The Scottish Government Administrative Performance

Introduction

As the primary stakeholder, the Scottish government played a crucial role in financing the project. The government was also mandated, via its devolved body, the City of Edinburgh Council (CEC), to supervise and monitor the implementation of the project. The CEC sought to better execute this mandate by dividing the contract into several distinct sub-contracts, which were let to various companies and contractors.

The biggest shortcoming in the project was arguably the costing estimation. With the project’s cost determined accurately well in advance, the resultant challenges may have been mitigated or avoided completely as the occurrence of increased costs would have been rare and/or cushioned for. The best contract bidders would have been chosen, and the implemented plan ensuring that the project was executed without a hitch, from its conception to completion.

This framework of sub-contracts consisted of the System Design Services (SDS), Tram Car Construction, Deliverance and Maintenance (TRAMCO), Provision of infrastructure construction and maintenance (IFRASCO), and Multi-Utilities Diversion Framework Agreement (MUDFA). The Council would be the revenue allocation and review committee to ensure that the entire project was running under the pre-determined budgetary allocations.

Unprecedented changes led to the increase in the cost of project implementation, and the emergence of conflict in the need for additional funding. Conflict resolution techniques were then implemented, through which the contractors halted work on the project (Lowe, 2010). The mediation broke down, resulting to a litigative process in the courts. However, it would also be fair to credit the contractors with the actual implementation of the project.

What the Project Achieved Versus What it had Sought to Achieve

The project was aimed at solving transport problems within the region, promote sustainability, and improve accessibility to various places within the local region. The tramline comprises a double track that connects the city center, York Place, to Edinburgh Airport, as well as linking areas of development in North and West Edinburgh. The tram would cover a stretch of roughly 14 kilometres, with 15 passenger-offloading and loading sections along the route (Lowe, 2010; The City of Edinburgh Council, 2014).

Deviations from the Original Project Plan

All deviations from the original project plan in the Edinburgh Tram Project were innefectual, which is why, in hindsight review, the project is often considered unsuccessful. The initial plan had two proposed phases; named Phase 1a and Phase 1b. The former, Phase 1a would comprise an 18.5km stretch from Newhaven, navigating through Princes Street to Edinburgh Airport (Lowe, 2010). On the other hand, Phase 1b was designed to be a 5.6km tram line running from Haymarket, through Crewe Toll, to Granton Square. In 2009, Phase 1b was cancelled over the country’s financial crisis at the time. Further, budgetary consideration led to the council voting to truncate the tramline at Haymarket Station and York Place in 2010 and 2011. Consequently, the final project is much shorter and twice the cost of the initial planned endeavor. This may be attributed to currency inflation, overly conservative/optimistic costing, and stakeholder manipulation.

During conceptualization of the project, the Edinburgh tram project had been costed at an estimated price of £375 million in 2003. However, this amount was later revised as the project was commissioned at £500 million, with the County of Edinburgh Council pledging an additional £45 million. Later revisions and disbandment of the TIE would push the final cost of the tramline to £770 million despite an entire phase being scrapped, and several sections truncated. This primarily explains why the project is generally considered an unsuccessful endeavor as well.

Attributes for Project Management Practices

The project offers up very important lessons, especially regarding project management. It was plagued by various challenges, and despite whether they were solved satisfactorily or not, still present a valuable lesson for any future implemented projects. The United Kingdom has also had many comparable projects executed with various levels of success, and despite not looking explicitly at them, offer contextual assurance that, given the right project management practices, the successful implementation of the project was possible.

Another missed opportunity, despite the failed implementation, would have been the involvement of a public-private partnership. Given the undoubtedly political nature of such a government undertaking, a public-private partnership would have shown a higher degree of success, compared to the Edinburgh Tram Project which was handled by the government. It is noted, however, that the CEC sought to achieve this by using TIE, but the latter was a subsidiary of CEC, and therefore working under the same constraints and public perception as its parent body.

The private sector has a generally higher sense of accountability owing to a strict adherence to business and government guidelines. Furthermore, with the primary focus on maximizing margins, the private sector takes into careful consideration, the use of resources sparingly with the maximization of benefits in mind in any endeavor undertaken. The concept of profit maximization is key in ensuring the efficient use of available resources, and avoidance of wastage.

Finally, the private sector is rarely influenced by political affiliations or ethnicity in selection of personnel. As a result, the sector is often filled with individuals and specialists selected based solely on merit, which would be advantageous if implemented in public projects. The involvement of a true private sector within the management of the Edinburgh Tram Project would have helped avail more resources to the project, that would have been efficiently implemented. This would have further negated the need to borrow large sums for the project, further reducing the overall cost of the project. Finally, the involvement of the private sector would have greatly reduced the politics, and hence the complexity of the project as argued by Lowe (2010).

Administrative Performance

Other stakeholders central to the project delays are the project planners, with the entire project management eliciting serious concerns over their competence. For instance, the management failed to do a proper costing estimation for the project, resulting to numerous follow-up revisions to the initial budget. The revisions called into question the validity of the costing technique implemented by the management to arrive at the figures, which kept changing. These inconsistencies cast suspicion over the competence of the project managers and the rationale behind the changing figures. This was a serious oversight in the hands of the project planning team, whose overly conservative estimate led to an incorrect project analysis, necessitating the need to supplement budget allocations to complete the project.

