by George Rosie

The Route To Nowhere

November 11, 2010 | by George Rosie

Bringing trams to Edinburgh was meant to show what a modern European city it is. Many years and millions of pounds later, the tram project makes a statement about the capital – only it’s not the one they wanted to make.

The resignation last week of David Mackay from the chairmanship of the Edinburgh trams project came as no great surprise to anyone who has observed the progress of the tram scheme. It’s been known for some time that Mackay had been fretting about the slow progress of the work, the recalcitrance of the contractors, the quality of the initial contracts, the escalating costs, the complaints from the public and the sniping of the project’s SNP opponents. “Hell on wheels” was the phrase coined by Mackay in an interview with The Scotsman to describe his two-year tenure.

The part of Mackay’s litany of complaint that resonated with me came when he suggested that the project and the people of Edinburgh might have been much better served if the infrastructure contract had gone to a Scottish or British firm. “There was a cultural problem,” he claimed. “If we had been dealing with, say, Balfour Beatty, we would not be in this position. Bilfinger Berger was very risk averse, and they would do nothing until they had money in their pocket.”

It might seem odd for a Scotsman to be complaining about another nationality’s canniness, and I’m not sure that the German company Bilfinger Berger deserve Mackay’s charge of “acting in a delinquent manner” calculated to squeeze every last penny out of the Scots. When arguments between the parties were taken to the appropriate Scottish tribunal, most of the decisions were won by the contractors. Which suggests the contracts signed in May 2008 were not what they should have been to begin with.

Mackay’s concern about ‘cultural’ differences is worth bearing mind. Because Bilfinger Berger is far from being the only foreign company involved in the Edinburgh trams project. In fact, the extent to which the project is being put together outside of Scot-land is both worrying and shaming. Apart from the raft of transport professionals and one-time council workers who are trying to steer the work to completion, just about everything is being done by foreigners.

The designers of the tramway were Parsons Brinckerhoff of New York. The 25 miles of steel rail are being forged in Austria by Voestalpine of Vienna. The job of installing the system – rails, overhead lines, stops, cable towers, signalling, ticketing, electronics – has gone to German infrastructure giants Siemens and Bilfinger Berger. The 27 new 250-passenger tramcars are being built in Spain by Construcciones y Auxiliar de Fer-rocarriles (CAF). Even the running of the trams was originally awarded to the French firm Transdev until the council took the work ‘in house’ and gave it to a new council-owned body to be called TEL, or Transport Edinburgh Ltd.

Because it’s against the law to run a tram line over vital utilities – gas, water, electricity – 17 miles of services along and around the tram route had to be dug up, realigned and in places renewed. That particular task was awarded to Alfred McAlpine Ltd which was promptly taken over by the huge Wolverhampton-based engineering and construction firm Carillion. All these firms have their sub-contractors, of course, but very few are Scottish let alone rooted in Edinburgh or the Lothians.

At the risk of sounding chauvinistic, it strikes me as odd that no one appears to be worried that this huge, £600 million (probably) project is being designed and built by companies outside of Scotland. The only one who seems to have noticed is a blogger who calls himself ‘Flabskin’ who wrote at the end of October that “If Scotland had a domestic tram infrastructure builder and a domestic tram manufacturing industry, then spending 500 million on a tram scheme might make some sense. But we don’t.” In Flabskin’s opinion (pretty measured for a blogger) when the project is done and dusted all that money has “gone out of the Scottish economy never to return”.

It has to be said that is not the fault of the tramway bosses. They can only work with the tools at hand, and it seems that none of those are British, let alone Scottish. Could it be that we have become so used to having other people build our cars, ships and railways that we decide right at the outset, almost as a reflex, that foreigners will build them better, faster and cheaper? Have we come to the conclusion that we’re no longer up to the job? Maybe we’re just no longer interested. When the tenders went out for the 27 tramcars (at around £2 million each) no British company was deemed good enough to be shortlisted to build them. Four serious bids came in: from Bombardier (Canada), Alstom (France), Siemens (Germany) and CAF (Spain).

