A Public Inquiry into cost over-runs in the £776m Edinburgh Tram project has heard that the construction contract was an “extremely poor deal for the council” and “should never have been signed as it allowed the contractor to hold the council to ransom.”
The inquiry, which has so far cost £9m, is trying to establish why the original £375m estimate rose to £521m at contract signing, and then £776m to complete a cut-back scheme.
Lawyer Douglas Fairley, representing the council’s wholly-owned project company Transport Initiatives Edinburgh (TIE), added that the financial information contained in the contract was confusing and that the wording "encouraged disputes”.
It has also come to light that there ‘may’ have been a number of errors of judgement, which Mr Fairley accepted saying that such situations had come about as a result of “extreme difficulty created by others who either preceded them or in some cases were senior to them within the organisation”, adding that “nowhere was this more so than in the context of the contract.”
Referring specifically to the arrangements between the Council and the contractor, Mr Fairley said: “It was a terrible contract for TIE and, by extension, a terrible contract for City of Edinburgh Council.”
He also said: "It would be fair to say that any contract which left the door open to an argument by the contractor that something as basic and fundamental as the employer's requirements for the construction of the tram network was an extra over and above that which had been priced was an extremely poor deal for the council."
Earlier in the inquiry, the main contractor said that work to deal with utilities in the ground was a critical factor that delayed the tram project.
Garry Borland, of Bilfinger Construction UK, said that work on moving ground utilities, over which they had no control, was “very far from complete” when the contract between TIE and the infrastructure consortium was being concluded, adding that the utility work should have been completed before 2008, but was finished years late.
By December 2007, around 40% of the detailed design work was lacking.
The high-political project was originally going to be a multi-line network from Edinburgh Airport, via Princes Street to Ocean Terminal. Due to delays and cost overruns, the Ocean Terminal line was cancelled, truncating it to an 8.7-mile line, that opened, three years late, in May 2014. Its construction was heavily opposed by the Scottish National Party, but backed by then Labour-run council
