22/06/2011 Newsnight


Comprehensive coverage of the day's important national and international news stories, presented by Gordon Brewer.

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to staunch the loss of life and Tonight on Newsnight Scotland, the


fox at the Edinburgh tram project takes another bizarre twist. --


fiasco it turns out that it will cost more to mothball it than to


extend it. Good Evening. It's a bargain, nothing for just �7 50


million. That's the eye-watering cost to the taxpayer for cancelling


Edinburgh's disastrous Tam project. A truncated scheme would still be


even �150 million over budget. I'll try to find out why and what the


money might have been better spent on in a moment. Government sources


have told the programme that ministers would enthusiastically


back a public inquiry. Kenneth # There he was, digging his hole


# Hole in the ground # So big and sort of round it was


# And there was I # Digging it deep... # Dispute,


disruption and delay. That's all the nation's capital has to show


for its grand trams project. As for the bill, which makes the overruns


of the Holyrood building seem positively puny, all of Scotland is


helping to pay that, in return for what exactly? Perhaps nothing at


all. Cancelling would be the best thing. I don't agree with the trams,


but I think it would be a shame to stand there seeing as though we've


spent so much on it. The official report says completing the line


just from Edinburgh Airport to Haymarket would cost �700 million,


taking it from there and to St Andrews Square would increase the


bill by over 10%, not much more the story goes than just cancelling the


whole project outright. Trouble is, there's less than �500 million in


the budget and one, albeit unofficial estimate of how much it


will cost to restore Edinburgh to the way it was, is another nine


figure sum. The people of Edinburgh have learned to take any figures to


do with the tram scheme with a heavy dose of salt. The figures


have been produced with people in vested interests in continuing. We


were told that we'd get lines running to Newhaven for �5 45


million that. Didn't happen and I don't expect �77 0 million to be


the final cost for St Andrews Square if the council decides to go


ahead with that. But the council's transport convenor wants to plough


on with the most expensive option. When you look at the costs, there's


very little between them. When you add in is subsidy required to run


to Haymarket, for example, that brings it close up to the cost for


St Andrews Square, and when you look at cancellation, it in fact,


you would not be allowed to pay that over the 30 years when you


would have a capital asset. So we'd be faced with finding hundreds of


millions of pounds right now. I think that the options, within you


look at them, they have strengths and weaknesses, but the most


sensible option is there by quite a distance. The SNP tried to kill the


project four years ago, but then a minority administration, they were


voted down by the Unionist Partys. On trams, the SNP have lost the


argument. The Transport Minister claimed as minister that the costs


were out of control. They're not. Does Wendy Alexander accept that


there must be constraints on the ability of other parties to commit


the Government or to infer the Government should be committed to


financial commitments out with the budget process? I say to the


Cabinet Secretary, if you have one shred of evidence that costs were


out of control, the word "cost" would have appeared in your


statement today. The city council Labour group today said things were


fine back then, they claim it was the Liberal Democrat SNP


administration which succeeded them that made a mess of it. The SNP


don't have a councillor on the board of the tram company, at least


until recently Labour did, alongside two Liberal Democrats and


a Tory. # We're on a road to nowhere... #


It is actually possible to build and run tram projects, they exist


in many European cities, albeit in some which were fairly easy to re-


develop after World War II, but more recently, the British Isles


This is not the first time a botched job has been dubbed


Edinburgh's disgrace. Work on the national monument began in 1826 and


was never completed. Delays and cost overruns on the Holyrood


Parliament project led to a public inquiry, but at least the


building's been up and running for years. Now there are calls for a


similar inquest into the trams. One focus would be the contract between


Tie and the contractors, which has not prevented several costly


disputes. We need to work out what's gone wrong and find out


whether the figures being banded about are true. Part of the problem


is that the firs keep changing, we need an independent inquiry to work


out really what is going on and how much it will cost to make it right.


Glasgow ease Transport Museum opened yesterday, it has four trams,


four more than Edinburgh. They are not going anywhere, but they are


not meant to. Edinburgh's spent millions before a single tram's run.


