Edinburgh tram project gets reprieve

2 Sep 11
Councillors in Edinburgh have voted to reverse their decision to cut the length of the Scottish capital’s new tram link after the Scottish government said it would not fund the truncated route.

By Richard Johnstone | 2 September 2011

Councillors in Edinburgh have voted to reverse their decision to stop the Scottish capital’s new tram link short of the city centre, after the Scottish government said it would not fund the truncated route.

Councillors last week voted to complete the beleaguered project, which has been beset by delays and is more than £100m over budget, from Edinburgh Airport to Haymarket in the west of the city, just over 60% of the original length of the route.

The route was originally to go to Newhaven in the north of the city for a maximum cost of £545m, but disputes between the council and the construction consortium building the line have driven up the cost.

However, the decision to stop the line at Haymarket was described by the Scottish government as ‘damaging’. It said it would cease funding the project. The government agreed in 2007 to pay £500m towards the cost, but warned it would withhold the outstanding £72m.

The line will now reach St Andrew Square in the city centre at a cost of £742m when the Scottish National Party group of councillors, who abstained in the first vote, vote in favour of this option. The council will need to borrow around £231m to complete the line this far, with no extra central government money forthcoming.

The decision had to made by the end of today, or the contract to construct the line would be terminated, at a potential cost to the council of £161m.

However, this deadline has already been extended by a day, and a source close to the construction consortium, made up of civil engineering firm Bilfinger Berger, signaling provider Siemens and tram builder CAF, told Public Finance that they still wanted to work on the project. ‘If it is only to Haymarket, so be it,’ he added.

The Scottish government has confirmed that it will hold a public inquiry into the project, which was initially scheduled to be completed this year, once there is ‘greater clarity’ about its direction.

A spokesman for First Minister Alex Salmond, whose government initially tried to cancel the scheme, said: ‘We will be delighted to have a public inquiry into the trams fiasco, and will do so once there is greater clarity about the direction of the project so that its full circumstances can be examined.’

 

 

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