Tram construction firm '˜considered pulling out days before signing contract'

The contractor behind Edinburgh Trams had considered pulling out

Scott McFadzen, who was project director for Bilfinger Berger, said during April 2008 he and his colleagues became increasingly alarmed about the deal they were about to sign and the problems that lay ahead.

He said: “Our growing alarm was to the extent that Bilfinger Berger were considering whether this job was worth doing or not.”

The inquiry was shown correspondence from April 30 - just days before the contract was signed - which revealed Bilfinger had told council tram firm TIE they required a further £12 million to conclude the deal.

Mr McFadzen said the price increase was prompted by concerns about the state of the project.

“It was born out of increasing alarm that this was not going to be a good project. All the things the were coming up - the design was late, utility diversions were late - it looked like a project that was heading for disputes and big disputes - and big disputes are expensive.”

And he said Bilfinger had discussed bypassing TIE and writing to the city council about its concerns.

“We believed that TIE were misleading the council on a lot of fronts.

“If we had put money to all the pricing assumptions it would have added up to a considerable sum and that may have made the project unaffordable from the council’s and the Scottish Government’s point of view.”

Mr McFadzen, who had played a key role in persuading Bilfinger to bid for the tram project, described how their attempts to price the work had been plagued by a lack of information because of the delays on design work and utility diversions.

“The longer time went on, the programme was becoming more and more difficult. TIE was slightly head in the sand, saying it will be OK, don’t worry.

“We just kept working away on the bid.”