Council leader Jenny Dawe said she would take “all appropriate steps” to resolve a simmering dispute between council-owned tram developer Tie and lead contractor Bilfinger Berger, which has seen progress on Scotland’s biggest transport infrastructure project grind to a halt.
The move came after Tie turned down two offers of mediation this month and ahead of a council meeting in December on whether to rip up the contract with Bilfinger and its consortium partners Siemens and CAF.
Under contingency plans drawn up by Tie, work on a section of the route west of the city centre could restart as early as January if the main construction contract is terminated.
The plan would see the route between Haymarket Station and Edinburgh Airport -- where the project is most advanced -- progressed almost immediately, with Tie bundling the work into small sections and employing contractors directly.
In a motion approved following a stormy meeting of the full council, Ms Dawe said she had asked outgoing chief executive Tom Aitchison to take forward a mediation proposal in order to progress the project.
Mr Aitchison informed Tie of the move on Wednesday, a day after he had written directly to Bilfinger to offer a direct meeting with council officials and met Finance Secretary John Swinney to discuss the state of the project. The project board of Tie agreed to support the mediation process at a meeting on Wednesday.
Ms Dawe said: “Tie have kept councillors and officials informed of their strategy throughout this process and we have supported their position. However, now, as recommendations are being prepared for council to bring matters to a conclusion, it is appropriate for the chief executive to engage with the contractor in a final attempt to secure the best deal for the city.”
Despite tensions emerging between the council and Tie, yesterday’s intervention appeared to be the first time the two have taken a different approach over the tram dispute.
The arm’s-length company is understood to have turned down an attempt by Bilfinger to refer the dispute -- stretching back nearly two years -- to formal mediation.
It was reported yesterday that an approach by John Campbell, QC -- who headed a Holyrood inquiry into the Scottish Parliament building -- to broker an agreement between the parties was rejected as “simplistic and patronising”.
However, Richard Jeffrey, chief executive of Tie, played down any suggestion of a rift with the council, saying the two organisations were in “full agreement”.
He said: “We are working hard to bring the differences to a conclusion and have kept council fully appraised of the issues and how we are dealing with them.
“We have invited the consortium to explore mediation to reach a conclusive and decisive solution.”
However, sources in Tie expressed doubt over whether the mediation process would be able to come to a meaningful conclusion ahead of a meeting of the full council on December 16, at which the future of the project will be discussed.
A spokesman for Mr Swinney said the meeting with Ms Dawe and Mr Aitchison had been to keep him updated on the progress of the tram project and that he had not actively encouraged them to move towards mediation.
He said: “The Cabinet Secretary has received regular updates on the Edinburgh Trams project. The Scottish Government is disappointed at the lack of progress to date and we continue to encourage the parties to seek an early resolution to this contractual dispute, and ensure the best outcome for the people of Edinburgh and the public purse.”
