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Hardie prepares conclusions on Edinburgh’s tram debacle

The oral hearings of the Edinburgh tram inquiry ended last month with participants giving their closing statements on why the project suffered such a huge cost overrun and delay to opening. Andrew Forster reports

08 June 2018
The Edinburgh tram has proved popular with passengers since its delayed opening in 2014
The Edinburgh tram has proved popular with passengers since its delayed opening in 2014
Delays to the utility diversion works angered businesses
Delays to the utility diversion works angered businesses
Tram works had ground to a halt on Princes Street in summer 2009 because of a dispute between Tie and Bilfinger Berger. Visitors flock to the city’s Festival Fringe arts extravaganza each summer, giving a storyline for LTT’s comic strip by Clogs
Tram works had ground to a halt on Princes Street in summer 2009 because of a dispute between Tie and Bilfinger Berger. Visitors flock to the city’s Festival Fringe arts extravaganza each summer, giving a storyline for LTT’s comic strip by Clogs
Supposed to open in 2011, a truncated version of the line opened in 2014
Supposed to open in 2011, a truncated version of the line opened in 2014

 

If any budding student of project management had the time, then Edinburgh has been the place to be for the last nine months as the inquiry into the city’s tram debacle took oral evidence from scores of witnesses. In all, the inquiry, chaired by Lord Hardie, took evidence for 59 days. The hearings came to an end last month with closing statements from legal representatives of some of the main participants. Hardie is now preparing his final report, drawing not only on the oral and written evidence submitted by witnesses but also on the millions of other written pieces of evidence (reports, emails etc.) that the inquiry team has sifted through.

Lots of transport projects end up costing more and taking longer to deliver than planned but the delivery of Edinburgh’s first tram line was particularly painful. 

The tram project was led by the council’s arms-length  company Tie (Transport Initiatives Edinburgh). In 2008 councillors approved Tie’s recommendation to award a construction contract to Germany contractor Bilfinger Berger for the 11.5-mile line connecting the city’s airport in the west to the city centre and on to Newhaven in the north. The project’s expected cost was £508m (of which only part was the construction contract cost) and opening was scheduled for 2011. Relations between tie and Bilfinger quickly deteriorated, work ground to a halt, and costs soared. In the end, the airport to city centre section of the route opened in 2014 – three years late – and at a cost of £776m. The section between the city centre and Newhaven had to be abandoned on affordability grounds, though the council is now promoting this as a separate project (LTT 1 Sep 17).

The Scottish Government, which had provided a capped contribution of £500m to the project, ordered an inquiry in 2014 to explore why things went so badly wrong. For three years the team worked behind the scenes gathering evidence. Oral hearings commenced last September and the first days were summarised in LTT 29 Sep 17. These revealed that:

• councillors thought they were approving a fixed price contract with the infrastructure consortium (Infraco) Bilfinger Berger Siemens (BBS) but, in reality, it wasn’t. 

The contract was initially £243m for the full route but the council eventually paid £401.5m for the truncated route

• some council officers realised the contract contained a risk of cost escalations but the message was not communicated to councillors 

• the council had a difficult relationship with Tie, and a sense of distrust developed between the two organisations

Over the 59 days of hearings, the inquiry has drilled deeper into the project, producing thousands of pages of transcripts – too much to keep tabs on, and this article draws on only a small proportion of the evidence.

The inquiry has heard that a key source of the problems lay in the delays to completing tram design works, utility diversion works, and the issuance of construction approvals by the council. 

From the outset, it was envisaged that contracts for system design services (SDS – led by Parsons Brinckerhoff, with Halcrow as the main sub-consultant) and utility diversion works (MUDFA – led by Carillion), would be completed before the Infraco contract work commenced. Both contracts were, however, massively behind schedule, as was the issuance of construction approvals.  

