THE former chief executive of the firm in charge of setting up Edinburgh Trams believed he could have got a better deal for taxpayers over the controversial project but was "frozen out" of key talks.
Edinburgh Trams: Case for £165m Newhaven extension backed by councillors
The Edinburgh Trams Inquiry - which is examining how the project ended up £231m over budget and three years late - heard that Richard Jeffrey, then chief executive of Tie - the arms-length firm tasked with delivering the project - was unhappy with the deal negotiated between Edinburgh City Council and the trams consortium Infraco in 2011 to get the stalled scheme back up and running.
Edinburgh Trams: Case for £165m Newhaven extension backed by councillors
It resulted in the overall cost hitting £776m.
The inquiry before Lord Hardie, pictured above, heard from Alan Coyle, a former council finance manager, at the end of week three of the probe who said key figures at Tie believed separating from the contractors and potentially finding new builders could have cost less.
Edinburgh Trams: Case for £165m Newhaven extension backed by councillors
Mr Owen was quizzed by inquiry counsel Ross McClelland over the price of £362.5m that was agreed to settle with the contractors and continue with the project.
Edinburgh Trams: Case for £165m Newhaven extension backed by councillors
Mr McClelland said that price was agreed by then council chief executive Sue Bruce, pcitured below, and Tie chairman at the time Vic Emery, as well the council's finance director Donald McGougan.
Above: Sue Bruce
Asked by Mr McClelland "What about people from Tie?" he said: "I don’t think the people from Tie thought it was a sensible price.
"I think the people from Tie thought they could have got an agreement of separation that would have been more financially advantageous."
Edinburgh Trams: Case for £165m Newhaven extension backed by councillors
Asked about Mr Jeffrey he added: "I don’t think Mr Jeffrey was happy with the deal."
He said this was also true of Stephen Bell, the Trams project director.
The inquiry heard that in a summary of the mediation council negotiator Tony Rush had written: "Richard Jeffrey was in the main frozen out of the decision-making process by the principals but at all times was given the chance to comment and object which he did."
Edinburgh Trams: Case for £165m Newhaven extension backed by councillors
Asked what he understood by being "frozen out of the process" Mr Owen said: "I would say omitted from the lead discussions with Sue Bruce and Vic Emery."
Above: Vic Emery
Mr McClelland said: "So the chief executive of Tie formed no part of the decision making process?"
Mr Owen responded: "I wouldn’t say he didn’t form any part of the decision making process, I think I would say was given every opportunity to contribute but I think very much the discussions were led by Sue Bruce and Vic Emery."
Edinburgh Trams: Case for £165m Newhaven extension backed by councillors
Costings over reaching a settlement with Infraco to break the deadlock over the project, mothballing it and looking for a new contractor varied significantly.
Trams chiefs and contractors were involved in a "horse trade” during round-table mediation talks over the costs of the scheme.
Edinburgh Trams: Case for £165m Newhaven extension backed by councillors
The council first pitched a settlement figure of £304m before the Infraco consortium came back asking for their payment to be at that stage to be £404m, which would have meant an overall cost of £814m to the council with all other costs added.
The council then came back with a figure of £362.5m for the contractor which was eventually agreed and with other costs added took the total close to the final bill of £776m.
The inquiry heard mothballing the project would have cost between £645m and £687m, while costings for finding a new contractor varied between a maximum of £698m to £1.1bn within the space of three months during 2011.
Edinburgh Trams: Case for £165m Newhaven extension backed by councillors
Asked about this gap Mr Coyle said previously unconsidered costs and risks were added.
The inquiry continues.
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