Edinburgh trams inquiry: ‘Secrecy’ hampered project progress

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FORMER council leader Jenny Dawe today told the Edinburgh tram inquiry of her frustration at being denied information on the troubled project by the authority’s own arms-length company TIE.

She said there had been “a huge amount of secrecy” particularly surrounding the bitter dispute between TIE and main contractor Bilfinger which blew up during the project.

Tramworks on Princes Street in 2009. Picture: Dan Phillips

Tramworks on Princes Street in 2009. Picture: Dan Phillips

Ms Dawe, who was council leader from 2007-12, was the first witness to give evidence on the opening day of the inquiry, chaired by former Lord Advocate Lord Hardie, into why the trams were delivered five years late at a hugely increased cost and on a truncated route.

Asked about how the secrecy had affected the project, she said: “I found it most frustrating when it was concerning the dispute resolution process.

“The information we were given from TIE was that the dispute resolution was going in favour of TIE – they described it as win or lose and they were winning and the other side were losing – but it soon 
became obvious that was not what the situation was.

“Also about the costs and the time – very often we were told ‘Oh no, we can’t tell you that’ – particularly when matters had reached what might be called a stand-off with the consortium. The implication was ‘You cannot be trusted not to tell the consortium what we TIE are thinking, so we are not going to give you that information’.”

She said the council was expected to “stand by” Tie and had done so. But she said: “We did not have all the detailed figures because we were told the contract did not allow either party to discuss any matters of dispute resolution with anybody outside the two contract holders.”

She said she accepted contracts had to be respected. But she added: “Everything around the disputes became shrouded in secrecy.”

Nevertheless she said the council had enough information to make decisions on the project. “I don’t think it impeded decision making but in looking at documents for this inquiry I found there were internal memos going around which do suggest that councillors were perhaps being kept in the dark.

Earlier this year, the Evening News revealed an internal memo sent by Nick Smith, then a solicitor in the council’s legal services division, to Alastair Maclean, who had recently joined the council as head of legal, advising him to be “very careful” what he told councillors about the project and explained they had been kept on “restricted info flow”. The council insisted the comment referred to the route and timing of information-sharing with members – not its quality or quantity.

Ms Dawe told the inquiry that when she became leader of the council in 2007 it made a “huge difference” to the amount of information she received. “As opposition leader I was definitely getting a lot less information.”

She said councillors were regularly briefed by officials but it was usually in party groups, not all councillors together.

And she said information might not be provided as early to those who were opposed to the trams – because they were suspected of leaking it.

“We knew there was 
information getting into the press and we believed that to be coming from anti-tram sources on the council.”

The inquiry heard of a presentation to councillors in October 2007 which included a bullet point summary of the state of the project claiming: “If programme and scope are adhered to by the council and TIE, very limited exposure to cost 
overrun”.

Ms Dawe said the contract for the tram project had been described as a “fixed-cost contract” – although it soared way above original estimates.

She said the Scottish Government was providing £500m funding through Transport Scotland and the council was putting in a maximum of £45m.

“We were told it was a fixed-cost contract and that phrase is used repeatedly for a quite a long time until it became ‘fixed-cost but’ or ‘fixed-cost plus’. To my mind, and I think most people’s minds, the contract was not going to come in more than what we were told. That was a very important aspect – largely because the £500m was fixed and we did not want the council to expend more than the £45m we felt was achievable.”

Ms Dawe said it was “extremely disappointing” when the dispute between TIE and the contractors halted work on Princes Street and elsewhere in February 2009.

“It was quite difficult to establish exactly what the reason for it was because we were being told one thing by Tie and the information from elsewhere seemed to be rather different,” she said. “We were certainly informed by Tie that there was a stand-off and that the contractor was demanding more 
money, which immediately called into question just how much of a fixed-cost contract it was.”

She also described how she had proposed a mediation process as a last resort. “It was quite clear that we had this horrendous impasse where nothing was happening, the city was dug up, and looked a complete and utter mess.

“There now had to be something done that was actually going to, in the crudest of terms, knock heads together and get things moving.

“Of course, the end result of it all was that TIE’s role in the whole project some months later was eventually nil. It was basically closed down.”

ian.swanson@edinburghnews.com