Jason Chandler, Parsons Brinckerhoff’s project manager for the Edinburgh tram SDS contract from 2006 to December 2011, told the inquiry: “We had thought during the preliminary design stage that the concept design and the concept of the route and the positions of the tram stops and the outline layouts of all the traffic junctions had actually been resolved during the parliamentary process. It was only really after preliminary design that we realised that that wasn’t actually the case.

“As the designer just producing option after option, hoping that eventually we would find one that was acceptable to everybody, that was incredibly challenging, and sometimes there were mutually exclusive sets of requirements from the developers, the council themselves, tie, that we really struggled to overcome and come to an acceptable solution.”

One question that Hardie will undoubtedly address in his report is why Tie pressed ahead with awarding the Infraco contract when the SDS and MUDFA works were so evidently behind schedule. One suggestion is that it was anxious that any delays to contract award could put the project to jeopardy because of the political environment. By 2008 the SNP, which was hostile to the tram, was running a minority government in Holyrood and was sharing power with the Liberal Democrats on the city council. 

Contract confusion

The inquiry has pored over the contract and, in particular, the crucial Schedule 4, which covered costs and the apportionment of risk. For Hardie, one task will be  to work out who knew what and when. The closing statements reproduced over the following pages suggest considerable confusion amongst Tie and council staff over just what they were signing up to. 

DLA says Tie and the council were well aware that the design risk had not been transferred to the contractor but instead remained with Tie. 

The inquiry saw an internal Tie memo from 2009 in which Stewart McGarrity, Tie’s finance and performance director, wrote: “If we had time we might want to... track back through the late changes to the contract in the lead up to financial close and satisfy ourselves that at no point did BBS’s incredibly smart lawyers manage to sneak in amendments to the contract which effected a complete risk transfer on design back to us without the assembled might of Tie’s commercial nous and legal Dobermans noticing.”

The inquiry has considered whether the objectives of the council and Tie were the same or different. A number of witnesses said they differed, with Tie focused solely on delivering the tram, whereas the council had wider considerations, not least the financial risk it was exposed to. The Scottish Government’s decision in 2007 to cap its contribution at £500m made the council liable for any cost overrun. This prompted an internal council paper to state: “Against the background of the funding cap set by Transport Scotland, and a greater financial risk to be borne by the council, it is imperative that far more rigorous financial and governance controls are put in place by the council. It cannot always be said that Tie’s close focus on the tram project, and the council’s wider interests, are at one.” 

There were some in the council’s legal department who thought the council should commission its own legal advice on the Infraco contract before it was signed. Colin Mackenzie, the council’s principal solicitor in litigation, was one. He told the inquiry: “It was a very technical contract. It was a bespoke contract. It was one of high value. It was one of some substantial risk. And there were reputational issues for the council.” His advice was over-ruled by the council’s solicitor, Gill Lindsay.

Andrew Fitchie, a partner at DLA, told the inquiry that he was aware that some of the information that Tie was supplying the council was misleading. 

The inquiry also heard that, in the run-up to councillors approving the contract award to the Infraco, important information was withheld from them. Mackenzie emailed Gill Lindsay on 30 April 2008, the day before the council was due to approve the award of the contract to BBS, saying: “Gill, you may know this already, but BBS have increased the price by a significant amount. Urgent discussions underway at Tie this afternoon. Wonder how this leaves the report to council tomorrow!”

In an email on 1 May, Mackenzie told Lindsay: “I am advised that the suggested price increase is confidential; that it is not a done deal with BBS; and that there will be further negotiations over the weekend between Tie and BBS. Most significantly, I am led to believe that members will not be advised on these recent developments when council considers the report today.” He suggested “either pulling the report, assembling the true picture and reporting again to members, or by being open with them today about the changed situation”.

“Are members being properly served by officers? Are there implications for us as professional legal advisers?”  

Council: blame lies with law firm DLA and tie

In his closing statement to the inquiry, the City of Edinburgh Council’s lawyer, Roy Martin QC, blamed law firm DLA, which advised the council’s arm’s length company Tie,?and Tie itself, for the tram project’s woes.  

