Edinburgh trams late and overbudget due to ‘avoidable failures’

The first phase of Edinburgh’s tram system was three years late and £300m over budget due to “a litany of avoidable failures”, a public inquiry has concluded.

After nine years of investigation, the inquiry has published a damning final report that blames contractual mismanagement, design delays and onsite problems for the late completion of the 23-stop tram network, which finally opened in 2014.

Inquiry chair Lord Hardie pointed the finger at Edinburgh City Council, tram company TIE and the Scottish Government, saying: “Poor management and abdication of responsibility on a large scale have had a significant and lasting impact on the lives and livelihoods of Edinburgh residents.”

Edinburgh council had budgeted £545m for a tram line between Edinburgh Airport and Newhaven, slated to open in 2011. But the report estimates that the completed scheme, which terminated eight stops short of the original route, cost £835m.

This figure is likely to rise, as it does not include the final cost of a £246.5m loan that Edinburgh Council took out out as a result of the delays.

Many of Lord Hardie’s accusations focus on TIE, a newly-formed arm’s-length company operating under the council. The report concludes it “had no knowledge of, or experience in managing, the particular difficulties associated with the construction of a tram or light rail system through the centre of a city in the UK.”

TIE was responsible for negotiating the design and construction contracts, which were the source of many of the project’s woes.

A particular problem was that works to divert underground utilities had to be completed before the infrastructure could be installed. Instead of leaving the task to utility companies, TIE made a framework agreement with Alfred McAlpine Infrastructure, later to become Carillion Utility Services. It was the largest multi-utility project ever undertaken in Europe at the time.

Alfred McAlpine suffered significant delays as it ran into unexpected underground obstructions. The report says the utility-removal programme was “unrealistic” in its timeline, adding that it failed to take into account uncertainties about the number and location of utilities that would have to be dealt with. “Each revised programme was too optimistic and was based on levels of production that had never been achieved previously,” the report says.

By the time TIE entered into a contract with Bilfinger Berger and Siemens (under the name Infraco) to undertake construction and engineering works, Alfred McAlpine, at that point operating as Carillion Utility Services, had failed to clear utilities from the working area.

The report notes that 302 utilities had not been moved from a 700 metre stretch at Shandwick Place, despite the area allegedly being completed. Carillion’s contract was terminated early in December 2009. The report blames the debacle on TIE’s inability to manage its contractors.

The project design had also not been completed when the construction contract was signed. TIE insisted on transferring the design contract to Infraco in spite of this, which the report says was a “serious error”. The result was that TIE retained a large part of the risk of design change, leaving it vulnerable to likely cost increases.

The report also says that the cost of additional borrowing for the project prevented the council from funding other activities.

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