The private firm brought in to run Edinburgh’s tram project will cost the city nearly £8000 a day, the Evening News can reveal today.
International consultancy firm Turner & Townsend (T&T) will be paid £700,000 every three months under the deal that saw the company replace discredited tram firm TIE as project manager.
It also emerged today that the final wave of pay-offs at TIE, where around 20 of the 29 remaining staff will leave on voluntary redundancy deals, will cost the council another £800,000. That will take the total cost of redundancy deals for staff at TIE up to £2.1 million – and that does not include former chief executive Richard Jeffrey’s pay-off.
The £2.8m annual cost of T&T managing the project will come on top of costs relating to the time put in by officials at the council, which has taken a much more “hands-on” role since mediation talks with the construction consortium headed by Bilfinger Berger began earlier this year. It also does not include the cost of Transport Scotland officials, who have been brought in to help oversee the troubled project.
But council bosses insist that the costs will still be lower than the running costs at TIE, which total £47m since the start of the tram project and have worked out at an average of £2.1m per quarter.
City council chief executive Sue Bruce said: “The idea was that, in winding down TIE, it would put control back to the council and see if we could save on any costs. The idea was that, if there were any [staff] skills that we needed then we would keep these, otherwise we would let them go.”
When asked whether the project will progress more smoothly with the end of TIE, Mrs Bruce said: “I think it will sharpen the focus and bring clarity around roles and responsibilities, and it will be easier to keep a tight hand on it.”
The winding down of TIE is expected to be completed within four weeks. Of the nine staff not being given redundancy deals, five are expected to join T&T, while four are set to get new positions within the city council.
Councillor Lesley Hinds, transport spokeswoman for the Labour group on the council, said: “I am quite shocked about the cost of Turner and Townsend because, as I understand it, they are not taking over the whole function of TIE. They are doing a part of it but there will also be the cost of Transport Scotland staff and staff seconded from the council. There have to be questions asked about why the cost is so high.”
Councillor Jeremy Balfour, leader of the Tory group on the council, added: “These figures are a big surprise. We asked for more details before Turner and Townsend were appointed and we did not get that. We wanted to know what their standing would be, how much they would be paid and what they would do and that was not provided to councillors.”
Councillor Gordon Mackenzie, the city’s transport leader, said: “I think TIE have become tainted by what has happened. TIE as an entity has become synonymous with the difficulties the tram has experienced. It was clear that a fresh start was required. That said, there are a lot of people working at TIE who have done nothing but their very best and contributed a great deal to try to get the project moving forward.”