Martin highlighted the “critical importance” of the pricing assumptions in what has become the infamous Schedule Part 4 of the tram project contract, in particular pricing assumption number 1 and the change mechanism in clause 80.

“The procurement strategy in relation to the project was to transfer risk, including the risk associated with the design, to the construction consortium in order to achieve a fixed price contract,” said Martin. “It was recognised by the end of 2007 that there had been slippage in relation to the design and the Infraco [infrastructure consortium] had indicated that they were not prepared to take the risk in relation to the design in these circumstances.

“Tie Ltd believed, and reported to the council, that the risk around normal design development was transferred to the Infraco for an additional premium of £8m in terms of the Wiesbaden agreement, thereby delivering a contract with a high degree of fixity in the price. 

“When Schedule Part 4 was developed, Tie sought to maintain the position that had been agreed at Wiesbaden in respect of normal design development because its understanding was that it passed the risk to the Infraco. Neither Tie nor the council received any legal advice from DLA generally or Andrew Fitchie [a partner at DLA] individually that the pricing assumptions, and in particular pricing assumption number 1, meant that the risk of normal design development lay with Tie.  

“The pricing assumptions in conjunction with clause 80 were the principal cause of the disputes between Tie and the Infraco and ultimately led to the cessation of all work on the project, causing delays and a truncation of route. 

“These provisions were unusual if not unique in a substantial public infrastructure project, and ... gave to the Infraco a substantial contractual advantage.”

Martin said, however, that it was “the factual background which existed at contract close which led to these consequences ensuing”. “This background was the fact that at contract close, there were delays principally in the SDS [system design services contract, held by Parsons Brinckerhoff] design process, but also delays in the execution of the MUDFA (multi utilities diversion framework agreement, led by Carillion) contract.

“If the Infraco contract had not been entered into at the time that it was, and in a situation where the significant delays were in existence, then... the consequences would not have been the same, because the pricing assumptions in Schedule Part 4 would not have been departed from to anything like the same extent.

“Given that situation, the council is clear that it ought to have had proper legal advice on the meaning and effect of Schedule Part 4, and also its relationship to clause 80.

“The council sought advice from DLA in relation to the Infraco contract and, in particular, risks which required to be brought to the council’s attention. DLA agreed to give that advice and purported to present some advice in the form of a series of letters. The council relied on that purported advice, but the advice was not complete and it was not accurate; in particular, because it did not refer to the risk allocation issues raised in particular by pricing assumption number 1, nor its interaction with clause 80.”

Martin acknowledged that DLA told the inquiry that Tie’s tram project director, Steven Bell, had “supposedly said Tie was well aware of the risks associated with Schedule Part 4”. 

“Even if correct [this] ignores the direct duty of care on the part of DLA in favour of the council,” said Martin. “In a situation where the council was entitled to expect the proper exercise of a legal duty of care in its favour, and that did not take place, it is submitted that it would be unjustified to criticise senior [council] officers for themselves not having become aware of the critical meaning and potential effect of Schedule Part 4.

“Those senior officers had a range of responsibilities on behalf of the council as a whole, and did not have day-to-day or operational responsibility for the carrying out of the tram project. A local authority which delegates the carrying out of an infrastructure project to an ALEO [arms-length external organisation], and engages a professional legal adviser who was placed under a duty to give advice both to that ALEO and also directly to the local authority should not be criticised for failing to appreciate that which the legal adviser had failed to identify in legal advice.

“The council submits that the problem was not with the concept of an arm’s-length company for delivery of an infrastructure project, nor with the particular arm’s-length company of Tie, but rather with how that company came to be operated by its officers.”

Martin said there were “many examples” of where  Tie staff did not properly inform council officers “about precisely what was taking place and the issues which existed, and in a way which would have allowed the council itself and its officers properly to understand what were the potential consequences”.

