Edinburgh transport chief says new tram line work should not wait for inquiry

Project: The tram extension will cost an estimated £100 million.

The local authority has revealed its final business case for extending the tram line to Newhaven, which will be put to councillors on its transport and environment committee next week. The cost of the project has soared by 25 per cent to £207m, in part down to increased construction costs following the problems with Carillion.

If approved by all councillors next month, the project will be funded by borrowing and an agreed £20m dividend from Lothian Buses. The future tram fares will pay off the debt, meaning no funding is taken away from core council services.

Costs have increased from the outline business case, published in 2017, from £165m to £207m – with the revised budget including £11m of ‘optimism bias’ as an added layer of insurance. Another £50m will also be allocated in the council’s reserves for any issues encountered during the project – and the council’s risk experts believe there is a 39 per cent chance of needing to dip into the extra pot. A public inquiry under former judge Lord Hardie into the first phase of the tram project is yet to report its findings after costing £776m for a shortened route – more than double the original budget.

The council insists lessons have been learned and a one-dig approach will see a contractor opening up the route and removing any utilities before an infrastructure and systems contractor will complete the work.

Cllr Macinnes said evidence revealed in the inquiry is being taken on board, but that the expected population growth in the Capital meant there was an urgency to press ahead with the extension.

She said: “The problem that we have had all along is the two sets of time-scales are not running very well.

“Since we don’t have a definitive publication date for his findings, how do we then, against all that population growth and all the stress and strain that this will help to deal with, how could we justify hanging on and waiting?”

Cllr Macinnes added: “It was imperative for us to look at what was emerging form the Hardie Inquiry. We have obviously been monitoring very closely the evidence that has been given and it has driven part of the final business case in certain areas. “It’s not been a question of us ignoring what’s been happening in that inquiry, far from it. I think the degree of caution and care that has gone into the development of this final business case reflects out very great awareness of the Hardie Inquiry and its content.”

Conservative Cllr Andrew Johnson labelled the approach “stepping into the unknown without knowing the mistakes from the past”. He said: “I’m very concerned that the business case costs have dramatically increased in a very short period of time. What if Lord Hardie comes out and says that given the experience of tram line one, everything should be fed up to Transport Scotland. What would they do then if contracts have been signed?”