The Scottish government has confirmed £72million will be reinstated to the Edinburgh tram project while Transport Scotland project managers will be appointed to the troubled scheme.
The project has been plagued by problems in the past and the decision to extend the route to St Andrew Square was recently scrapped, only to be reinstated after outcry over the decision.
Transport Scotland director Ainslie McLaughlin will sit on the new project board set up to oversee delivery of the trams project while the body originally set up by Edinburgh City Council to deliver the trams, Transport Initiatives Edinburgh is now shut down with its previous functions executed by the City of Edinburgh Council, supported by Turner and Townsend.
However a Transport Scotland statement warned of significant infrastructure challenges to come including the Scottish government’s concerns that there are “700 separate instances where utilities may remain in conflict with the project design – some even after they were diverted as part of the earlier utilities diversion works contract.”
Cabinet secretary for infrastructure and capital investment, Alex Neill said: “We made it clear two weeks ago that we were no longer prepared to commit further public money to a route which was not financially viable and which did not deliver the link to the city centre which people rightly expected.
“However, now that that link has been reinstated, it is vital that the remaining stages of the trams project is delivered on time and within the £776m budget that we are advised by CEC is needed to complete the route to St Andrew Square by summer 2014.
Under the new arrangements, ministers will retain a veto over strategic decisions in respect of remaining government funding. CEC has calculated that the overall budget for the project is £776m, comprising of a base budget of £742m and a risk allowance of £34m.
This represents an increase of £231m above the original project budget of £545m will be funded through the Council’s prudential funding facility.
Council officials are now trying to reach a fresh agreement with the construction consortium of Bilfinger Berger and Siemens which has seen construction grind to a halt due to cost disputes.
CEC leader Jenny Dawe had slammed the decision to cut short the tram line and said it would run at an annual £4 million loss. However the project will now run from Edinburgh Airport to St Andrews Square.
She said: “We have been in constant dialogue with Transport Scotland throughout and both parties agreed that it would be beneficial to have a closer relationship in the operational management of the tram project.
“We have a joint interest in ensuring a clean, green and efficient transport network is delivered in Edinburgh and our new working arrangements are a logical extension of the discussions we have had with them.”