“An obvious example is what occurred in the dispute resolution procedure process [between Tie and the Infraco]. The officers of Tie did not properly bring to the attention of the council the results of adjudications, in particular the earliest adjudications, and the effect of these decisions on what was tie's interpretation of the pricing assumptions.

“On the contrary, Tie continued to present these results as mixed, when truly they were not.”

Martin said there was evidence that Tie was representing its own interests rather than the council’s. “There are certain particular email exchanges, one thinks of the email with the word ‘colleagues’ in quotation marks, where there may well be an inference to be drawn that there was a feeling of ‘them and us’, rather than a feeling within Tie, ‘we are an arm’s-length organisation but we are here to serve the interests of the council in all respects and that is our fundamental duty.’”

Tie staff: ‘Tie made mistakes, Bilfinger held us to ransom’

Douglas Fairlie QC, representing a group of former employees of council arms-length company Tie, said the blame for the tram project’s difficulties lay with actions of some other Tie employees and contractor Bilfinger Berger. But he said Transport Scotland should not escape criticism for withdrawing from the governance of the project, and some councillors had bedevilled the project by leaking confidential information about the disputes between Tie and Bilfinger.  

“I readily accept that there are certain individuals within Tie, principally in my submission Mr Geoff Gilbert [commercial director 2006-2008], Mr Willie Gallagher [executive chairman from 2006 to 2008] and Mr Stewart McGarrity [finance and performance director, who quit in 2010] who may well be the subject of justifiable and justified criticism for actions which they took on the project as representatives of Tie,” said Fairlie.

“I accept that it might be thought that of those who I represent, they may on occasion have made errors of judgment, but the context in which they made decisions about the Edinburgh tram project was frequently, if not invariably, one of extreme difficulty created by others who either preceded them or in some cases were senior to them within the organisation.

“Nowhere was that more so than in the context of the contract and in particular the pricing schedule and the first pricing assumption.

“If I may paraphrase a recent pronouncement by President Trump, this was a contract which was ridiculous and which should never have been made. It was a terrible contract for Tie, and by extension a terrible contract for the City of Edinburgh Council.

“The change mechanism procedure within the contract was clunky, it was cumbersome, and it was at best productive of extensive delays. It seems to me from the evidence that the change mechanism process in its final form seems to have been a misguided attempt by Mr Gilbert to maintain total control over the possibility of escalating costs.

“But an unintended effect of that was to allow a contractor, if it had a mind to do so, to hold its employer to ransom. Whatever Bilfinger Berger may now seek to suggest, that in my submission is precisely what happened and we see the earliest example of that in the Princes Street dispute [where works came to a halt for months in 2009].

“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. 

“Precisely how that situation arose never became particularly clear in the evidence. Plainly, it was a consequence of the incompleteness of the design at the point of contract close, but what was never fully bottomed out in the evidence was whether the path was sowed by Mr Gallagher in Wiesbaden, or whether alternatively it was the drafting process, responsibility for which seems to have been assumed by Mr Gilbert, and whose inexperience in these matters seems to have been exacerbated by the absence of effective legal advice.

“Those who I represent, especially Messrs Steven Bell [Tie’s tram project director 2007-2011], Richard Jeffrey [Tie’s chief executive 2009-2011] and David Mackay [Tie’s chairman 2008-2009], were left to pick up the pieces of the mess that Schedule 4 ultimately created.

“Mr Bell said very clearly in his evidence that it was reasonably believed that sufficient allowance had been made for those limited notified departures within the budget. What was not expected and what Tie were not advised would happen, but what ultimately did substantially increase both price and time, were notified departures running to many millions of pounds, because of issues such as the very one to which I have already referred, that the employer’s requirements did not form part of the original base price.”

Fairlie defended Tie’s decision to fight many of Bilfinger’s claims through the dispute resolution procedure (DRP) process and said Bilfinger’s claims were reduced by approximately 50 per cent as a result of the DRP challenges. 