Transport Scotland's underlined the distance ministers have maintained


since they tried to stop the project. The Scottish Government


opposed the project, but in June 2007, the Scottish Parliament voted


in favour of funding up to a maximum of �500 million, a figure


that ministers will not increase. The project is, always has been,


the responsibility of City of Edinburgh and the cost of


cancellation, of not taking the tram's project forward, is a matter


for them. To prove Edinburgh could do it once, these pictures, the old


Edinburgh trams which made their final run to the depot, 55 years


ago. Maybe those really were the days. Might even be funny if it


I'm joined from our Edinburgh studio by the Liberal Democrat


councillor, Gordon MacKenzie who's transport convenor at Edinburgh


city council. Seems rather extraordinary that we could end up


paying �7 50 million for this tram project and end up with nothing?


Yes, it does. But we have to be very careful about the figures.


They've come out in a leak today and I can't confirm that because


it's part of an ongoing commercial discussion, but yes, it's


potentially one of the outcomes that we'd have to reach a


commercial settlement with the contractor for them to walk away


from this and we'd be left with nothing for over �70 million if the


figures are correct. -- �700 million. And it would be cheaper to


build a tram network, but it's about �700 million to build the


thing to Haymarket? Yes, again, the figures are subject, in many cases,


to an element of commercial discuss yet, but the figure of �700 million,


there's also the running costs which you would apply to that. The


report suggests there would be a deficit of �3-�4 million a year on


that, Fuad that in, the cost over 25-30 years, today's cost would be


about �7 50 million as well. There's quite a lot of similarity


between the cost to Haymarket and the cost to St Andrews Square from


those figures. And you and your preferred option would be to build


the thing to St Andrews Square which is another �0 million or so,


isn't it? I would caveat it by saying we have to have a look at


the detailed figures. I've not seen the report yet. I've obviously read


the leaked reports and have had a briefing on it. We need to see if


it stacks up, because there's been a lot of figures going around in


the past which have not proven to be accurate, unfortunately. We need


to look at that as well. But the figures to St Andrews Square would


suggest we'd make a surplus of �200 million a year and, on the basis of


that, the net cost to the council is slightly less than the total


cost being suggested. So there are elements of that which can take the


costs up or down relating to whether it's Haymarket or St


Andrews Square, it brings it in to about the same level is the sense


of what I'm getting from the reports. Whichever option you


choose, including mothballing it, you are going to need a couple of


hundred million? Yes. Where are you going to get that? We don't have a


detailed plan on that and that's part of what we'll have to get from


council officers. Do you have a The fall-back position would be to


get an agreement by the Scottish Government on a truncated route.


You would have to get that agreement as a starting position.


The Council would have to raise the money through borrowing. That would


be a very substantial cost to the Council, somewhere in the region of


10 to �12 million per year. That would have an enormous impact. We


want to explore with the Scottish Government and hymn alternative


means of funding the project. -- any. I do not want to close the


door on Nani options. -- any. I am going to lose the discussions on


the detail with officials from his got his Government. I will not rule


anything out. This covers Government may want to rule certain


aspects out. -- at the Scottish Government. We need to see what the


best way his to help Edinburgh to resolve a huge problem financially.


The problem you have is that giving you have spent almost half a


billion pounds and achieved nothing, why unearthed should anybody


believe you when you say that for another 200 million you can get a


tram line to send Andris Square? You do not have Annie credibility.


-- any. Transport Scotland, the Scot has Government have been aware


of the discussions we have been having. -- Scottish Government.


keep using words like vigorous assessment. What you guys have been


doing is nothing short of a national joke, not to mention and


national scandal. You have no credibility left. We have got other


independent people who have not been previously involved. You have


had an lee macro number of them and their Rezai and or get fired. --


any. -- they resign. Many of the officials involved, for example,


the chief executive, he was not a chief executive when the project


kicked off. There are a lot of people with their own personal


reputations who were looking at these figures and will be asked to


endorse them before councillors take it decision. Getting fresh


people in to look at it will help us to raise confidence and the


figures. People do Nat have a lot of confidence and the figures.


