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Contractors make a deal on £776m Edinburgh Tram

Work is set to begin on the £776 million Edinburgh Tram line after the city council and contractors came to agreement yesterday.

A settlement between the City of Edinburgh Council and the consortium of German contractor Bilfinger Berger, Siemens and CAF, which will build the tram line from the airport to York Place, was confirmed yesterday after “intensive negotiations”.

The council said terms could be met after greater certainty on the funding and the route were provided earlier this month.

Remedial work on Princes Street is scheduled to begin this month with a timetable for other works to be announced shortly. The line is expected to be completed by the summer of 2014.

Council chief executive Sue Bruce said: “An incredible amount of effort has gone into addressing all the issues that have made this such a challenging project. However, the real work begins now on getting the line finished and the trams running.

“In doing so, I’m very pleased to welcome Transport Scotland ‘s involvement which will see our staff and theirs working closely together as we look to enter a new phase in the project’s history. As with any major construction project I’m sure we will have hurdles to overcome, but our new governance and operational arrangements are aimed at dealing with those as efficiently as possible.”

The council said improved governance arrangements are being put in place, including an all-party political oversight group.

Turner and Townsend is currently in the process of being appointed as the council’s project management consultants. Transport Initiatives Edinburgh (TIE), set up to oversee the scheme, will be wound up, with its previous functions passed to the council supported and by Turner and Townsend.

The Scottish Government is providing £500m of the project’s funding through Transport Scotland, with the rest coming from the council.

Earlier this weekthe Scottish government confirmed that a £72 million grant, which it had witheld, will be reinstated now the route to St Andrew Square has been confirmed.

The council has calculated that the overall budget for the project is now £776m, comprising of a base budget of £742m and a risk allowance of £34m. This increase of £231m above the original project budget of £545m will be funded through the council’s prudential funding facility.

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