“When it became apparent that it [the DRP] had not worked, or had at least not worked as well as had been hoped, it was discontinued,” he said. “That was again, in my submission, a prudent and sensible reaction to the way that the adjudications had gone.”

He criticised Transport Scotland’s decision to withdraw from the governance of the project. “This was a particularly ill-judged decision. It resulted in Transport Scotland officers being more detached from the project than was desirable, and indeed being detached from the detail of the project to an extent that was surprising.”  

Fairlie said a further problem was city councillors leaking confidential details of the contractual disputes between Tie and the Infraco. Inquiry chair Lord Hardie asked him if this meant councils should not be trusted to deliver projects of this magnitude, with them instead being delivered by a central government agency.

“What I would say is that it illustrates the extreme difficulties that can be experienced where a council is dealing with a contract of this type, where each of the councillors wish to have the right to be informed,” said Fairlie. “There is nothing wrong with councillors being kept advised of matters, provided that that does not trespass into areas of commercial confidentiality which, if they were to leak into the public domain, would be prejudicial.”


Contractor: design and utility work delays to blame 

Representing contractor Bilfinger Berger, Mr Borland cited three factors as being at the root of the project’s problems.

The design of the project was to a very significant degree incomplete when Tie awarded the contract to Bilfinger, he said. “In the run-up to the execution of the contract, that design was being worked up by a party [Parsons Brinckerhoff] over whom the Infraco [infrastructure consortium of Bilfinger and Siemens, BBS] had no control whatsoever.

“The second key factor, is that the works to deal with the utilities in the ground, the so-called MUDFA works, were very far from complete in the run-up to the contract being concluded.

“The third key factor is that there were a number of third party approvals which were necessary for the progress of the Infraco works, which had not been obtained. The issuance of such third party approvals was not something which was in the control of Infraco. Just three months before the contract was eventually entered into [in 2008], it was recorded there that not a single design element had received final approval and had been issued for construction.

“Of the risks which manifested themselves, as far as the Infraco was concerned, the MUDFA issue was the biggest delaying factor,” said Borland. “The contractual provisions in the final contract of May 2008 were framed on the basis that the MUDFA works should all be completed before the Infraco works were to be started.

“That did not prove to be the case. Indeed, rather than being finished before the Infraco was due to start in the summer of 2008, the MUDFA works were years late in completing, and indeed were still ongoing after 2011 through to 2012.”

Discussing the Infraco contract, Borland said:  “Where risk could be identified and quantified, BBS as a contractor were prepared to accept the risk and price for it accordingly. Where the risk could not be quantified or even identified in some instances, we negotiated the contract to ensure the risk sat with tie as the majority of the risk items were their responsibility such as MUDFA design and third party agreements.

“This state of affairs led the parties to the infrastructure contract drafting a specific part of the contract which became Schedule Part 4, and the basis upon which critically the parties were entering into the contract in relation to risk was set out there. From the Infraco's perspective the essential purpose of Schedule Part 4 was to make it clear that it was not assuming certain contractual risks. Rather, Tie was to bear contractual responsibility for the risks identified in Schedule Part 4.

“Paragraph 3.5 of Schedule Part 4 makes it clear that the contract price has been fixed on the basis of what are called ‘base case assumptions’ which include the pricing assumptions. It is again made clear there, ‘if now or at any time the facts or circumstances differ in any way from the base case assumptions or any part of them, there will be a notified departure which will be deemed to be a mandatory tie change’.

“It was, accordingly, enshrined in the contract that the Infraco price was heavily qualified. On no reasonable view could the price be regarded as fixed.”

Borland cited an internal email from Tie of March 2008 in which an official said that, Tie should get the deal signed and then fight the notified departures “tooth and nail”. This is what then happened, with Tie triggering dispute resolution procedures.

“It is plain, if one scrutinises the adjudication decisions objectively, that Tie lost every single significant point of principle at adjudication, culminating in the decisive Dervaird adjudication decision of August 2010, which the Infraco won.” 


