Edinburgh Trams and Lothian Buses are understood to be at loggerheads over how services such as marketing and backroom IT are allocated.
Both share backroom resources after being brought under the Transport for Edinburgh umbrella in August 2013.
But it is believed a review into the Service Level Agreement (SLA) – a standard contract outlining shared services – has left tram chiefs dissatisfied with the deal, believing they are not getting value for money
It comes just over a year after Lothian Buses managing director Ian Craig fell out publicly with three other directors who launched a grievance procedure against him, allegedly relating to amid concerns abouthis abrasive management style and accusations he failed to consult colleagues over significant decisions.
The dispute led to the resignation of bus chairwoman Anne Faulds and subsequently Mr Craig. As a result of the debacle, three other directors are due to leave the company over the course of the next two years.
A senior transport source said: “The tram company is not happy and have asked for the SLA to be revised.”
Unite the union earlier raised concerns that the city’s popular bus service would be “plundered” to pay for the new trams extension with about £20 million expected to be handed over, but now it is claimed there is concern the bus company is “not providing what the existing tram service needs”.
Worried insiders said conflict between the two firms is escalating, rather than diminishing.
In December former Army commander Brigadier George Lowder replaced Ian Craig as chief executive of the umbrella body Transport for Edinburgh.
The latest shake-up follows the earlier review of the running of the entire public transport system in the Scottish capital when it was thrown under the spotlight by the implosion of the board at Lothian Buses.
At that point one leaked letter by Edinburgh City Council described the leadership as “dysfunctional”.
A spokesman for Edinburgh Trams said its new general manager Lea Harrison is conducting a review of all areas of the business.
He said: “No decisions about any shared services have been taken and in any case, this will be an ongoing, routine process.”
This was confirmed by chairman of Lothian Buses Jim McFarlane who said the firm was “entirely comfortable” working with Edinburgh Trams on shared services.
“I have also indicated previously a willingness for a joint review to be undertaken should this be requested,” he said.
A council spokesman said: “A fully integrated transport system is crucial to Edinburgh’s continued success and the creation of Transport for Edinburgh has been an important part of this process.
“The new governance arrangements have bedded in well – the results speak for themselves – but it makes good business sense to review the SLA and ensure best value.”
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