Forget council cuts … here comes your tram extension

The full Final Business Case (FBC) for taking trams to Newhaven was published yesterday – the day after city councillors voted to make cuts of £33 million to council services and shed up to 200 jobs. The £200 million tram line extention has the full backing of the city’s ruling SNP – Labour ‘Capital Coalition’, so it’s almost certain that the controversial project will get the green light next month.

A report accompanying the FBC will be presented by the Trams to Newhaven project team at the Transport and Environment Committee’s next meeting on Thursday 28 February.

The FBC sets out the ‘robust’ strategic, economic, financial, commercial and management case for taking trams to Newhaven and outlines the project cost and timescales for councillors to base their final decision on when it goes to Council on 14 March.

Elected members have already been examining the FBC and supporting documents in a specially set up data room in the City Chambers, where members of the project team have also been on hand to respond to questions.

The FBC has been drafted following best practice for major capital projects from both HM Treasury (Green Book) and Scottish Government (STAG).

Having gone through a thorough tendering process, the FBC outlines that trams to Newhaven can be delivered within a budget of £196m, which includes a significant additional risk allocation on top of construction costs.

Costs have risen since the Outline Business Case (approved in September 2017) partly in response to changes to the design made after an in-depth consultation process with the local community and interest groups, as well as changes in the market to the way major infrastructure projects are priced following the collapse of Carillion.

The £196m also includes around £2.4m in funding to support local businesses through the construction process.

Even when the recommended percentage of ‘optimism bias*’ is added, in line with government guidance, which would take the project total to £207.3m, the project remains affordable and self-financing and would not divert funds from other Council services.

The project would be funded through future tram fare revenues, along with a special dividend from Lothian Buses.

Almost 16 million passengers are forecast to use the completed line to Newhaven in its first year of operation – nearly double the patronage projected for the existing Airport to York Place line in the same year.

The cost reflects the outcome of a comprehensive procurement exercise and the inclusion of a six-month ‘Early Contractor Involvement’ (ECI) period to allow the project team and the appointed contractor to refine the construction programme and approach.

#Edinburgh's transport system "must evolve to cater to a rapidly growing population" – the Final Business Case for #TramsToNewhaven is going to the Transport & Environment Committee on Thursday https://t.co/4Gnfgdq5Qk pic.twitter.com/ZSF6DdkcM0

— The City of Edinburgh Council (@Edinburgh_CC) February 25, 2019

Transport Convener Councillor Lesley Macinnes said: “This is the next step in the decision-making process for this major project, giving the Transport and Environment Committee an opportunity to discuss and examine the Final Business Case ahead of Full Council’s final decision on 14 March.

“A crucial element of the FBC is that the project remains affordable without impacting on other Council services – something worth stressing given the entirely separate budget-setting process we have just concluded [on 21 Feb].

“As custodians of this great and growing capital, Edinburgh’s elected members have a responsibility to make sure we plan properly for the city’s needs in the coming years and decades. Transport infrastructure is essential to this – indeed, public transport can be an enabler for sustainable development, allowing large numbers of people to get into and through the city centre for work, travel or leisure as well as opening up development and employment opportunities.

“We are Scotland’s fastest growing city and although we already enjoy award-winning bus and tram services, we must work hard to evolve our whole public transport infrastructure and indeed public spaces. Trams are just part of the overall vision of an Edinburgh that truly has people at its heart – a more active, healthy and connected city with active travel and public transport at the forefront.”

Vice Transport Convener Councillor Karen Doran said: “It’s been a hugely complex process getting us to this stage and the Trams to Newhaven project team are to be congratulated for all their hard work and expertise in producing a fully costed, fully scoped out business case for councillors to base their ultimate decision on next month.

“They’ve carried out months and months of extensive consultation on the designs and plans, updating and amending them in response to feedback so that they meet the community’s needs.

“This report goes public on the same day as the next stage in our ambitious City Centre Transformation project. Both are aimed at responding to Edinburgh’s needs now and for generations to come. We have to respond to the pressures our growing city faces: managing congestion and improving air quality, making it easier to walk and cycle and creating an inclusive city for people of all ages and abilities.”

“If councillors agree to proceed with this on 14 March, trams to Newhaven will deliver real benefits to communities in Leith, Newhaven and right across Edinburgh.”

It’s likely that the £200 million tram line extension will get the go ahead despite the fact that an inquiry into Edinburgh Trams is yet to report it’s findings into what went wrong first time round.

The Inquiry aims to establish why the Edinburgh Trams project incurred lengthy delays, cost vastly more than originally budgeted and through reductions in scope delivered significantly less than projected – a single line, not the promised network (which, ironically, included the Leith/Newhaven line).

The official terms of reference for the Inquiry are to:

• Inquire into the delivery of the Edinburgh Trams 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.

Edinburgh Tram Inquiry has had NO discussions with the City of Edinburgh Council about the tram extension, or any eventuality in relation to it, as the tram extension does not fall within the Inquiry’s Terms of Reference.