An agreement is due to be signed within weeks between the city council and its tram route contractors to draw a line under the two-year row which had threatened to derail the entire project. The breakthrough is expected to clear the way for councillors to confirm next month they will press ahead with the line as far east as St Andrew Square in the city centre - if more than £200 million of extra funding is found.
Councillors decided to pursue that option, rather than cancel the project or truncate the line at Haymarket, after a five-hour debate on Thursday.
The contractual dispute has led to the project costs rocketing and completion being delayed by three years to 2014.
However, the local authority could end up paying for the shortfall twice over if it opts to repay the amount at £14m a year over 30 years, or a total of £420m.
The peace deal will involve the council paying the consortium tens of millions of pounds for changes to the design of the line from Edinburgh airport.
It had claimed these were part of the construction contract, despite the consortium winning the majority of independent adjudications as part of the dispute resolution process.
Steve Cardownie, the SNP deputy leader of the council's ruling Liberal Democrat-SNP coalition, welcomed the impending deal as a "big step forward" and said the move made getting the trams finally running more likely.
The agreement had been due to be signed yesterday but it was postponed until the end of the month for final details to be completed.
News of the pending agreement came as council chief executive Sue Bruce agreed the project had been damaged by local authority-owned tram developers Tie's (the former Transport Initiatives Edinburgh) attitude to the builders, who are led by German firm Bilfinger Berger.
Ms Bruce, who took over in January, said the "delinquent contractor approach" had been harmful, in a reference to a remark by forme r Tie chairman David Mackay, who also described Bilfinger Berger as a "modern-day Dick Turpin holding a pistol to our heads". He quit suddenly last November and was followed last month by Tie chief executive Richard Jeffrey, who he had appointed.
"Tie did take an aggressive approach to the contractor and the contractor responded accordingly," said Ms Bruce.
The agreement will be added to the construction contract as a "minute of variation" known as MoV5, and follows mediation talks between the two sides in March.
The cost of the extra payments to the contractors has been included in the latest £725-£773m estimate for completing the 8.5 mile airport-St Andrew Square section of the line.
A source close the project said: "There isn't a dispute any more, really. Things are progressing on that front - it's not an issue."
Article Source KBG Test Blog (http://rc.kbg.me)
