30/08/2011 Newsnight Scotland


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On tonight's programme: If it is at all possible, given the


history of this farce - another day of complete absurdity hits the


Edinburgh trams. The Scottish Government - which had


been clinging to the "nothing to do me, guv" mantra suddenly pops up


with a threat to withdraw funding if the line doesn't go to St


Andrews Square. "You're sabotaging the whole project," screams the


opposition. Is anyone involved in this not just playing politics with


hundreds of millions of pounds of our money? Good evening.


It reads like another episode of a soap opera that stretches


credibility to the limit. First, we learned of a council meeting this


Friday to presumably do another spectacular U-turn. Then, John


Swinney intervenes to tell everyone that he'll be signing no more


cheques unless the tram line goes to St Andrews Square. You'll recall


that last Thursday, the council, much to the surprise it would seem


of even some of those who proposed it, decided the line should stop at


Haymarket. We'll ask the Finance Secretary just what's going on


shortly, but first Catriona Renton spent the day amongst the stunned


For commuters, it has been a living hell. Just when it seemed the


triumph saga could not go further off the rails, it did. This morning,


the Scottish government said it would withhold �72 million, the


balance of the �500 million of taxpayers' money they reluctantly


agreed to spend on the trams in the first place. But Thursday's


decision from councillors, that the end of the line would be at


Haymarket, was the last straw. And once again the contractor is about


to announce revised costs for changing the terminus again. It is


a project that has lurched from disaster to its failure. For 18


months at the other end of Princes Street's was chaos, causing hassle


for locals and businesses. The original plan was for the tramline


to run all away from the airport through the city centre down past


here. That ambition has long disappeared. It has caused a


considerable amount of money to restore this part of the road, to


say nothing of the damage to local businesses. Now, the question is


what has all that been for? about a year, the straw was


struggling. We had to close another straw as well because it was in the


centre of town. -- another stall. Do you think whatever we end up


with will be worth what you have gone through? Not in the slightest.


Not at all. We think there should be some sort of compensation for


business owners in this area. Underlined just got even shorter.


Last week, councillors rejected plans to borrow an extra �230


million to run the line into St Andrew Square. He at Haymarket this


could be the place where the trams do or do not terminate, but there


was work scheduled to start here a week on Saturday, to go on until


spring 2012, lanes -- Lane track and overhead cables. That decision


is currently on hold. If it does go ahead, that will mean a more re-


routing and destruction and of course lots of more noise. And what


on earth does the Edinburgh council tax payer make of it will? What do


you think of the tramp situation? Well, I have had three letters in


the -- in the Scotsman this week expressing my opinion. They should


stop the whole damn thing. It has caused so much destruction. I can


see nothing in its favour. It is a joke! I think it is a farce, a


complete waste of money. It is an embarrassment for the city. It is a


bit silly. Very badly planned. just then the whole thing is


ridiculous. They should never have done it in the first place. But so


much time and money has been spent of an -- that you cannot really


back out of it. It has just gone five o'clock and councillors across


parties are meeting together trying to thrash out some sort of


consensus about which track to go down ahead of Friday's meeting. Now,


here is a nugget, from the report for business and economic Research.


It reports that to pave the whole road along the original route with


gold would cost �361 million. A mere fraction of the estimated


billion pounds that some believe the tram project will now reach.


The Scottish government says the report is deeply flawed, but it


makes you think. The Finance Secretary John Swinney


spoke to me just before we came on air. I began by asking him what he


had announced today and why. What I said today is that in light of the


City of Edinburgh's council's decision to terminate the tram


project at Haymarket, I think this is such a substantial deviation


from the original plan that ministers had reluctantly agreed to


find that we no longer could provide any further finance for the


project. It concerns that I have that the Haymarket route does not


take the trams into the city centre, which was a key part of the


operation of the tram project. Also, the project would require ongoing


financial subsidy from the public purse, which in the current climate


is an justifiable. So because of those standard changes to the


project, I made it clear to the council that the government will be


providing no more funds. What you expect to happen now? The council


has decided to consider this issue at a special meeting this Friday.


Officials of the council I am sure will be working on the alternatives


for the council to consider. What I made clear in the communication


from ministers to the City Council today is that ministers are


prepared to consider alternative proposals that would be more


consistent with the original design of the scheme stop -- the scheme.


These alternative proposals might be more expensive and you would


reconsider the funding, which you? I made it clear in 2007 when we


accepted this vote which went against us in Parliament, and all


of our opponents required as to guarantee funding for the project,


that we would provide �500 million as a maximum. We will not be


increasing that funding. I made it clear to the City Council today


that the way in which they intended to spend a proportion of that


public funding was unacceptable to the government and I was not


prepared to release funding to relate -- to allow that to happen.


