The first tracks of the Edinburgh tram project will be laid by September 2008, following the recent closure of the contract.

After ‘complex and lengthy negotiations’, starting in October 2007, Transport Initiatives Edinburgh (tie) and the city council have announced the successful conclusion of the deal with Belfinger Berger Siemens and tram manufacturer, CAF.

Last-minute negotiations with Bilfinger Berger and Siemens Group culminated in an agreement which sees a ‘significant’ shift of risk transferred from the public to private sector.

The final piece agreed between all parties is £512M, a rise of 2.8% on the price forecast in the final business case.

Willie Gallagher, executive chairman of tie, said: ‘These pressures on costs are not isolated to the tram project. ‘The fact is that every major construction project in Scotland and the UK is and will be impacted by these exact same factors.’