Pressure was put on the Scottish Government last night to administer economic reprisals against a German company after it brought a new phase of the Edinburgh tram project to a standstill.
Pressure was put on the Scottish Government last night to administer economic reprisals against a German company after it brought a new phase of the Edinburgh tram project to a standstill at the eleventh hour.
Both Transform Scotland and the Scottish Association for Public Transport said that a £340m contract awarded to Bilfinger Berger for the M80 upgrade should be suspended until the dispute was resolved.
Bilfinger Berger was due to start work today on Edinburgh's Princes Street, laying the track at the heart of the £512m scheme to bring trams to the capital by June 2011.
But it now claims the job will cost an extra £80m given delays in preparatory works and on Thursday the firm could not guarantee Transport Initiatives Edinburgh (tie) that it could fulfil its £150m contract on time or within budget.
David Mackay, chairman of tie, has now called a halt to the work - claiming that Bilfinger Berger, as part of the building consortium, had imposed "unacceptable conditions" on the project.
The row could cause months of delays to the project and will almost certainly lead to a legal challenge against the German company.
Colin Howden, director of Transform Scotland, the sustainable transport alliance, said: "Until such time as this contract dispute is resolved, the Scottish Government should suspend all contracts with Bilfinger Berger.
"If contractors can't be trusted to deliver upon signed contracts then we shouldn't be giving them any further taxpayers' money."
Dr John McCormick, chairman of the Scottish Association of Public Transport, added: "If Bilfinger Berger wants to start reneging like this, the Scottish Government should do likewise. Hopefully, it would lead to the tram contract being honoured as it should."
Any such move could also affect German electronics giant Siemens, part of the tram-building consortium, which has been awarded a contract to provide Scotland with 130 new train carriages by 2010.
The Scottish Government said yesterday it would not be drawn into the dispute. "It has no bearing on any Transport Scotland contracts," a spokesman said.
The project has long been a contentious issue for the SNP administration, having inherited it from Labour in 2007.
First Minister Alex Salmond, an outspoken critic of the scheme, did not offer any comment yesterday.
Des McNulty, Scottish Labour transport spokesman, said: "Taxpayers have a right to accept that contracts signed in good faith will be honoured, without more money being demanded from the public purse."
A spokesman for Bilfinger Berger said: "As the client failed to meet contractually agreed conditions and as no agreement has been reached on the resulting additional costs, construction work in Princes Street cannot yet commence."
Princes Street will remain closed to traffic as arranged.
