Edinburgh tram extension: why the costs could spiral even higher

The trams to Newhaven projects cost has increased as the timescale has slipped. Picture Ian Rutherford

Today is T-Day, when the final plunge is taken which commits the city council to the three-mile tram completion project to Newhaven which will cost anything between £195 million and £257m at current estimates.

To remind readers, the Airport-York Place line cost £776m, plus an additional £44m for tram-related expenditure and interest costs of £182m over the next 30 years. In other words, no change out of a billion. Included in that bill is the cost of the rolling stock and hardware needed for the Newhaven completion and, presumably, the cost of the utility diversion work already carried out on Leith Walk.

A council report in 2015 estimated the likely cost of the Newhaven line was £144.7m with a £15m contingency and by August 2017 that had increased to £165m, although briefings indicated that investigations had been so thorough that the final bill could actually come in at anything up to £30m less.

None of that includes the cost of around £8m for the Hardie Inquiry, the findings of which aren’t yet known

Now the most optimistic, trouble-free, inflation-proof, never-mind-Hardie, everything’s-coming-up-roses, Mr Golden Sun estimate is £195m, but even transport convener Lesley Macinnes has set her stall out on the cost not rising above £207m. Risk assessment experts have, however, given the project a 5-2 chance of it costing anything up to £257m.

There are already pointers in the Final Business Case where some of those extra costs might come from, such as a “cash-flow challenge” of £14.8m and potential changes to the road lay-out which will be funded from the Place Department’s capital budget “in parallel” to the direct cost of the line.

As the cost has increased, so too has the timescale slipped from 2021, to early 2022, and now to Spring 2023 and all these changes to budget and schedule have happened only through passage of time and changing external circumstances, not anything happening on the ground.

The reality is the project is no longer about the money and although the council administration has tried very hard to make the public believe the whole thing is self-financing and all the borrowing will be paid back from new fares revenue, the truth is that because the original tram project did not bankrupt the city there is a belief that somehow the debt will just be managed away.

The fundamental business case rationale is the tram is crucial to linking key economic development areas, in particular housing along the Newhaven-Granton Waterfront, but that is unquantifiable. It’s fair to assume, therefore, that money really isn’t any object but it’s just not politically very clever to say so.

The 2015 outline business case made a clear link to housing development in Leith and Newhaven, and indeed a recent briefing gave a firm steer that the developers behind the Western Harbour housing project were proceeding only on the basis that the tram would happen. I’m not so sure, but that’s what we were told.

So what about the Granton Waterfront, a site which the council mostly owns and on which it hopes around 4000 homes will be built? On the basis of the case for the Newhaven line, there is no conceivable obstacle to the Granton spur from Roseburn because the housing priority overrides the cost implications at every turn. Senior transport figures have already been laying the groundwork for the PR campaign to get the Granton Spur moving on the basis that as most of the route is an old railway line the disruption and cost will be far less than Newhaven. £100m seems a nice round figure.

Throw in the seemingly unfalsifiable arguments about climate change and the associated demand not just to get people out of cars but out of buses too and the conclusion must be that it really doesn’t matter how much the Newhaven completion, the Granton Spur or any other non-road transport project costs. Or what anyone else thinks.

Double yellows just the ticket

An interesting parking initiative at the industrial estate in Seafield is the painting of double yellow lines on a road outside one of the units without permission which might deter some drivers but which actually has no legal basis.

Local workers in the know have been ignoring them and the regular parking warden in the area has been doing the same, but a new patrolman reckoned yellow lines are yellow lines and decided to start handing out tickets. Queue a rush to get the cars moved, but anyone ticketed on that stretch at Craigentinny Avenue North should make sure they appeal.

The offending lines will be removed next week.

Flooded with disbelief over obvious choice

Not for the first time in a planning application debate, I listened with incredulity to some of the arguments in favour of blocking badly needed facilities. This time it was the excellent plans to replace St Crispin’s special school in Blackford on the site of the now demolished Burdiehouse Primary next to Burdiehouse Burn.

The Scottish Environmental Protection Agency was unhappy because the site had a one-in-a-thousand years’ chance of a flood, yet with water storage included in the scheme, the new building actually posed less of a flood risk than the old school but more than if the site was left to nature.

Councillors had to balance the benefit of a modern facility to support the needs of 72 children with complex learning difficulties and a 0.01 per cent chance of water rising by seven millimetres downstream. Thankfully, a majority chose the former.

Edinburgh tram extension: why the costs could spiral even higher – John McLellan