital that the remaining stages of the trams project are delivered on time and within the £776m budget that we are advised by CEC is needed to complete the route to St Andrews Square by summer 2014. That is why today I am announcing that senior management from Transport Scotland will now help complete the trams project.”

He added: “The Scottish government has a strong track record, through Transport Scotland, of delivering major projects like the M74 early and under budget and secured significant savings on the three contracts to deliver the new Forth Replacement Crossing.

“As part of the arrangements put in place today, ministers will receive regular updates on the progress of the project, and will also retain a veto over strategic decisions in respect of remaining government funding.

“We must make sure that we work as closely as possible with those who will be affected and make sure that the impact of the work is minimised for Edinburgh businesses and communities.”

Edinburgh council has calculated that the overall budget for the project is now £776m, comprising a base budget of £742m and a risk allowance of £34m. This increase of £231m above the original project budget of £545m will be funded through the council’s prudential funding facility.

The Scottish government said that among problems to be resolved were more than 700 separate instances where utilities may be in conflict with the project design – some even after they were diverted as part of the earlier utilities diversion works contract. 

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