More Tram Funding To Be Decided

The future funding of Edinburgh's troubled tram project will be decided today when councillors meet to consider a report revealing the cost of partially completing the project is over £830 million.

They will be asked to approve the funding to complete two-thirds of the tramline with a price tag more than 50% higher than the original budget - with no guarantees about the final maximum cost.

The original budget for taking the line from Edinburgh airport to Newhaven was £545 million.

The works have been dogged by delays and a dispute between contractors Bilfinger Berger and tram company Tie which has pushed the project overbudget.

Dave Anderson, director of city development at Edinburgh City Council, has now recommended borrowing a further £231 million to take the tramline to York Place, in the city centre, and paying it back over 30 years.

This will take the cumulative revenue charge with interest to £291 million.

Labour, who spearheaded the project while in power in the council and at Holyrood, has tabled an amendment calling for the tram to go only as far as Haymarket.

This would require less initial borrowing but council officials have warned that it would result in the trams running at a loss.

Labour group leader Andrew Burns said, "The capital cost for St Andrew Square is now far, far beyond the available monies.

In addition there is little, or no, prospect of any additional capital grant allocation from central Government.''

He added, "If the monies needed to get the project to St Andrew Square are borrowed, that would leave the council with over £1.5 million worth of debt and over 11% of our annual revenue budget going on interest payments.

Outright cancellation costs for the whole project are also completely prohibitive, with severe implications of some #180 million being required from the revenue budget in year one alone - that's an initial cost which would decimate essential public services in the city.

Delaying a decision is going to help no-one, so we will back the Haymarket option - within strict limitations - as we did at the council meeting in June.''

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