Quite rightly so. -- people do not. For presumably you would welcome a


public inquiry? A absolutely. No doubt. It has to be an independent


inquiry. People like myself who have been involved, even people


Butt macro it has to be taken out of our hands. --.... Somebody who


can look at this rigorously and tell us in it where it went wrong,


how it could have been done differently. We do not want to make


the same kind of mistakes we have made here. Presumably you would


also accept that the political leadership and the officials who


have been run in this well after the go? No, I do not accept that. -


- will have to go. People want to have confidence raised in the


figures that come before them. An independent objective inquiry will


tell us what we need to know of that where blame lies. -- to Noel


where blame lies. You have on several occasions sat where you're


now and told me a load of things that never actually happened. --


you are now. I told you what I believed to be true. When I say you


have no credibility left, what is your answer? I have told you the


best information I had at the time. We had information in 2000 and that


said this is a good product. -- 2000 and date. -- do 1008. All 57


of us Papa macro Hans up on the basis of the advice we had. -- put


par macro Hans up. You told me he had won a shed load of cases which


had been independently adjudicated. Not only was that not true, but the


fact it was not true lead to be also -- to the wholesale


reorganisation. I do not recall saying that. If you recall saying


there had been mixed results through mediation. What I said was


the results were mixed. And there were. We want some aspects and we


lost on major points. Do not have go away. We had joined from


Edinburgh by the Labour and Brett city Councillor Leslie Heimans and


Colin Keir, also happens to be an SNP. -- Councillor Lesley Hinds.


Which option would you now Professor of the ones that have


been out land? -- would you prefer. None of them. One of the problems


is we do not get details of the report until tomorrow. That gives


us a week to scrutinise it or ask questions. I do not think any of


the options are ones we would like to consider. What option do you


want? The trouble is we have not seen the report. It will be put to


the Council next week. My real concern is that yet again every Tom


rico macro to a Council meeting, another report comes forward with


different figures. -- every time we There was no political leadership


at the heart of this decision making. Everybody seems to agree


that part of the problem has been the original contract was drawn up


between the Council and the developers, the contractors, which


was done under an Labour administration, so you're not


exactly blame us in this? That is not the case. In 2007 Independent


although Scotland carried out a report and said this Drahm project


was robust. -- tram project. The contract was not actually signed.


It was signed in March 2008. That report said that 95% of that


contract was a set price. It was a set price we would keep do. We were


given assurances by officials that the contract was robust. And 90 per


us - my Nagi 5% of that contract would be kept to. -- 95%. I feel


disappointed. We have had four years of a coalition Council to


have mishandled it. Colin Keir, which of the options would you


favour? I have no real faults on an inner core of them. I have not seen


the report. I have not been briefed. Will it can say -- what how can say


is that this is the worst Ed mack - - nightmare for Edinburgh and the


Scottish taxpayer. It is vastly over-budget. We have not had


anything to do with the management of this. I think it is a little


rich of cancer Leslie Hines. I have a Labour amendment from 30th April


2009, backed by the Tories, saying that not only should we carry on


with the line, but they were looking for the director of finance


to find money for the second line. They obviously knew something.


