How tram firms ‘were rewarded for failure’

BOSSES on the Edinburgh trams project awarded bonuses to poorly performing companies in an effort to bring their work up to scratch, it was claimed yesterday.

Donald McGougan, former director of finance at City of Edinburgh Council, made the allegation at the inquiry into the £1billion scheme, which arrived three years behind schedule in 2014.

In a statement, he said that in 2008 Systems Design Services (SDS) – made up of two firms working on the tram designs – was offered a bonus of £1million.

Referring to a 2008 document, his statement read: ‘A “bonus pot of £1,000,000” to incentivise the production of design is discussed. Although the bonus was a reward for poor performance, we were where we were.

‘It was important that we attempted to mitigate the risk of that non-performance going forward. If we hadn’t tried to do that then it could have had a further consequence in terms of the construction programme.

‘The bonus pot was to help mitigate against further delays by SDS which could delay completion of the project.’

On Tuesday, the inquiry, before Lord Hardie, was told that Parsons Brinckerhoff, one of the SDS firms, took ‘a daft laddie approach’.

Speaking in evidence which continued yesterday, former council director of city development Andrew Holmes said: ‘Parsons Brinckerhoff’s first pass at design of some points, I can only describe as a daft laddie approach.

‘For example, at the foot of Leith Walk, giving hordes of pedestrians something like a metre and a half of pavement to work on. We sorted it fairly quickly once we got everybody round the table, but it wasn’t a good start from Parsons Brinckerhoff.’

The Dictionary of the Scots Language defines a daft laddie as: ‘A person who pretends to be stupid, naïve or ignorant when in fact well aware of a situation.’

Mr Holmes also revealed how the project became a big payday for council staff.

He said those transferred to the council-owned firm running construction – Transport Initiatives Edinburgh (TIE) – received ‘considerably elevated salaries’.

And when it was ‘felt that they had additional responsibilities’, some staff who remained at city chambers ‘may have been given a temporary additional allowance’.

Mr Holmes also told the inquiry that he was not privy to discussions around bonuses at TIE and was forced to make assumptions that public funds were being awarded properly.

Inquiry counsel Euan Mackenzie, QC, said: ‘In short, I think the suggestion is that if the council did not know and oversee the terms of TIE’s bonus scheme and individual payments made, how was the council in a position to know whether public money was being paid in bonuses that was achieving best value?’

Previously the inquiry was told how one TIE official received a £40,000 bonus for seven months’ work.

The inquiry continues.