Edinburgh’s tax-payers increasingly feel discontented about the trams. This anxiety pervades the city. I was sitting on the top deck of a No. 16 bus which was crawling up Morningside Road. The traffic in front was backing up from a set of temporary traffic lights where the road had been dug up to repair some of the city’s ageing utilities.

“It’s these damned trams,” groaned one of the two well-dressed, Morningside ladies sitting in front of me. “They’re nothing but a nuisance. I can’t see why they’re bothering when we’ve got a perfectly good bus service. Which would be a lot quicker if it wasn’t for the trams.”

Her companion agreed with her. “I shudder to think what it’s going to put onto our council tax.”

The point is: the middle of Morningside Road is nowhere near the route of the new tramway.

Tramophobia, it might be called, and it’s widespread. It’s stoked by the local media, particularly the Edinburgh Evening News, as well as hostile bus drivers and taxi drivers. It’s probably at its most acute among small businesses in Leith Walk who’ve suffered years of disruption from road closures and traffic diversions. While tramophobes are thick on the ground, tramophiles are few and far between. Speaking out in favour of trams is just not done in Edinburgh circles, polite or otherwise. The council’s tram company Transport Initiatives Edinburgh has become the city’s bete noir.

Bloggers are furious. The tram system is seriously rivalling the building of the extremely late and over-budget Scottish Parliament in terms of the disquiet it has inspired. What people want to know is: who is responsible?

There’s an old saw that success has many parents while failure is an orphan. Which may be why it’s so hard to pin down who came up with the idea of trams for Edinburgh. It’s possible that the honour belongs to Professor Lewis Lesley of John Moore’s University in Liverpool. At the beginning of November 1998 Lesley was in Edinburgh to try to persuade the council that what the city needed was a tramline running from Haymarket to Newhaven. The line to be built and operated by his company New Edinburgh Tramways Co Ltd (NETCo) for a (relatively) modest sum using NETCo’s patented ‘City Class’ tramcars and ‘LR55’ track.

It seemed a good enough idea for the council’s Transportation Committee to scrape together £75,000 from various sources and to ask the Edinburgh consultancy DTZ Pie-da for a ‘technical and financial assessment’ of Lesley’s scheme. By the end of 1999, however, NETCo were out of the game, although the idea of a tramway had stuck. Lesley was later to complain to an academic conference that when Edinburgh invited bids for the tramway NETCo were not even put onto the shortlist.

Almost at the same time Waterfront Edinburgh Ltd (WEL), begetters of glitzy waterfront regeneration projects in Leith and Granton, began to examine the prospects of a rapid transit system linking Leith Docks to the city centre. WEL’s consultants considered just about every mode of transport short of stretch limos. They looked at buses, a monorail, guided buses, a light railway, even a Shanghai-style ‘maglev’ (magnetic levitation) system. They came to the conclusion that guided buses or trams were probably the best option. Over time the feeling grew and hardened that trams were the way ahead.

In May 2002, the City of Edinburgh council set up Transport Initiative Edin-burgh Ltd, a wholly-owned, arm’s-length company known by its initials tie (note the modish lower case). Now headquartered in the top two floors of an upmarket new office building at Haymarket called City Point, tie is staffed by transport-industry professionals and ex-council employees, and has four Edinburgh councillors on the board. According to its last published accounts (in March 2009)tie’s 84 staff were paid £4.8 million (an average of £53,300 each) and saw their wages go up by 4.6 per cent.

With tie in place and with the enthusiastic support of a pro-tram Scottish Government (then a Labour-Lib Dem coalition) the Ed-inburgh trams project was under way. And not just the trams. It’s usually forgotten that the Edinburgh trams was one of a number of transport projects handed to tie to deliver. The biggest of those (and potentially even more expensive) was the Edinburgh Airport Rail Link (EARL) which would have a sum in the region of £600 million and which was to prove a major embarrassment for tie.