Many listening to this tonight will be thinking why were you prepared


to release �450 million worth of fonts, over 90% of this project,


when not even one-third has been completed. Where was your due


diligence when it became painfully obvious to everyone involved that


this was not working was Mark that this was not working? The due


diligence was to make sure the money was being spent in the way it


was intended and that all requests for payment were appropriate and in


order. But you cannot be satisfied as to that. Even on that test alone,


you as a government surely cannot be satisfied. What I am satisfied


about is that the money that has been spent on this project to date


has been spent for the purposes of that project in a way which was


properly administered and accounted for. What we have to question of


course, and these will be the issues that will be material to the


public inquiry taking place, is why the costs increased so


significantly at a time when the government has been able to deploy


considerable skill and effectiveness in bringing major


capital projects not only in on time but in some cases under budget.


And you had the expertise of Transport Scotland to help you do


this. When you saw this was floundering years ago, would it not


have been politically responsible to that given the transport


Scotland expertise to this project rather than to be as grudging as


you have been in your support of it? It was clear from the outset


this was not a project we supported, but we accepted the will of


Parliament and I accepted it and Adam -- I agreed to fund it to the


tune of �500 million. But we have to be clear about where


responsibilities lie. The responsibilities for managing and


delivering this project rest on the City of Edinburgh Council. The


Government's was a principal funder of that project. What you can see


from any analysis of major public projects is where there is more


than one party involved in the governance, that can lead to real


project uncertainty. So the control of the project Rusted exclusively


with the City of Edinburgh Council. Let us look at that uncertainty.


You have now made conditional that funding on a proposition that the


council abstained on voting last week. The SNP councillors have


maintained a principle of consistent opposition to the tram's


project. What are would say to all councillors in the City is that I


do not think anybody could look at the events of the last few days to


see an absurd decision that was taken by the council last Thursday


being able to be taken forward in this fashion. So I appeal to


councillors in the City of Edinburgh to look in a considered


way at a way forward for the project. The government has taken


decisive action to ensure that that can be taken forward by the council


and it is now up to the councillors to respond positively to that


challenge. The bottom line is you have left no option at all. They


either do what you want or it folds. What the government cannot


countenance is the design of a project which fails to meet any of


the central propositions to which it was originally intended and to


which inquires -- requires an on going public subsidy. That is not


acceptable. That is the issue that has to be addressed and the


intervention that ministers have it made today is designed to do that.


Listening to that is Councillor Lesley Hinds, Labour's Transport


Spokesperson, and, for the Conservatives, Councillor Jeremy


Bank you for coming in, you had a meeting this evening with the


contractor has. -- thank you. And with council officials. What was


discussed, Jeremy Balfour? We had an update on where we are since


last Thursday and in what of discussion is taking place in


regard to this bombshell by the SNP. They have suddenly intervened in a


local project and have said you cannot have the money to do what


the council wants to do. And the SNP are clearly split on this. One


of you from the national government and a second from the local council


-- one opinion. The SNP policy for the people of Edinburgh is no


longer credible. What is no longer credible is the fact this project


has been so badly managed that the SNP government would be failing in


their duty and their legal obligations were afraid to provide


you with any more cash, unless she come up with a profitable route,


which is not what you are proposing at the moment. A few people do not


understand, there is a difference between a project and a contract


and what we decided last Thursday was we wanted to get out of a


contract as soon as possible and get the trams to Haymarket as. We


then said we wanted to we procure to get the tram as far as we could


with the money. How much would that cost? We have to wait and see. And


those figures would only be available at that stage Sam Michael


White is that acceptable to wait and see. -- at that stage. The


public have lost confidence in those figures and now you say it


will cost more and when you get that done, it even more, and we


cannot tell you what that will be. This has become just incredible,


literally. What is happened is week as councillors have been given


advice. We have been given reports and have acted on those. And we are


not just councils -- and these are not just council decisions,


transport Scotland, the Scottish government, all said the figures we


had when we made the original decision that SNP councillors


backed was credible and financially all right and we went ahead on that


basis. We have been let down by other people's. Lesley Hinds,


looking at the specifics of what you discussed with the contract is


tonight, what new figures did you get, what is your understanding of


what it would cost if the contract was cancelled? The discussion, I


thought it would be a way forward. And it was reasonably constructive


and was the first time in four years all the parties have been


sitting round to discuss that. And it was the first time we had a


discussion with the contract has. People will be absolutely


astonished that is the case, sorry to interrupt you, but I imagine a


lot of people will be thinking, how can we have got to the stage and


this is the first time you have had this to -- you have had


constructive discussions about the specifics? What figures you can now


save are absolutely the case? understand it, if the contract was


cancelled, it would be around �161 million to cancel it and that


funding would come from the revenue budget from next year which would


mean cuts. You are asking the figures are we have been given this


evening and I am trying to explain that. Those are the figures we have


been given today. I want to confirm something, is it your understanding


of the contract consolation costs are negotiable? -- that the


contract. And understanding is that is the cost we have been told, 161


million -- our understanding. Conflicting advice has been given


to the council, undermining public confidence, because the advice is


that these contract costs are negotiable were they to be


cancelled, and secondly that Lothian bosses for example could


refuse to subsidise this whole enterprise -- bosses. So there are


a lot of a knowns. So could the contract cost speak negotiable and


do they not have to be paid in a year? -- Could the contract costs


be negotiable. We are going with what we have been told and that is


frustrating because the figures can change from one day to the next.


