Edinburgh Tram System Project

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Table of Contents

Abstract
Introduction
Project Description
Management of the Project
Project Management against Theory
Lessons Learnt From Similar Projects and Their Links to the Tram Project
Conclusion
Recommendations
Bibliography
Footnotes

Abstract

Tram systems offer a cheaper and more environmentally friendly alternative to providing public transport to city residents while also serving to reduce traffic congestion. The Edinburgh tramway project, which forms the basis of this paper, was initiated for the same reasons.

The paper presents an analysis of this project in terms of its description and management with references to theories that have been established to address the subject of project management. The project turned out to be one of the most controversial tramway projects in England.

It was characterised by massive delays and changes in the project’s cost estimates. Political matters took the centre stage, with different politicians taking advantage of the controversy that surrounded the project to achieve their interests. Interest in the project was mainly from the Scottish population and politicians.

Scotland’s government was the main financier. The whole project was divided into several contracts that focused on specific sections and phases of the project. Other similar projects in the UK have some connection with the Edinburgh project. As the paper confirms, they offer great lessons on the management of any project.

Introduction

The Edinburgh Tram Network Project is located in Scotland in the United Kingdom. According to Boateng, one of the reasons for the initiation of the project was to support the region’s local economy in terms of improvement of accessibility of various places within it¹.

Secondly, the project intended to promote sustainability whilst minimising significantly the level of environmental damage that resulted from heavy traffic. Another purpose was to solve the problem of traffic congestion in Edinburgh.

Issues such as safety and security of the transport system were also a major concern in the initiation and implementation of the project. Moreover, the project was expected to have immense social benefits to the residents of the areas that the rail line served.

In the project’s scope, the tramline constitutes of a double track that connect the city centre to Edinburgh Airport. The track also links areas of development in West and North Edinburgh. With this hint about the project, this paper begins by providing its brief description.

It also analyses the project’s management process with reference to salient theories that are applicable in project management. Lastly, the paper also provides some key lesson that project managers can learn from this development.

Project Description

Edinburgh Trams, which is run by Transport for Edinburgh Company, is a rail line that stretches from York Place to Edinburgh Airfield. The stretch that covers a distance of about 14 kilometres has 15 areas of offloading and loading of passengers. According to Lowe, work in the project started in the mid 2008².

However, the project was marred with many controversies that led to delays in its official opening. As Crowther reveals, work on a section of the tramway was halted at the start of 2009 because of contractual disputes between BSC and TIE following the former’s request for an extra funding of 80 million pounds³.

The Edinburgh Council felt that the contractors were short-changing it, given that the contract was based on fixed price terms. Much negotiations followed shortly thereafter with the contractors agreeing to resume construction work before mid 2009 whilst operating within the original budget, regardless of the witnessed disputes.

Later, in August of the same year, TIE instituted legal proceedings against BSC over delays in its handling of the project. In most of the disputes, BSC found favour in the court. It received an award of 90% of the additional costs. As McKie confirms, the initial cost estimate of the development was 375 million pounds⁴.

However, Lowe confirms that during the signing of the construction contract, the initial cost figures had risen from 375 million pounds to 500 million pounds⁵. The closing expenditure is estimated at 1 billion pounds, a figure that was arrived at after considering the settlement of the incurred interest charges.

The interest was accruing on a 30-year credit that the committee had taken to cover a shortfall in the project’s funding. The tramway began operations in May 2014 after being behind schedule for more than five years.

Management of the Project

Various stakeholders were involved to help in achieving the project’s deliverables. Hence, their participation in this project had different impacts at different levels. These stakeholders included the government, contractors, politicians, courts, and the Scottish population⁶.

As the main stakeholder, the government provided funding for the project. The government was also involved in the supervision and monitoring of the project. The project was divided into a number of distinct contracts. The various contracts were let to different companies or contractors.

The contractual framework consisted of System Design Services (SDS), Joint Revenue Committee (JRC), vehicle maintenance, and supply (TRAMCO), provider of infrastructure and maintenance (IFRASCO), and MUDFA (Multi Utilities Diversion Framework Agreement).

Courts also became part of the stakeholders who came in handy to settle conflicts that arose between the two main contractors. In several instances, the court ruled in favor of the development and continuation of the project. Contractors were at the heart of the witnessed delays and controversies.

Change in technology raised the cost of project implementation, which in turn resulted in conflicts in terms of the need for extra funding⁷. Conflicts between contractors led to court battles that took time to be ruled. However, contractors also played a crucial role in the actual implementation of the project.

