Edinburgh tram scheme had ‘litany of avoidable failures’, inquiry finds

The delayed and over-budget Edinburgh tram project had a “litany of avoidable failures”, the chairman of an inquiry has said as its long-awaited report into the transport system was released.

The inquiry was set up in 2014 to examine why the scheme went significantly over-budget as well as dropping one of the two initial planned lines and being delivered years later than first planned.

The cost of the reduced line from Edinburgh Airport to York Place was thought to be £776 million – more than double the initial sum earmarked at the outset by the Scottish Parliament’s then Labour-led administration – but the report found the best estimate is now £835.7 million after borrowing costs, compensation, outstanding claims and other items were fully factored in.

Retired judge Lord Hardie, who chaired the inquiry, said: “The inquiry process has been thorough and robust, but also complex, with literally millions of documents that had to be carefully reviewed and detailed contractual issues to investigate.

“This work has been time-consuming but necessary to produce a report which not only provides answers to what went wrong with the Edinburgh Trams project, but also clear recommendations for future transport projects.

“What is clear from the inquiry’s work is that there was a litany of avoidable failures on the parts of several parties whose role it was to ensure that public funding was spent effectively and to the benefit of Scotland’s taxpayers, and that the Edinburgh Trams project was delivered efficiently.

“Poor management and abdication of responsibility on a large scale have had a significant and lasting impact on the lives and livelihoods of Edinburgh residents, and the reputation of the city.”

In a video statement on the report, he holds Edinburgh City Council’s arm’s-length tram company TIE, the council and Scottish ministers “principally responsible for the failure to deliver the project on time, within budget and to the extent projected”.

Lord Hardie listed the points in the process where he found failings, saying the failure to deliver on time and on budget was due to the council trams company TIE Ltd’s “mismanagement and its failure to implement the strategy”.

TIE bore the brunt of his criticism, with the retired judge saying it failed to manage the design contract effectively and failed to deal with issues around the diversion of utilities along the tram route prior to its construction.

Lord Hardie said the business cases presented to councillors in 2007 were “misleading” and did not represent the risk allowance in the project.

The report also examined the dispute between TIE and the construction consortium made up of Bilfinger Berger and Siemens – known as BBS.

Lord Hardie said TIE’s conduct of negotiation with BBS was “inept”. The consortium was able to secure increased payments for its work at a series of summits in 2008.

Criticism was also directed at Edinburgh council officials, who gave councillors “misleading reports” on the project’s costs and overstepped their authority.

Lord Hardie said Scottish ministers also failed to protect the public purse.

He said a decision by John Swinney, the then finance secretary, to scale back Transport Scotland’s involvement in the project was a “mistake” resulting in a lack of expert oversight.

Lord Hardie said: “During the course of the Princes Street dispute (Mr Swinney) told Mr Mackay, the chairman of TIE, ‘to get it sorted’.

“His explanation that he meant TIE to follow the dispute resolution procedure does not bear scrutiny.”

He makes 24 recommendations for Scottish ministers, including considering whether there is a requirement for new legislation to allow for civil and criminal sanctions against relevant individuals or companies who knowingly submit reports that include false statements to councillors.

Further recommendations include that Scottish ministers hold a review of public inquiries to “determine the most cost-effective method of avoiding delay” in establishing them, including considering creating a unit for this within the Scottish Courts and Tribunals Service.

The cost of and time taken by the inquiry itself has become a focus for criticism.

When he set it up almost a decade ago, days after the trams finally started running three years later than planned, then first minister Alex Salmond told MSPs he expected it to be “swift and thorough”.

Public hearings began in 2017 and concluded the following year, with the report published on Tuesday sent to the printers in April.

Lord Hardie addressed this in his video statement, highlighting the complexity of the inquiry and saying the cost to the public was reduced from £13.1 million to £8.7 million through “using existing public resources that were not replaced”.

Scotland’s transport minister Mhairi McAllan said the inquiry “took too long, was too costly and in some instances the evidence heard does not support the conclusion drawn”.

She said the Scottish Government places the “highest importance” on efficient public spending and pledged to provide a more comprehensive response to parliament.