Project risk sees tram cost rise

Click below for a line map of Edinburgh's tram route Enlarge Image

The cost of Edinburgh's trams has risen to £512m, as the contract was signed which will see the first tracks laid by August this year.

Trams firm Tie said negotiations with German and Spanish firms to supply the trams and tracks had been concluded.

The final price is 2.8% higher than in the final business case but still within the £545m set for the project.

BBS, the firm supplying the tracks, is taking on more of the project risk in exchange for getting more money.

The tram infrastructure work, to be carried out by Bilfinger Berger Siemens (BBS), will start on 1 June with tracks being laid from August. Construction is due to finish on 17 January 2011.

Trams are not due to be running on line 1a, which will run from Newhaven to Edinburgh Airport and is often referred to as "Edinburgh's backbone", until July 2011, two months later than originally planned.

A spur from Haymarket to Granton, known as line 1b, was put on hold when the tram plans were scaled back in 2006 amid fears that costs were spiralling out of control.

Tie has now announced it is "committing" to line 1b.

The trams will run through Constitution Street

Willie Gallagher, chairman of Tie, said: "I'm pleased that these negotiations have now reached a successful conclusion.

"These pressures on costs are not isolated to the tram project. The fact is that every major construction project in Scotland and in the UK is and will be impacted by these exact same factors. We have sought to successfully deal with them now."

Jenny Dawe, Edinburgh City Council leader, said: "I am delighted that the intricate and tough negotiation period has reached a satisfactory conclusion.

"This has not been easy, particularly in the prevailing global economic situation, but I am confident we have a fair deal.

"We are now well on our way to delivering an excellent tram project for Edinburgh that will connect vital growth areas in the city and provide a first class modern, attractive and additional means of public transport for residents and visitors."