Project planners were also to blame for the delays. The management of the project as a whole seems to have had serious challenges. To start with, the management did not do a proper cost analysis for the project.

A constant review of the project’s cost raised many questions regarding the validity of the methods that the group that was managing the project was using in arriving at figures, which kept on changing.

The inconsistencies served to raise doubts over the abilities of the project managers in handling the project while questioning their intentions in altering the figures. The planners had carried out an incorrect project analysis and estimations, which resulted in variations in cost and the need for supplement budgets to complete the project.

The scope of the project was also cumbersome to manage. Variations in the role and part that depended on different stakeholders also resulted in delays. Delays in one facet resulted in interruptions in others. The issue of close monitoring of the project was also not well managed.

The laid out structure for managing the project at different stages was faulty as it was evidenced in the swaying of support at different levels. Communication breakdown between stakeholders also led to conflicts and delays.

Project Management against Theory

The management of the project, especially in relation to many disputes that arose, seemed to be in line with some models of the game theory. A good example is the standoff that was observed between BBS and TIE. The two firms were staring at each other.

The first party to back off was expected to be the loser. The real disaster is imminent if none of the parties backs off. This scenario resembles the ‘chicken game’ in the game theory. Such a game assumes that both parties to the game move simultaneously as Osborne confirms⁸.

However, the actions that were adopted by the two sides were chronological whereby each side acted in rejoinder to the effect that was taken by the opponent side. If the solution to the disagreements ends up taking an unnecessary duration, the implication is the anticipated risks will be heightened.

This situation was evident between the Scottish government and the project managers. In the event of the adoption of the nuclear position that involves the cessation of the agreement, with the service provider choosing to present the issue to judges, there is a higher probability of each side being defeated.

However, thoughts by each party that its opponent might be crazy enough to take the dispute to such extent may persuade both of them to settle the scour. The project managers seem to have thought that the Edinburgh council would have caved in at some point in time.

They held on to its position in terms of seeking more funding for the project. This situation reveals the long standoff that existed between the two sides. It resulted in a court battle that helped to solve the circumstances that were becoming an increasingly expensive affair with each passing day.

At some point, speculations were rife that a compromise deal was in the offing that would have seen BBS eliminated from certain sections of the project. However, the project administrators would have been given the opportunity to finish the sections that they had been working on at that moment.

Lessons Learnt From Similar Projects and Their Links to the Tram Project

The United Kingdom has had numerous other tramway projects that offer important lessons when it comes to project management. All of them have had varying challenges that were solved in different ways. As such, Docherty and Shaw say that they can offer a great insight in terms of approaching such projects⁹.

A good example is the Nottingham Express Transit that is located in Nottingham, England. The project took 15 years to be completed. The project’s cost was determined in advance. Hence, issues of increased costs were rare.

The best bidders were chosen to carry out the project. This plan helped to ensure that the project went on smoothly from its initiation to its completion.

Another unique feature of the Nottingham tramway that contributed to its success was that it involved a public-private partnership. Such kind of partnership in public projects has always shown higher degree of success compared to projects that are run or handled entirely by the government.

The private sector has a sense of accountability since it bases its activities on adherence to strict business rules. It takes into account prudent use of resources and maximisation of benefits that arise from any endeavour that it is involved in.

The concept of profit maximisation that is advocated when it comes to private entities plays an immense role in ensuring the best possible use of the available resources by avoiding any unnecessary wastage.

Further, the private sector always looks for the best specialties when it comes to running its operations. It does not rely on political affiliations or ethnicity in hiring its personnel. This strategy helps to avoid the negative influence that politics may have in the successful implementation of public projects.

Involvement of the private sector into the Nottingham tramway project helped in availing more funds to the project as Transport Scotland reveals¹⁰.

This move had the effect of eliminating the need for borrowing large amounts of money for the project. Such huge funds have the effect of attracting large interest rates that serve to increase the overall costs of the project.

Successful projects such as the Nottingham Express Transit offer great lessons for the Edinburgh tramway project. One of the main lessons is the separation of politics from such projects.

This criterion helps in keeping away politicians who tend to use such projects as platforms to advance their political interests. As Rodger asserts, another lesson is on the importance of including the private sector in the design, funding, and implementation of such projects¹¹.

The private sector brings with it efficiency in terms of time management and prudent management of projects. This plan ensures not only timely completion of projects but also proper use of public funds to avoid unnecessary wastage of public resources.

