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Glen Newey

It might have been synergy. Last weekend Edinburgh’s new tram service opened, passing the newly refurbished and enlarged Haymarket station, just months before Scotland hosts the Commonwealth Games and holds its independence referendum. The trams are quite nice. They offer on-board wifi and public service notices in minuscule (‘have you validated?’). They creep along as softly as a caterpillar over cashmere, and sport stripes in the council’s signature offal colour, the legacy of Walter Scott.

In fact, seeming synergy is mere serendipity. Edinburgh’s tram system was meant to open in 2011. The construction project is a hangover from the NeoLab scamalot days, when public and private, state and shyster, could doss down together like the lion and lamb, and zero-sum was old-thinkers’ lore. The grift is beautifully simple. Basically, public works tendering is a blind Dutch auction. So you low-ball somewhere between your lowest educated guess about rival bids, and the threshold below which your own still-lower estimate becomes risible. You know that if you land the contract, it will be too late, when the full costs come to light, for credibility-minded politicians not to throw good public money after bad; you know that your co-tenderers know (and know that you know) all this. So, never knowingly underbid, you pledge the world for a song. The predictable result is a massive overrun on costs.

The tram’s launch has elicited nary a whoop from the usually whoop-happy Alex Salmond. That’s not surprising, since in 2007 the SNP minority government in Holyrood tried and failed to abort the scheme, the brainchild of the Labour-dominated city council. Holyrood’s own building costs notoriously came in at £400m, or 900 per cent above original estimates; with the tram, there’s an overshoot of £231m on the approved £545m estimates, and counting – the city council will have to shell out a further £280m in interest payments over the next thirty years. The main contractor, Bilfinger Berger Siemens, tacked £54m extra onto estimates after submitting 816 notices to claim by the end of 2010. In 2010 David Mackay, the chair of Transport Edinburgh Ltd., described BBS as ‘a delinquent contractor who scented a victim’. Mackay promptly resigned.

But even these figures belie the gulf between bids and delivery. The extant track is but the limbless torso of the one projected at tender: it now runs from the airport, via Murrayfield, up West Maitland Street and Shandwick Place, then via Princes Street to its terminus in York Place (the horizontal portion of the maroon line on the diagram).

Originally the track was meant to go all the way along Leith Walk to Ocean Terminal, down a long slope that would have posed, I imagine, much bigger surveying and engineering challenges than the completed part along the bowling-green-flat Princes Street. Moreover, it was to loop back towards the city centre via the rundown Granton district, thereby helping to regenerate the area. A continuation line was meant to run west to Ratho and Newbridge. During its travails with BBS the council contemplated either scotching the scheme entirely or cutting off the track at Haymarket, a mile west of the city centre – a proposal that was ditched after protests from Edinburgh’s chamber of commerce. Granton remains unregenerated.

Edinburgh city council is now set to sue tie, its wholly-owned (and wholly lower-case) subsidiary wound up in 2011; tie itself initiated a long-running legal dispute with BBS during construction, accusing its contractors of ‘slow mobilisation, poor quality of design work’ and ‘late delivery’.

Meanwhile, work continues on Scotland’s major capital project, the new Forth road bridge. The winning consortium at tender, Forth Crossing Bridge Constructors, came in at £790m, after the Scottish government put up £10m to cover tenderers’ costs. That figure is now £1.45bn on the finance secretary’s 2014-15 budget estimates – trumpeted by him as a reduction from £1.6bn or from £2.3bn, depending on whose figures you believe. The bridge is due to open in 2016; the final tab is anybody’s guess.


  • 6 June 2014 at 4:28pm
    AllanLRB says:
    The new trams are great but the sad thing is it'll be years before anyone dares to suggest extending it. So maybe leith will see it by the mid 2020s.