DLA: Council didn’t do its job 

Law firm DLA Piper Scotland LLP advised the council’s arms-length company Tie (Transport Initiatives Edinburgh), on the tram project. DLA was represented at the inquiry by Roddy Dunlop. In his closing statement, Dunlop said: “The council will of course submit to your Lordship that it was mainly DLA’s fault. Such a submission parts company with reality. It is important, as your Lordship will doubtless appreciate, as he pens his report, to understand the limits of what DLA, like any legal firm, engaged in a similar project, were there to do.

“Some core truths should be borne in mind. DLA had been stood down for a period of several months [in 2007, in the run-up to contract signing in 2008]. DLA were not present at Wiesbaden [the German city where, in late 2007, two Tie representatives met with Bilfinger Berger to finalise key aspects of the contract]. DLA were not asked and did not have the expertise to allow them to opine on technical or commercial matters.

“The decision to take SDS [the system design services contract], MUDFA [utilities diversions] and Infraco [infrastructure consortium] separately was nothing to do with DLA. That immediately entailed the risk that delays in one would impact on the other. The decision to withdraw the expertise of Transport Scotland from the tram initiative was not one in which DLA had any say. The decision of who should be put in charge of crucial decisions at Tie was nothing to do with DLA, and governance was a matter wholly outwith DLA’s reach.

“The proper analysis is, I suggest, quite straightforward. Wiesbaden was not the responsibility of DLA. Wiesbaden set the tone for what followed. The evidence shows that the deal as struck, which on material risk barely moved from Wiesbaden, represented the only show in town. The Infraco were quite simply and quite clearly not prepared to hold any more risk than they actually undertook, no matter how much DLA advised of the risks inherent in it.

“So what could have been done? Tie could have refused to sign [the contract]. Well, that would just have delayed matters further and given rise to ever increasing inflationary increases and Tie running costs. We know from the Infraco that further negotiation wasn’t going to lead anywhere material, or such delays could have torpedoed the whole deal, potentially meaning the end of the project and the Government funding of it.

“How is it, when your Lordship answers the questions in the remit, that DLA are said to have caused the delays, caused the increases in cost, or caused the failure of the project? The answer is that they haven’t. The delays and the extra costs sprang from a contract which others agreed and which was not in its essentials regarding price and risk up for negotiation.”

Dunlop said the “primary thrust” of the criticism others had made of DLA was its failure to apprise Tie and the City of Edinburgh Council of risks in the contract.

“The council expressly agreed more than once that DLA reporting to Tie was to equate to DLA reporting to the council. It is, I submit, incontrovertible that major players in both Tie and the council were fully sighted on the question of risk.

“If we start with the notion that this was a fixed price contract, it doesn’t take long to read Schedule Part 4. It’s a few pages. Whatever drafting criticisms one might have regarding Schedule Part 4, and it wasn’t Mr Fitchie [of DLA] that drafted it, the document is pellucidly clear in one regard at least. It’s not a fixed price contract. 

“Such risks were objectively clear. They were also subjectively known by key players. Mr [Steven] Bell’s [of Tie] counsel asserted that Mr Bell knew of the risks but not their size. But surely that is the whole point. These risks were unquantified, but it was not for DLA to quantify. The same point is then seen when your Lordship looks to the correspondence, as it flows, 2007 into 2008. We see an email exchange amongst Nick Smith, Gill Lindsay, Colin MacKenzie [all] of the City of Edinburgh Council’s legal team, talking of the incomplete stage of the SDS [system design services] contract and the potential for serious risks of increased cost to the project which were “unquantified”. 

“By February 2008 we have Ms Lindsay aware that the design risk was not being transferred to the Infraco. Mr MacKenzie is also by this stage aware that this risk was to be retained by the public sector.

“At the end of February 2008 Ms Lindsay emails Mr MacKenzie saying that she considered the risk associated with SDS design might be very significant and suggesting that she felt that the risk allowance for SDS at £3m was too low.

