Trams not on budget and not on time

EDINBURGH'S beleaguered trams system is today officially confirmed as being behind schedule and over budget.

Richard Jeffrey, the new chief executive of tram firm TIE, has conceded the mammoth task of delivering a showpiece tram line through the heart of the city will not now be completed as originally planned in July 2011.

Slim hopes that it might just be completed within its original £512 million budget have also finally been scuppered.

In his first interview since taking over the job dubbed by tram line opponents as "mission impossible", the former Edinburgh Airport managing director insisted that despite a string of unexpected pitfalls, contractual disputes and fury from businesses and road users hindered by its doddering progress, the project will be a major success.

"The situation is absolutely recoverable and I do not believe it is as bad as it's made out to be," he stressed.

"It might be appropriate to conduct a post-mortem on this and it might well lead to some public hangings – then again, it might not, but at the moment it's not helpful or productive in terms of getting the trams built. We can't gauge what, if anything, has gone wrong until the trams are up and running."

He also called on politicians to stop bickering over the project and urged them to rally together instead.

"I'm not blind to the political complexities of the project but the more that is allowed to take centre stage, the more damage to the product, to Edinburgh and to Scotland," he warned.

He was speaking for the first time since taking over the chief role at tram firm TIE last month, replacing former chief executive Willie Gallagher, who left six months earlier for family reasons.

Mr Gallagher's resignation came just weeks after it emerged that Neil Renilson, the head of Lothian Buses and the official charged with integrating trams and buses, was to take early retirement in December – plunging the management of the project into disarray.

Mr Jeffrey had just started in his new role when Edinburgh's transport chief, Phil Wheeler, was forced out of his job by his own party amid concerns over his handling of the tram project. Mr Wheeler has been replaced by former finance leader Gordon Mackenzie.

It brings a new management team into position at a key time in the project's progress: as troublesome work to realign utilities in Princes Street begins to reach a conclusion, allowing the first tracks to be laid in the city's key thoroughfare in June and the street to reopen in November.

While Mr Jeffrey is confident that target will be met – thanks to the city council's decision to lift an embargo on tram works in the high summer season period – his first key announcement as chief executive has been to confirm that the overall project is now officially delayed and over budget.

"The project will not be delivered in July 2011," he confirmed. "We are working as hard as we can to make sure we are up and running as soon as we can – I have a pretty good idea when that will be – but it's not appropriate to announce that while we are still in talks with contractors."

It is also possible that the first tram ride will be a rather shorter journey than originally anticipated. He is not in favour of a "piecemeal" opening of the line, but it has not been ruled out either.

"At the moment the plan is to stick with the original plan and open the entire route – from Newhaven to the airport – fully working, fully functional.

"However six months of training and shadow running has been designated for the route from Gogar depot to Edinburgh Park – if that goes well there's a chance to reduce that six months and open other sections. But having put the city through this level of disruption, having spent this money, we have to make sure that when it opens, everything is fantastic from day one."

Not only is the project behind schedule, it's also going to be over its original £512m budget, he confirmed.

"We're in discussions with contractors at the moment to agree on a revised programme and costs – it wouldn't be sensible to discuss figures."

Instead he points to the "risk allowance" sum built into the final funding figure of £545m – a cash pot set aside to help cover potential problem areas – adding the final amount will rest somewhere between the two figures.

Nevertheless, Mr Jeffrey – who steered Edinburgh Airport to challenge Glasgow's crown as Scotland's key aviation gateway before quitting in April 2007 – is upbeat. With a background in civil engineering along with a key role as current president of Edinburgh's Chamber of Commerce, his appointment is being seen as a major step forward in bringing together opponents of the controversial project.

Already he is pledging to improve the tram company's communication on key traffic management issues to help businesses and the public through the pain of construction.

He has also ushered in a new era of openness by conceding that disputes with the likes of key contractor Bilfinger Berger, whose disagreement with TIE led to a month's delay on the Princes Street site earlier this year, will almost certainly occur in the future. The German-based company has indicated that there are at least 100 areas of possible dispute outstanding which could push up the cost of the project.

Mr Jeffrey added that unforeseen problems have hindered work in Leith, putting most of the area's construction work behind schedule. "We are replacing infrastructure that in some places is 150 years old. You can do so much in site studies and investigations but something will always crop up – that's written into the project."

While some issues are unavoidable, others could have been handled better, he added. "I think we could have treated the city with a bit more respect. That's about how we communicate with businesses and the public in the way we plan and develop works and even about good housekeeping – keeping areas where we are working tidy and professional.

"There is huge support around the city

People have said this is 'mission impossible', but since I have taken it on I've felt so enthused about everything. There's this great sense of being part of something that will be so good."