Here’s how the tramway money-chain works: the cash is dispensed from the Scottish Government to the Glasgow-based quango Transport Scotland who pass it on to the City of Edinburgh Council who give it to their holding company Transport Edinburgh Ltd (TEL) who hand it over to tie who use it to pay the contractors. The tramwork for which the money pays is overseen by a number of bureaucracies: Transport Scotland, the Edinburgh council’s own Transportation Committee, TEL’s Tram Project Board and, of course, tie (which has its own audit committee).

The Tram Project Board (TPB) is another cog within these corporate wheels which has been given a larger role to play recently. Formerly one of TEL’s working parties, the TPB in February this year was given “delegated authority” up to £545 million which (it is still hoped) will be the final bill for the first stage of the tramway. The plan is for the City of Edinburgh to find the £45 million while the other £500 million will come from Holyrood.

In what tram bosses must see as the good old days, the plan was for a stately loop of tramway around the north side of Edinburgh, from the Firth of Forth to the city centre, with a long spur westwards out to Edin-burgh Airport and Newbridge, and possibly even as far as Livingston and Queensferry. There was also the prospect of a third line to run from the city centre southwards to the Royal Infirmary at Little France and beyond. By the end of 2009, we were told, we’d be travelling in quiet, clean, comfortable new tram cars that would be the envy of every city in Europe.

But before a single shovel could be wielded there had to be a consultancy period. Anyone who thinks, as I vaguely did, that a ‘consultancy period’ consists of a few chaps sitting round a table ruminating over tea and biscuits should disabuse themselves of the notion. Consultancy is an expensive business, or at least it was in the case of Edinburgh’s trams. Looking at one of tie’s early business plans, one can see more than 20 consultancies are involved in the project: lawyers, accountants, engineers, transport experts, environmental consultants, land advisors, public relations and legislation-drafting experts. All offering advice at a price.

In principle, it is understandable why a firm would pay experts to advise them. What is harder to comprehend are the two contracts that tie signed many months before the Edinburgh tramway had been given the final go-ahead by either the City of Edinburgh Council or by the Scottish Parliament. One contract was with the French company Transdev, signed in May 2004, to run the tramway. The other came in September 2005 and was with New York’s Parsons Brinckerhoff. Established in 1885, it is the engineering firm that designed Manhattan’s first underground railway line. It was asked to design the systems for the Edinburgh tramway.

The early spend was such that by June 2007 the consultancy and preparation period had cost tie (or rather, the taxpayer) £79 million. Around £17 million of that went to shepherding the council’s two private bills (tram Line One and tram Line Two) through the brambles and thickets of Holyrood. That particular process took almost two and a half years and came to a conclusion on May 8th 2006 when the Queen’s signature transformed the two tram bills into acts.

But the first serious impediment to the project was encountered the year before, in February 2005, after Edinburgh voted three to one against a London-type ‘congestion charge’ of £2 a day to drive into the city. The idea behind the charge was not only to reduce the amount of traffic flowing into Ed-inburgh, but to use the money raised by the charge (an estimated £50 million a year) to pay for the third tram line out to the southeast. That line is now gone but not forgotten: the council says it is keeping its options open with an eye on future development.

Two years later, in May 2007, the tram project faced its most serious challenge when the SNP took over at Holyrood. The new fi-nance secretary John Swinney looked at the costs and decided that Edinburgh could do without its trams. Suspecting this might happen, tie circulated to “all parties with an interest in the future of the tram project” a “post-election briefing note”. The paper pointed out that if the plug was pulled on the tram project, another £35 million would be added to the £79 million already spent bringing the total to £114 million. And dozens, maybe hundreds of jobs would be lost.

The briefing note also revealed that 250 “skilled designers” had been working on the project since 2005 and that “Construction work has commenced with 50 staff mobilised at Leith on utility diversion work and 30 staff undertaking excavation work for the depot site at Gogar.” All of which was under way before the tramway had been given the final go-ahead by either the Government or the City of Edinburgh Council.

