Six new battles in tram war

Independent mediator Colin Smith has been called in to rule on issues that have emerged since work resumed last year.

Council chiefs insist it is proof that their new system to handle disagreements is working – and is not evidence of relations with Bilfinger Berger deteriorating again.

It also emerged in an update on the project today that incorporating a new tram stop and line “turnback” at York Place has added an extra £230,000 on to the cost of the project and that £1 million of a £34m “risk allowance” contingency fund has been spent.

It also confirmed that £521m has now been spent on the project – and that it remains on budget.

The new issues relate to disagreements about the cost of work done and the interpretation of the original contract, although none of the rulings of Mr Smith, a consultant who was previously hired to help the council during the mediation last year, has been challenged.

Council chief executive Sue Bruce said: “Since the signing of the settlement agreement, the independent certifier has ruled on four matters in relation to commercial valuations and two matters of contractual interpretation.

“There have been no challenges to any of these rulings.”

At the height of the dispute between Bilfinger and TIE, lawyers were ruling on hundreds of disputed issues.

News of the latest disputes will inevitably spark criticism from opposition groups, but Councillor Gordon Mackenzie, the city’s transport leader, said: “The evidence so far demonstrates that, under the new governance arrangements, all parties are working together productively and proactively, with any differences that emerge being resolved swiftly.

“The project has clearly entered a new phase, one in which we are seeing the benefits of the decision taken to go to mediation and the resulting agreement with the contractor.”

The new £776m budget for the project to take the tram from the airport for the city centre included a £34m “risk allowance” for unexpected works such as utility diversions and redesign. The new council report published today has confirmed that £1m has been used on 14 different additional costs.

The largest is the redesign of a substation to be moved to Cathedral Lane, although it is hoped the £233,595 cost will be reimbursed by the developers of the new St James Quarter.

The decision to include an extra tram stop in York Place, as well as the track turnback, needed as a result of the decision to end the line there, will also cost £228,652.

Leasing land at Edinburgh Park and buying two extra portable offices for tram staff who used to be based at TIE’s Haymarket office has also cost £159,900, while £133,075 has been spent on St Andrew Square.

Mrs Bruce said: “Satisfactory progress has been made on the project since signing the settlement agreement. The new governance arrangements have been working well.”