The company delivering the tram project for Edinburgh has now initiated formal contractual dispute resolution with the Bilfinger Siemens CAF (BSC) consortium in an attempt to resolve the dispute which began in February of this year.

The move is being backed by the City of Edinburgh Council.

Despite the efforts of tie Ltd to address the matter though ongoing discussions and mediation there are still a number of outstanding issues between tie Ltd and the BSC consortium.

Further detail of the dispute resolution process is contained within a report published by the City of Edinburgh Council today which will be considered by Councillors at the Council meeting on Thursday, 20 August.

The report states that given these issues it is now considered difficult for Phase 1 to be completed within the available project envelope of £545m and that the delivery date of the project is now forecast to be Spring 2012.

-- Advertisement --

There are several contingency options under consideration including a controlled amount of prudential borrowing with debt repayments funded through Transport Edinburgh Limited (TEL) profits, potential leasing arrangements or the Council's revenue budget or through identification of future spending from the Council's capital programme.

These options would be available to the Council if additional funding is required.

Leader of the City of Edinburgh Council, Jenny Dawe, said: "It is clearly regrettable that the dispute has escalated to this stage but we are giving tie our full backing as we must ensure that contractual obligations on the tram project are met by BSC. The process may take several months but is crucial that tie enter into these proceedings to ensure we get best value for the project in the long term."

Richard Jeffrey, Chief Executive, tie Limited added: "We have always been clear that we will pay for what is just and offer fair recompense to our contractors as laid out in the tram contract.

"We appreciate that this development is very disappointing for all parties concerned, but equally we know from the support we have had that the Capital would wish us to stand firm in our pledge to the city under the agreed contract."

The report also gives an update on the major investment in the hidden infrastructure of the city, which was required to replace pipe work for major utilities such as water, gas, and telecoms.

(GK/BMcc)