At the beginning of June 2007 Swinney asked Robert Black, the Auditor General for Scotland. to look at the way tie was handling both the trams and the EARL projects and report back. Black was not long in reporting. While he found that the EARL project was in something of a mess he was happier with how tie had handled the tram scheme.

Black and his team reckoned that the Leith-to-airport line should cost just over £500 million, well within the sum available, and that there was a “clear corporate governance structure” in place that promised to deliver the trams on budget and on time. “Some slippage in the project has occurred,” Black wrote “but action is being taken to ensure that Phase 1a can be operational by early 2011.” In fact, he even put a date on when the trams would start rolling: Friday, January 21st.

Black’s favourable report on the trams did not persuade the new Government. Ministers wanted the trams (and the Edinburgh and Glasgow airport rail links) scrapped. But when the issue reached the debating chamber on June 27th 2007, an ad-hoc coalition of Labour, Lib Dems, Greens and Tories fought the government. Swinney and transport minister Stewart Stevenson did their best to argue that the money earmarked for the trams and the railway links could be better spent. “We are being asked to take significant risks with Scottish taxpayers’ money,” declared Stevenson. “Quite simply I cannot recommend that we do so.”

That was when the SNP ran into the reality of minority government. Wendy Alexander, then Scottish Labour leader, got to her feet to denounce the SNP motion as one that “oozes with party prejudice and geographic grudge”. She tabled an amendment which “calls on the Scottish Government to proceed with the Edinburgh trams project within the budget limit set by the previous administration, noting that it is the responsibility of tie and the City of Edinburgh Council to meet the balance of the funding costs”.

When the votes were counted the Labour-led opposition parties had won easily by 81 to 47. Parliament had voted for the tram project to continue and there was nothing the Government could do about it. The work had to go on. More than three years on the SNP are still smarting over their defeat. “Sheer political spite,” is how one SNP activist described the opposition manoeuvre to me. “They all knew the Edinburgh trams weren’t worth the cost, but they didn’t care. They just wanted to get one over on the SNP.”

Every time another tram crisis appears the SNP administration goes into ‘don’t blame us, blame them’ mode. It’s an attitude that extends to the SNP group in the City of Edinburgh Council. The group leader and deputy council leader Steve Cardownie and his colleagues have never ceased sniping at the trams, although they now accept that the tramway is going to happen and have decided to abstain from voting on this issue.

The SNP may have done their best to dump the trams but they’re certain to carry some of the blame. So far as the disgruntled public is concerned the trams are being foisted on them by the ‘government’ and the ‘council’ and they just don’t like it. When I explained to one tramophobe on Princes Street (who didn’t want to be named) that the Government had tried to stop the trams but had been overruled by Parliament his reply was brusque. “Doesn’t matter,” he said. “They should have tried harder.”

There was surely some relief in the tie boardroom after the SNP government’s defeat, but judging by the board minutes of July 10th 2007 there was no rejoicing. The successful opposition amendment had put a cap of £500 million firmly on the government’s money jar. If the council wanted any more tram money it would have to find it for itself. Which meant, the board decided, that “There is adequate funding for Phase 1a but insufficient funding for Phase 1b.” And that called a halt to the immediate prospect of a line running from Haymarket to Granton.

Those minutes make for painful reading. They suggest a board in a state of shock, not helped by the stance taken by Transport Scotland. The minutes for the 10th July 2007 note that “Transport Scotland’s involvement with the tie board has been withdrawn” and that the Glasgow-based quango had turned down an invitation to attend weekly meetings on EARL. The minutes also note that “We are moving to a single project company”, i.e. the Edinburgh trams. Barry Cross, the tie executive in charge of EARL, retired at the beginning of 2008.