What was fascinating about your interview with John Swinney is his


SNP government in 2007 took transport Scotland away from the


management of the tram company, they took them off and washed their


hands of this. Then all of a sudden, of this week, they come forward and


say they will do with -- say they will withdraw funding. John Swinney


has had no responsibility for this in four years and insisted


transports Scotland came off the project management board. But we


have also made it clear that the government has responsibilities not


to finance projects there are not viable. They have to exercise


responsibility in how they spend public money. They have supported


you but now say, as many people agree with, that stopping it at


Haymarket is an absurd decision, to quote the finance secretary. That


is the feeling among a lot of people, so you cannot make it


financially viable to stop it at Haymarket. We now hear that you do


not have costings for that. The made a decision on the facts and


figures we had and we believed the Haymarket option was the least risk.


We were given a guaranteed prize for the Haymarket option but not a


guaranteed price for the option of St Andrews Square. If I could just


say about the subsidy, I have met with Lothian at Transport today and


they have said they had no involvement at all about the


figures regarding the option to go to the Haymarket. They were asked


for input into the auction of St Andrews Square and New Haven but


have had no involvement in Haymarket figures. So we have to


question as elected members that information we are being given at


3.1 million, to �4 million, which is what they would say would be an


operating cost two Haymarket, and I have to question the figures we


have been given and by eight -- we have been given by officials and


others who come forward with these statistics. Jeremy Balfour, what


comes out is astonishing. You are basing so much of the cost of this


project on figures that have never been discussed with anybody. Are


you satisfied Lothian at transport is obliged to pay this subsidy? --


below the and bosses. Week as a Conservative group were the only


group who wanted to terminate this contract -- we as. The amazing


thing that happened is that the SNP and for the last five years have


said they opposed the tram project were not willing to vote with us to


terminate this -- who for the last. If we had terminated at last


Thursday, we would not be discussing it tonight. --


terminated it. What about the utilities? A survey recently


indicated 550 conflicts between the final design and positions of


utility pipes and cables on Princes Street particularly into Shandwick


Place. The contingency budget for this has been cut to under 10%,


which is the absolute base people normally put in for an emergency


contingencies in this project. Is it inevitable if this project goes


ahead at Princes Street and up Shandwick Place that there will be


multi-million-pound problems in terms of utilities? That was a


concern in regard to St Andrews Square a we did not have a


guaranteed fixed price. -- and we did not. We thought there was too


much risk to go to St Andrews Square and so we propose to


terminate the contract, at the preferred option, and the least bad


option was to go to Haymarket. Too much risk was to go to St Andrews -


- St Andrews's. You do not have any option but to change your mind


about this on Friday, do you? not have a report or information in


front of me and we are waiting and trying to find out as much as we


can before Friday. I have a concern that by Friday, we as elected


members will not have the information to make a really good


decisions. Will you ever have that information? I feel that is the


frustrating part for elected members. The administration, the


SNP and Liberal Democrat administration who are running this


council, they keep everything to themselves. Today was the first


time I feel we sat around as all groups to take a way forward for


this project. Thank you both. The papers tomorrow, the Herald is


leading with the Old Firm in backlash over sectarianism. And the


Scotsman, the Catholic QC warns of bigotry after his split from the UK.


That's all from me. I will be back Only one more day left of this


course a map and it looks like it will be another cool day. -- of


this bad summer. Some sunshine, but the cloud will fill in into the


afternoon. Quite bright for west. It looks like it will be dry.


Drive through the Midlands and towards East Anglia, a little


sunshine. -- it will be dry. Not bad on the south coast,


particularly Cornwall and Devon. Temperatures up to 18 degrees.


Underneath the cloud, as most of Wales will be in the afternoon,


temperatures a little lower. Rather cool in Northern Ireland again,


light winds and if you see sunshine it will not be too bad, but for


most of the day it will be cloudy. We start with sunshine and increase


clad in Scotland, some light showers, but many places will be


dry. Quite cloudy. Temperatures on Wednesday a little up on today but


it warms up fervour on Thursday with brighter skies and probably


more sunshine -- further. Bigger picture across the UK on Thursday.


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