Tramway projects such as Tramlink, Metrolink, Midland Metro, and Nottingham Express Transit among others all bear some similarity with Edinburgh project. They have a link in the sense that they were intended to connect various places across different cities.

The UK Tram is an organisation that represents the interests of all stakeholders and industry players in the tram industry. The projects were also intended to lessen traffic jams that were experienced in these cities while also providing a better alternative in efforts that were aimed at minimising the emission of greenhouse gases by cars.

Conclusion

The Edinburgh project was surrounded by lots of controversies in relation to costs, delays in completion, and political influence that slowed down the project while hurting taxpayers. It can borrow lessons from other similar projects. The project is located in Edinburgh in the United Kingdom.

It was meant to connect York place and Edinburgh to reduce traffic congestion by motorists. The project managers deviated from the project’s contract that recognised it as a fixed-cost contract by demanding additional funding. This cost implication was the cause of all other controversies that followed in the course of the project.

There are great lessons that Edinburgh project can learn from other similar projects that have had significant success. Nottingham Express Transit serves as a perfect example. Lessons from it can help to find ways of avoiding issues that haunted the Edinburgh tramway project.

Recommendations

There is a need for more public-private partnerships to be deployed when carrying out projects of this magnitude. Such projects involve heavy investments whose implementation has an immense direct impact on taxpayers.

Such partnerships will bring greater efficiency since the private sector is known for conducting its affairs with greater professionalism compared to the public sector. Elements such as expertise and extra funding that are provided by the private sector are bound to see better and more successful implementation of public projects.

Governments also need to hold contractors accountable in the implementation of projects as opposed to curving into the outrageous demands by contractors who do not fall within the postulations of the contracts.

Bibliography

Audit Scotland, ‘Edinburgh Trams Interim Report’, The Accounts Commission, 2011. Web

Boateng, P., Megaproject Case Study, Edinburgh Tram Network Project, Edinburgh Publishing Company, Scotland, UK, 2008.

Crowther, G. L., National Series of Waterway, Tramway and Railway Atlases, G.L. Crowther, Preston, 2013.

Dalton, A., ‘135 Changes, £16m Bill: Latest Trams Furore’, Scotsman, 2010. Web.

Docherty, I., & Shaw, J., Traffic Jam: Ten Years of ‘sustainable’ Transport in the UK, Policy Press, Bristol, UK, 2008.

Lowe, J. G., Edinburgh trams: a case study of a complex project, Association of Researchers in Construction Management, Leeds, UK, 2010.

McKie, R., ‘Edinburgh’s tram system opens – £375m over budget and three years late’, The Guardian UK, 2014. Web.

Osborne, M. J., & Rubenstein, A., A Course in Game Theory, MIT Press, Boston, 2005.

Rodger, R., The Transformation of Edinburgh: Land, Property and Trust in the Nineteenth Century, Cambridge University Press, Cambridge, 2004.

Transport Scotland, Scottish Transport Appraisal Guidance Version, The Scottish Government, Edinburgh, 2008.

Footnotes

P. Boateng, Megaproject Case Study, Edinburgh Tram Network Project, Edinburgh Publishing Company, Scotland, UK, 2008, p. 9.
J.G. Lowe, Edinburgh trams: a case study of a complex project, Association of Researchers in Construction Management, Leeds, UK, 2010, p. 1289.
G.L. Crowther, National Series of Waterway, Tramway and Railway Atlases, G.L. Crowther, Preston, 2013, p. 12.
R. McKie, ‘Edinburgh’s tram system opens – £375m over budget and three years late’, The Guardian UK, 2014.
Lowe, p. 1291.
Crowther, p. 33.
A. Dalton, ‘135 Changes, £16m Bill: Latest Trams Furore’, Scotsman, 2010.
M.J. Osborne & A. Rubenstein, A Course in Game Theory, MIT Press, Boston, 2005, p. 12.
I. Docherty & J. Shaw, Traffic Jam: Ten Years of ‘sustainable’ Transport in the UK, Policy Press, Bristol, UK, 2008, p. 56.
Transport Scotland, Scottish Transport Appraisal Guidance Version, The Scottish Government, Edinburgh, 2008, p. 11.
R. Rodger, The Transformation of Edinburgh: Land, Property and Trust in the Nineteenth Century, Cambridge University Press, Cambridge, 2004, p. 33.

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