Six months after the Holyrood vote, on December 20th 2007, the City of Edinburgh Council approved tie’s Final Business Plan and gave the tramway the green light it needed. By then tie had been up and running for more than five years and had spent large sums of public money. By May 2008 the main contractors were signed up, work began in earnest and by the end of 2009 there were tram lines (although no tramcars) back on Princes Street. In April 2010 a solitary Spanish-built tramcar did make an appearance, but only as a static showcase.

Since then, the original tramway project has shrunk markedly. The first part to go was the link between the airport and Newbridge. Then off came the westward leg between Haymarket and Granton and with it the mile of track along the shore between Granton and Newhaven harbours. The idea of a link with the Royal Infirmary to the south and Livingston to the far west began to look like some distant dream. By the beginning of 2009 all that remained of the project was a single line of 18 kilometres between the airport and Leith.

If, that is, the tramway makes it as far north as Leith. The current suggestion is that for a few years at least the tramway should stop at St Andrew’s square or perhaps Picardy Place. Councillor Jenny Dawe, the leader of the council, is determined that the line should get to the Ocean Terminal in Leith (if not to Newhaven) and if that means borrowing £60 million against future business rates then that’s what the council should do. It’s a financial strategy that has raised many eyebrows.

The tram project is now beset with questions. One of the thorniest is why do we need trams when we have one of the best bus services in Britain? Surely a smallish city like Edinburgh can manage on 630 buses and 57 bus routes? Especially since Lothian Buses is about to spend £12 million on 60 new Eclipse Gemini II buses to bump up its fleet. And if the trams fail to generate the ‘farebox revenue’ that’s expected (or at least hoped for) will they have to be cross-subsidised by the buses? And will that mean cuts to the bus services which serve those parts of the city (i.e. most of it) that the trams will never reach?

There is another question that the public would like an answer to: what has been going on between the German builders and the tram promoters? We got a glimmer of insight into that turbulent relationship in David Mackay’s resignation interview. He certainly didn’t hesitate to blame the delays on the Germans, especially Bilfinger Berger (Siemens is never mentioned). Mackay denounced Bilfinger Berger as a “delinquent contractor who scented a victim and probably greatly underbid, and who would use the contract to make life difficult for the city”.

For their part Bilfinger Berger and the other infrastructure builders did their best to divert the blame with an open letter to Ed-inburgh councillors a few weeks ago. While the letter hints that the firms are seeking extra cash (£80 million is the rumour), it’s for slow-downs and stoppages caused by events beyond their control. They mention “delayed utility work, changes in scope, certain key approvals, ground conditions and so on”, all problems that have “resulted in increased costs and delays for the Project”.

The delays part is certainly true. Ever since the dispute arose in January 2010 the project has been badly out of kilter. Some work has gone on to ‘off road’ sections west of Haymarket and the tram depot at Gogar, but that’s about it. The city centre itself has been quiet. But a lot of that stopping and starting is due to what David Mackay called “the crazy things” found under Edinburgh’s streets. And that’s hard to lay at the door of the Germans.

Certainly Carillion’s end of the project has proved more awkward and difficult than anyone anticipated. A book could be written about the progress of that work. In digging up the streets the workforce came across, inter alia, 100-year-old water pipes, cables from the previous tramway, the remains of a Carmelite priory and a leper hospital, a Victorian water culvert running under Princes Street and more than 300 long-dead corpses lying under Constitution Street in Leith, some of which had lain there since the end of the fifteenth century.

These erstwhile Leithers were former residents of an extension to the South Leith kirkyard that had gone unmapped and unrecorded. “We’ve removed them all for forensic testing,” says John Lawson the city’s archaeologist. “We’ll be trying to find out something about the way they lived and what caused their deaths. It’ll probably take two or three years.”

Dead bodies and ancient buildings are just the kind of thing that brings work to a halt. They all have to be carefully examined by experts and removed for safety. In a city like Edinburgh, where people have been living for around 5,000 years, the possibility of archaeological finds like the 300 skeletons should have been anticipated. We don’t know how much stoppage and delay was caused by that kind of discovery and how much by poor planning and inefficiency. Somebody somewhere may know. So far they’re not saying.

