Councillors in Edinburgh have approved two contracts totalling £128m for the planned extension of the tram network, whose cost has risen by more than a quarter.
Updated: On Thursday (7 March) the council’s Finance and Resources Committee approved two separate contracts for the project.
Last week the city council published the Final Business Case (FBC) for the project, which will extend the network to Leith and Newhaven
Artist's impression of trams at Elm Row
It said that ‘having gone through a thorough tendering process, the FBC outlines that trams to Newhaven can be delivered within a budget of £196m’. However, when the recommended percentage of ‘optimism bias’ is added, the project total reaches £207.3m.
The council said the increase in costs since an Outline Business Case in September 2017 priced the project at £162m were partly in response to changes to the design after consultation, as well as ‘changes in the market to the way major infrastructure projects are priced following the collapse of Carillion’.
The contracts are a Swept Path contract for the notional sum of £22,020,000 (£22m) with Morrison Utility Services Ltd (MUS Ltd); and an Infrastructure & Systems (I&S) contract, with a notional contract value of £105,915,617.50 (£106m) with Sacyr Farrans Neopul Joint Venture (SFNJV).
The November 2017 notices for the two contracts gave values of £25m and £90m respectively.
The Swept Path contractor will work ahead of the I&S contractor to identify and clear any below ground obstructions along the tram route.
The I&S contract covers the design and construction, systems integration, testing, commissioning and bringing into operational service’ of the project.
In a reference to the original Edinburgh tram project, which went significantly over budget, Finance and Resources convener Cllr Alasdair Rankin said the recent procurement process had been ‘exhaustive in its approach, taking on board substantial lessons learned from the previous projects and following best industry practice’.
He said: ‘The Finance and Resources Committee will carefully assess and scrutinise the outcome of this procurement process before arriving at a decision. Awarding the contracts will be subject to a final vote on the project by Council on 14 March.’
If the council votes to proceed with the project, a six-month early contractor involvement period will commence, ‘during which the targeted cost will be fully developed, with SFN JV working closely with the Project Team to test buildability, undertake surveys, value engineer and develop further innovation into their design’.