Researchers in Construction Management

Lowe, J G (2010) Edinburgh trams: a case study of a complex project. In: Egbu, C. (Ed) Procs 26th
Annual ARCOM Conference, 6-8 September 2010, Leeds, UK, Association of Researchers in
Construction Management, 1289-1298.
EDINBURGH TRAMS: A CASE STUDY OF A COMPLEX
PROJECT
John G Lowe1
Department of Construction Management and Economics, Glasgow Caledonian University,
Cowcaddens Road, Glasgow, G3 6BU, UK
The Edinburgh Tram project has proved to be politically contentious, complex, and
problematical since preparatory work on services diversion commenced in 2007. The
proposed network has been reduced to a single 18.5 km line linking Newhaven to
Edinburgh Airport via Leith, Princes Street, Haymarket, Edinburgh Park and the
Gyle. The main contract was let on a fixed price design and build basis to a
consortium of Bilfinger Berger (civil engineering) works, Siemens (electrical) and
CAF (tramcars). Work commenced in summer 2008. An earlier contract for the
preparatory works and services diversions was carried out by Carillion. It appears
likely that the project will not be completed before 2012 rather than the original target
of 2011 and the budget cost of £545 million as included in the final business case
appears likely to be exceeded. The early stages of the project’s life have been blighted
by political disputes between the Scottish National Party on one side, who have
opposed the project and the other political parties including Labour, Liberal
Democrats, Conservatives and Green Party on the other who have generally backed
the scheme. The SNP currently form a minority administration in the Scottish
Government at Holyrood and are part of the ruling coalition with the Liberal
Democrats on City of Edinburgh Council who are the sponsors of the project. Since
the opposition parties at Holyrood forced the finance for the project through there
have been a number of high profile contractual disputes between the arms’ length
project company, Transport Initiatives Edinburgh and Bilfinger Berger. The
resolution of these disputes has caused several delays to key operations for the
project. This paper will analyse implications of the political disputes and way that the
project was let on the progress and cost of the project.
Keywords: project management, political issues, dispute resolution, game theory.
INTRODUCTION
This paper is intended to illustrate the difficulties involved in project management on
a highly politicised project. The network can be broken down into two distinct stages.
The first is a largely on-road line starting at Newhaven in the north of the City and
continuing via Ocean Terminal, Constitution Street and Leith Walk to St Andrews
Square. It then proceeds along Princes Street and Shandwick Place to Haymarket. The
second section is largely off-road and commences at Haymarket following the main
line alignment to Edinburgh Park before going through to the Gyle Shopping Centre,
under the A8 and across country to the airport.
The two sections present very different challenges. The on-road sector poses no real
technical problems apart from the need to divert services from directly under the tram
1 j.lowe@gcal.ac.uk
Lowe
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line or to provide side access manholes for services which cannot be diverted. The real
issue is that of traffic management during the works and the disruption to local
residents and businesses. In the case of the off-road section of the works the disruption
faced is less of a problem. The challenge here is the construction of retaining walls,
bridges, viaducts and a tunnel often with poor ground conditions. Working alongside
a main line and constructing two bridges over the main Glasgow-Edinburgh main line
involves dealing with Network Rail. They can impose restrictions on the hours
worked. Some work may only be carried out overnight at weekends. It is fair to say
that the on-road section faces logistical and political issues while the off-road section
will have to deal with technical problems. The project has been bedevilled by
contractual disputes between the Project Manager (TIE) and the main infrastructure
contractor (BBS). This has led to the most of the working on the on-road sections
being suspended because of the refusal of BBS to start work until unspecified issues
were resolved. This led to the Client considering whether to remove the BBS from the
project.
THE PROJECT
Background
Trams have been considered as the solution to Edinburgh’s traffic problems since the
1980s. Edinburgh lost virtually all its suburban rail system in the 1960s. Only the line
to North Berwick and the reinstated service to Bathgate remain. Edinburgh overcame
this as car ownership was amongst the lowest in the UK and bus usage was very high.