After resigning, David Mackay accused the Germans of bidding low to get the contract and then playing stop-go to hike up their fees. A similar charge was levelled at Bilfinger Berger in Canada in the same month, May 2008, that it signed its contract with tie. That’s when Bilfinger Berger was “terminated” from a $100 million tunnelling job in Vancouver by the publicly-owned utilities firm Metro Vancouver. The Germans claimed that the conditions were unsafe and halted work. Their clients, Metro Vancouver,

argued that their safety plan was adequate and that the German company had “refused to proceed with work”.

“That dispute continues to this day,” says Metro Vancouver’s spokesman Bill Morrell. “We withdrew Bilfinger Berger’s right to work when it was about half-way through. Now we’re pursuing a law suit against the company to recover our costs. But we don’t expect the case to get to court until November 2012. We’ve had to put together another consortium to finish the work but the final cost of the job is likely to be well over $200 million. Maybe more.”

Not that Bilfinger Berger is taking Metro Vancouver’s lawsuit lying down. In June 2008, the Germans filed a counter suit in the Supreme Court of British Columbia claiming that they’d been removed from the job “improperly” because they wouldn’t go along with Metro Vancouver’s safety plan. Bilfinger Berger asked for compensation of more than $22 million, plus interest and expenses, and the return of $30 million-worth of machinery that was still sitting on the site.

In Edinburgh, the delays and the acrimony have added to public concern over the trams. One stage on the tramway which is currently progressing and which is probably worth its £35 million price tag is the rail/tram ‘interchange’ at Gogar (next door to the new depot where the tramcars will be garaged overnight). This is where rail passengers coming from the north will be able to hop from train to tram and be shuttled out to the airport. But until the tram system is up and running, they’ll have to continue their journey into the centre of Edinburgh and then take a bus back out again through the traffic-clogged roads of Corstorphine and the rush-hour jams at the bottom of Drum Brae.

The saga of the Edinburgh tramway rumbles on. The search is now for a replacement for chairman David Mackay. The project’s past has been troubled and its future looks like being stunted. Economically we are not out of the woods. Our banks are still unsteady on their feet, our industry is sluggish and the public remains concerned about jobs and pensions. There’s drastic public-sector pruning on the way, while the threat of a ‘double-dip’ recession has not receded from economic forecasts. Once the present pile of tram cash has been spent that will be it for some time.

There are mutterings that the time has come to write off the trams project completely. That enough public money (probably £400 million) has been spent on a project dreamt up when the economy was buoyant. It won’t happen. Too much money, reputation and political capital has been invested.

Within a year or two we might see trams running between the airport and St An-drew’s Square (or maybe Picardy Place). It will take even longer before there’s money enough to run the line down from Haymarket to Granton, and longer still before we see trams making their way out southwards to the Edinburgh Royal Infirmary or westwards to Livingston and Queensferry.

When the day comes the trams begin to operate (which the men from tie hope will be sometime in 2012) it will be worth remembering that we’re travelling on Spanish-built trams running on rails forged by Austrians and on a tramway designed by Americans and built for us by Germans. And to make sure that it runs properly we had to seek the advice of the French. Our job was to come up with the money, much of which is now held in banks in New York, Madrid, Paris, Man-nheim and Vienna.

It’s been a sorry saga. It will be interesting to see how it plays out in next May’s Scottish Parliamentary elections, whether the SNP is punished for a project it never wanted to undertake. Perhaps it would have been an idea for a portion of the vast amout of money spent to have been used to educate Edinburgh’s populace on what benefits trams would bring the city and what inconvenience to expect before the digging began.

None of that is the fault of enterprising foreigners. The fault lies with us, with our lack of industrial capacity, shortage of commercial nous and the paucity of the engineering skills that once marked out Scotland as a nation.

George Rosie’s Flight of the Titan: The Story of the R34 is published by Birlinn (£9.99).

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