As the project’s management is characterized by its disputes and controversies, Lowe (2010) likens the scenario to classic Game theory. This is evident in the drawn-out impasse between BBS and TIE, whereby the two firms were staring each other down, waiting for the other to back down, in a “Chicken Game” (Lowe, 2010).

In this standoff, the first party to back down loses. However, if none of the two parties concedes, there would be imminent and disastrous results. Such a game of Chicken in game theory assumes that each party in the conflict seeks to move simultaneously, but not give the opponent leverage (Lowe, 2010). However, in this case, the actions adopted by the two sides, BBS and TIE, were chronological, whereby either side acted in response to the action taken by the other. Eventually, if the resolution to the conflict takes too long, the implication would be that the perceived risks are exponentially increased.

In the event that the owner of the contract seeks to adopt the nuclear option, which in this case would have been to cease the contract and cancel the project, the supplier would seek redress in a court of law, whereby there is an increased probability of both sides being defeated. In such a standoff, the thought by each party that their opponent may be willing to go to such an extreme may persuade them to settle the conflict.

However, in this case, BBS seemed to think that TIE would cave, in which case they held onto their position of requesting more funding for the project. This was also amid speculation that the CEC would eliminate the BBS from certain sections of the project, seeking to reallocate these sections to Siemens but allowing the consortium to complete the sections currently underway. Eventually, the matter was taken to court, and the judge helped address the circumstances which were becoming very costly, in terms of time and finances.

Organizational Structure

The Edinburgh Tram Project was facilitated by a litany of stakeholders, involved to help achieve the set deliverables. As a result of their close involvement, their participation in the project had varying impact, at different levels of the project’s implementation as well. These stakeholders can be broadly identified as including the Scottish National Party’s Government, the assigned contractors, politicians, the Courts, and the Scottish population as a whole (Lowe, 2010).

Despite the TIE having a mediation and dispute-resolution system, the breakdown of this system during the events that followed made the Courts a part of the stakeholders; coming in to resolve the conflicts that arose between the two primary players, TIE and BBS. Contractors were the primary reason behind the controversies and the delays in the project from the onset.

The project scope was also quite cumbersome for management. This resulted in variations in the roles allocated to stakeholders which resulted in implementation delays. Given that the project was to be carried out sequentially, an interruption in one area affected others as well. The adopted management structure was evidenced to be faulty, leading to the withdrawal of support at different levels of implementation. Communication breakdown was also evident, leading to delays and conflict between stakeholders.

Team Composition

Given the adopted model, whereby the primary contract was subdivided into several subsections allocated to different providers, the final task had numerous contractors involved. The primary stakeholders in the Edinburgh Tram Project are as follows:

1. The City of Edinburgh Council (CEC). This was the owner of the Edinburgh Tram Project.
2. Transport Initiatives Edinburgh (TIE). This was a primary company, and project manager. It was a subsidiary of CEC that was registered primarily to protect the council from any liabilities arising the project.
3. Transdev. This was initially the Tram Operator, a role that was later rescinded and awarded to Edinburgh Trams Limited instead.
4. Bilfinger Berger, Siemens and Construcciones y Auxiliar de Ferrocarriles (BBS). An engineering consortium that was hired as the primary infrastructure contractor.
5. Alfred McAlpine Infrastructure Services. This firm was issued the Utility Diversion (MUDFA) contract. The company was brought on in October 2006, and completed within 3 years, November 2009.
6. Construcciones y Auxiliar de Ferrocarriles SA (CAF), despite being part of the BBS, was also mandated the construction of the Trams and ensure their delivery in time for the project testing.
7. Parsons Brinckerhoff was responsible for the Systems Design Service (SDS), responsible for the installation of overhead power lines and electronic systems, under the oversight and conjunction with BBS.

Given the number of firms collaborating and simultaneously working on the project, the model hedged on ensuring that each was content with their contractual requirements. Each specialist should have delivered within their area of expertise for the model to have been successful. Unfortunately, this was not the case, as BBS, which was the consortium addressing the Infraco Contract, was discontent at several junctures in the work. This may have been avoided or mitigated by mandating a primary supplier with the entire Edinburgh Tram Project. With the costs and implementation having no further input from the project administrators other than to the extent required to reasonably facilitate the project.

Conclusion and Recommendations

The Edinburgh Tram Project was meant, primarily to connect York Place and Edinburgh, greatly reducing traffic congestion and improving environmental outlook in the process. However, the project was marred by controversy and delays which greatly soured the overall significance of the undertaking.

The primary contractors deviated from the project model’s fixed-cost contract and demanded additional funding; the cost implication of which led to controversy throughout the project. However, this gives the opportunity for great lessons to be learnt for the implementation of any future comparable projects.

There is the need for more public-private collaborations in the implementation of projects of this magnitude, which would be highly politicized. This implementation further has a considerable impact on the taxpayer, calling the requirement for accountability, which is an inherent advantage of the private sector over government-run establishments.

Governments, and project managers need to hold contractors responsible for project implementation, especially when any dispute arises from a breach in contractual obligation. The requirements of the contract ought to be communicated from the project’s initialization, with the contractor selected based upon their merit, and assurance to abide by the terms outlined by the contract.

References

Lowe, J. G. (2010). Edinburgh trams: a case study of a complex project. In Proceedings 26th Association of Researchers in Construction Management, (ARCOM) Conference, Leeds, UK (pp. 1289-1298).