However over the last twenty years, car ownership has steadily increased towards the
national average leading to increased traffic congestion. In a number of roads, such as
Princes Street and also Leith Walk much of the congestion is created by large volume
of well patronized bus traffic. The only substantial area of land available for housing
to meet demands from the rapidly expanding City population was on the Leith
waterfront. Building on the scale expected would put great strains on the bus service
and increase the congestion along Leith Walk and Princes Street. Obviously things
would be much worse if the newcomers opted for car travel. A full metro system was
always going to be ruled out on the grounds of cost so trams emerged as the only
viable solution. A consensus emerged on the City of Edinburgh Council (CEC) in
favour of a tram network supported by all the parties represented. Labour were the
majority party but the scheme was also supported by the Conservatives and Liberal
Democrats. The CEC allocated the management of the project to their ‘arms-length’
company Transport Initiatives Edinburgh (TIE).
The parliamentary bill
In order to progress the proposed tramway a Parliamentary Bill was required. This
gained the approval of the ruling Labour and Liberal Democrat coalition as well as the
opposition parties. Contrary to the popular misconception the project was initially
backed by the Scottish National Party (SNP) with their then Transport spokesman
Kenny MacAskill being particularly vociferous in support between 2000 and 2002.
The Scottish Executive announced the approval of funding in 2002. The project had
the support of all parties on CEC and most of the Scottish Parliament plus also the
local Chamber of Commerce and the business sector. This consensus was broken by
the SNP. According to the respected SNP member of the Scottish Parliament,
Christopher Harvie, this about-turn was engineered by Kenny MacAskill who was
standing for election in for Edinburgh East constituency in the upcoming 2007
election. Edinburgh East was the only seat not included in the proposed tram network.
The SNP were not a force on CEC until 2005 when a Labour councillor and Deputy
Edinburgh trams
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Provost Steve Cardownie defected to the SNP forming initially a group of one. The
Parliamentary approval was two lines. One was a loop linking the City Centre and the
Leith waterfront while the second linked this to the airport with a branch to the
Newbridge industrial estate. The first phase (1A) was prioritized. This involved a line
from Newhaven to the airport. The remainder of the loop was labelled Phase 1B and
Phase 2 while the Newbridge branch was to become Phase 3.
The network funded
The Final Business Case was under preparation while the Scottish Executive voted
funds to commence design of the network plus preparatory and investigative works.
Before the final approval could be given the 2007 Scottish Parliamentary elections
took place. This gave the SNP a one seat advantage over Labour although well short
of an overall majority. The SNP signed a concordat with the two Green Party MSPs.
This effectively precluded any coalition not involving the SNP other than the
implausible Labour-Liberal Democrat-Conservative grand coalition. The outcome
was a minority SNP administration with critical support from the Greens. Meanwhile
a new Council was elected in Edinburgh. The new proportional representation system
dramatically reduced the Labour representation and contributed to a big increase in
SNP numbers. The Liberal Democrats became the largest party and the Greens gained
representation. A Liberal Democrat-SNP coalition took control. The start of the
project was delayed with some service diversion work put on hold by the incoming
minority SNP Administration at Holyrood while they commissioned a report by Audit
Scotland (2007). This gave the project a clean bill of health. The new First Minister
Alex Salmond wanted to scrap the project. However a resolution backing the project
was passed with the support of all opposition parties including the Greens and the
former SNP Edinburgh Independent Margo MacDonald. After some delay, the SNP
leadership agreed to give £500 million funding to the project, possibly with the threat
of a motion of no confidence if the will of Parliament was frustrated. It was also
necessary for the SNP to keep their Green allies on side. CEC pledged to contribute
£45 million to the project. This was intended to be raised in part by charging for
planning applications on or near to the proposed tramline.
Political issues