Aaron the same position as Labour. The SNP wants to come over all


innocent on this. John Sweeney says he will not give any more money to


the project. -- John Swinney. You have been running the Council since


2007. To say you have nothing to do what this is simply ridiculous?


Absolutely not. We have a situation where we agreed that there would be


no input from the SNP into the management of this. That was


because of are or opposition. We never took up the option of a


member of the board. That is a curious way to exercise


responsibility for running Edna? With respect, this is a project we


disagreed with. We wanted nothing to do with this. Hang on. We have


been running Ed Matts. None of this is Al macro fault. -- Edinburgh. It


has turned into a national catastrophe. I agree with you. It


is simply appalling. I have welcome Richard Jeffries's resignation. --


I welcomed. I have not been impressed by the standard of


management. Every report has a negative aspect. Gordon McKenzie,


what is happening now. A few days ago you were talking about flogging


some of the project off to a private developer. You are shaking


your head. What you were. reports say in the press said at a


meeting with the developer. That is correct. They were interested in


funding extensions to the tram network. I said, that is fine, tell


me about it. They told me about it and they went away. The press have


reported that. I have not been tried to flog off part of the tram


network. -- trying. If somebody says, we will do you a line to


Newhaven and operated and you would not have to pay anything up front,


for the long-suffering residents of Leith Walk, who may get something


in return, that would be a good deal, wouldn't it? It might be if


the price was right. You would have to pay either an excess Church or


some sort of lease arrangement. -- charge. We're not in a position to


have a negotiation about extending the tram network of how we have


resolved a contractual dispute. It is a moot point. -- until we have


resolved. Councillor Lesley Hinds, what you want Gordon McKenzie to


do? A want him to show some leadership and I want the SNP to


take responsibility. They will take special responsibility for be


members of the administration and working with it Lib Dems. It is


about time they took some responsibility. They cannot say for


the last four years... Gordon McKenzie needs to take some


leadership and speak to the SNP. do what? I have been speaking to


many businesses and the community. They want to know how much the tram


is going to cost, and what the timescale is. What I am getting a


feeling from is that what is looked for next Thursday is to continue


again and not to make any decisions. And to come back in October. The


Scottish Government and giving strong -- getting strong signals


that there will be some money. At - - giving strong signals. What the


Scart his Government is doing and private is not what they're saying


in public. -- the Scottish Government. I have not heard


anything. What would you like Gordon McKenzie to do? I would like


to see the report first of all. I cannot make a definitive


determination on the back of what I have not seen. I would suggest that


it would ever happens, we have to see what is in the best interest of


the taxpayer. Unfortunately, the work is nowhere near finished. If


what we're hearing his crew, whatever happens, the taxpayer will


take a hit. -- is true. Thank you will. David Mellor is outside the


Admiral City Chamber. -- Edinburgh City Chamber. Councillors will meet


at their next week to did -- to decide the fate of the project.


What is the feeling of the people that Mark? -- Edinburgh?


feeling is one of depression. There is not much to be cheerful about as


you head off to bed. It has clearly been another very difficult day for


elected representatives and officials here. I think the mood on


the street generally is one of growing anger. Deep, deep sense of


frustration. Michael Uoka authorities across the country, the


City is facing difficult Financial Times. -- like other authorities.


They will have to argue for more money to go towards a tram project.


Difficult times for everybody. People in Edinburgh probably find


it difficult to believe that there are people in Scotland who do not


regularly visit Edinburgh. The residents have had to put up with


extraordinary disruption. Tell me Extraordinary disruption over the


years. If we take one particular area, Gordon, Leith Walk, for


example, which suffered very, very serious disruption over an extended


period, as utilities were moved ford the tram lined to be built, an


area now where of course no-one's talking about tram lines even being


laid in the years to come now. The focus, at best, is on completing


this line all the way to St Andrews Square. So take a walk down Leith


Walk, if that's not too much of a pun, and you will pick up on a real


sense of the transport convenor and what he said. People will ask where


is the Liberal Democrat Jenny Doyle in all of this. If we saw gravity


emerging, Boris Johnson wouldn't be to the foredefending the local


authority's position. We hear very little from Jenny Doyle and


there'll be questions increasingly asked about her handling of the


project. The buck stops with her. The phrase that springs to mind is


a great city failed by its elective representatives.


Thank you very much indeed for Thank you very much indeed for


joining us. A quick look at tomorrow's front-pages which are


talking about this issue. Fresh blow for trams as Holyrood rejects


bailout is the line in the Herald. Cost of scrapping now seen as �750


million. The Scotsman, tram cost to reach �700 million even if scrapped.


The Guardian, Obama takes gamble on Afghan retreat, it says,, and the


Daily Telegraph, give voters shares in bailed-out banks. That's it for


tonight. I'm back tomorrow. Good We are left with heavy showers in


eastern England tomorrow. In the afternoon, still heavy showers over


the Pennines in particular across Yorkshire, down into Lincolnshire.


Scattering of light showers in the Midlands. Sharp ones in East Anglia.


The threat of showers at Wimbledon again during tomorrow. Perhaps the


driest weather will be in the south-west of England. Very few


showers in the afternoon. Not as breezy as it was today.


Temperatures still nothing startling.


Wales, South Wales, seeing plenty of sunshine in the afternoon. North


Wales seeing more showers. Across Northern Ireland, a lot of cloud


around, more showers to come again and temperatures only 15.


Not much warmer in Scotland where we'll see more showers in the


north-east compared with today. Probably turning drier in the


south-west. You can see we have some showers there in Edinburgh on


Thursday. There may be the odd one around, even into Friday as well.


Most of the showers in the north- east of Scotland on Friday.


Further south, heavy showers, London, fewer showers in Cardiff,


but it clouds over with a little rain in Cardiff on Friday. Many


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