Day: November 15, 2015

‘We are satisfied there will be no impact on Council budgets in the short or long term.’ – Council leader Cllr Andrew Burns

Councillors will discuss proposals to extend the Edinburgh tram line to Newhaven at next Thursday’s full council meeting.

If recommendations are agreed, a nine-month period of project development will commence, including the beginning of procurement processes for external support and site investigation. However it is unsure at this stage whether the SNP group on the city council – Labour’s partners in the Capital Coalition – will support the proposal to extend the line.

Once the first stage is complete, a report will be brought back to Council recommending the way forward. If Councillors agree to continue with the extension a second stage, scheduled to take 21 months and costing approximately £8.3m, will include further site investigation and working with the Council’s advisors in carrying out procurement and enabling works.

While the Council is yet to identify specific resources to fund the borrowing costs required for the project, the business case concludes that these can be funded from wider Public Transport revenues with no impact on Council revenue budgets in the short, medium and long term.

Council Leader, Councillor Andrew Burns, said: “The updated Outline Business Case provides further justification for bringing the tram to Leith, clearly demonstrating the social and economic impact the extension could have on this key area of the city.

“This first stage of project development for the extension will allow us to take another step towards achieving this. A significant period of work will ensure robust governance, allowing financial evaluation and risk analysis to be carried out.

“By obtaining funding for these initial stages from the city’s Public Transport revenues, we are satisfied there will be no impact on Council budgets in the short or long term.”

In June, Councillors considered the emerging conclusions of the draft Outline Business Case, which proposed a formal market consultation and further, detailed analysis of project finances before any decision was made.

A report, to be heard by Council on Thursday, 19 November, details the findings of the Outline Business Case for the extension to Leith.

It is recommended that Councillors approve, in principle, extending the tram to Newhaven over alternative options to end the line at Ocean Terminal, the foot of Leith Walk or MacDonald Road.

The Outline Business Case, based on a formal market consultation process, audit of the financial model and identification of funding options, concludes that extending the existing tram line to Newhaven will boost the city’s economy while delivering a range of wider benefits in relation to employment, population growth and social inclusion.

Spur lines to Leith and Granton’s Waterfront were an integral element of the original masterplan for Edinburgh’s tram network back in 2003, but these were dropped as the project ran into well-documented financial difficulties.

Back then the then Labour-led Scottish Executive allocated £375m for proposed tram routes linking the city centre to both Edinburgh Airport and Leith. Original projections indicated that trams would be running on city streets by 2009.

The project was years late and millions over-budget: the project cost taxpayers £776 million and trams did not run until 31 May last year – and then only on a single line, not a network.

An inquiry into what went wrong, to be led by Lord Hardie, was announced by then-First Minister Alex Salmond in June last year. 

The Inquiry is attempting to find out why the Edinburgh Trams project – with a final bill of £776m plus over £200m in interest on a 30-year loan taken out by the council to cover the funding shortfall  – was delayed and went so badly over-budget. The Inquiry also aims to establish why, through reductions in scope, the project delivered significantly less than projected.

The official terms of reference for the Inquiry are to:

• Inquire into the delivery of the Edinburgh Trams project (‘the project’), from proposals for the project emerging to its completion, including the procurement and contract preparation, its governance, project management and delivery structures, and oversight of the relevant contracts, in order to establish why the project incurred delays, cost considerably more than originally budgeted for and delivered significantly less than was projected through reductions in scope.
• Examine the consequences of the failure to deliver the project in the time, within the budget and to the extent projected.
• Review the circumstances surrounding the project as necessary, in order to report to the Scottish Ministers making recommendations as to how major tram and light rail infrastructure projects of a similar nature might avoid such failures in future.

The inquiry, which was converted to a statutory inquiry almost exactly one year ago, is ongoing: the process has been broken down into ten separate stages and the Edinburgh Tram Inquiry team is currently working on stages 4 and 7. This includes gathering material, retrieving and reviewing documents; and reviewing written evidence which will be considered by Lord Hardie to decide what further evidence is required at oral hearings.

No date has yet been set for publication of the report of the inquiry’s findings – these will be made available ‘at the earliest opportunity’.

When Alex Salmond announced the public inquiry last year he promised MSPs it would be a “swift and thorough” inquiry.

Swift? Perhaps not, but anyone who has any knowledge of the lengthy and complex nature of the Edinburgh trams story knows that speed has never been the driving factor. But thorough? The Scottish taxpayer, the businesses and citizens of Edinburgh surely deserve nothing less.