“Mr MacKenzie was entirely candid that he had read and fully understood the risks associated with Schedule Part 4 and the pricing assumptions.

“Ultimately, DLA’s only reporting line to the council was via the legal department. DLA reasonably anticipated that the lawyers would read the contract, or at the very least the core clauses, and the obviously crucial pricing schedule. We know that Mr MacKenzie did exactly that. Whether Ms Lindsay did or did not, she should have; and it ought to have been reasonably thought that she would have.

“DLA’s letters made clear that they were no substitute for actually reading the contract. Having read and having understood the contract alongside DLA’s close letters, it was for Edinburgh Council legal, not for DLA then, to report to elected members.

“If, as certain members claimed, they didn’t understand the blindingly obvious fact that this was no fixed price contract, the fault for that lies with Edinburgh Council legal and the officers within the other council departments.  

“It certainly cannot lie with DLA whose job was to brief City of Edinburgh Council legal when instructed to do so by Tie.

“Looking then to Tie itself, by March 2008 Mr Fitchie [of DLA] had met with Mr Geoff Gilbert [Tie’s commercial director] and made it clear that the risk of base case assumptions failing lay entirely with Tie, moreover, that Tie had no visibility on the state of the design.

“Schedule Part 4 was drafted and controlled by Messrs [Geoff] Gilbert and [Steven] Bell. Their knowledge of the existence of risk is plain. It’s plain on schedule part 1 and it’s plain on clause 80, which was drafted by the Infraco and agreed to by Mr Gilbert.”


Transport Scotland: We were right to step back

The Scottish Government’s legal representative, Mr Barne, said Transport Scotland had been right to step back from the project’s management, and he rejected claims by others that this had contributed to the project’s problems.

In 2006 the Scottish Government told the council that the £375m of in principle grant funding for the tram made in 2003 would be index-linked, subject to the council submitting an acceptable business case for the project.?In the Scottish Parliament election of May 2007, however, the SNP became the largest party in Holyrood and formed a minority government. The SNP had a manifesto commitment to scrap both the tram and the Edinburgh Airport Rail Link (EARL) projects. 

EARL was axed but Parliament voted to request that the Government continue funding for the tram. “The SNP were not bound by this vote, but there was a concern that should the will of the Scottish Parliament not be accepted by the SNP government, the new administration could come under threat,” said Barne.

The Government accepted Parliament’s will and, crucially, the in principle funding for the tram project became a firm commitment. “The funding was no longer subject to approval by the Scottish ministers of the final business case and, going forward, the Scottish ministers could not be seen, having accepted the will of the Scottish Parliament, to be taking any steps that might be perceived as an attempt to closedown the tram project by the back door,” Barne explained.

He said Transport Scotland withdrew from the tram project for two related reasons.“Firstly, to ensure that during the delivery phase of the project, there was clarity of roles as between those responsible for delivering the trams project and those funding it; and secondly, to ensure that there was no basis on which the council could look to the Scottish ministers for funding above the £500m cap.

“The suggestion from some quarters appears to be that Transport Scotland’s withdrawal orphaned the project, leaving the council and Tie to fend for themselves. Any such suggestion is, I submit, without basis.

“Withdrawing Transport Scotland from the tram project board did not mean the Scottish ministers were abandoning the project or in any way washing their hands of it. The Scottish ministers’ interests and the wider public interest were protected by the grant conditions that were put in place.

“The fact that several witnesses suggested that there had been a loss of expertise as a consequence of the withdrawal of Transport Scotland goes to show that there was a lack of understanding about Transport Scotland’s function on the tram project board,”?said Barne. “It also disregards the extent to which Tie availed itself of external expertise. The sheer scale on which Tie employed external consultants can be seen from a spreadsheet indicating that between 2007 and 2011, Tie employed around 80 consultants or consultancy firms. Tie [also] had extensive in-house commercial and technical expertise. By contrast, while Transport Scotland had in-house heavy rail expertise, it had no in-house expertise in light rail.”


 
 
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