AN extension of Edinburgh’s tram line to Newhaven is now likely to be postponed indefinitely after the case for it fell apart when SNP councillors learned of its true cost.
The National can reveal that Edinburgh Council would almost certainly have to borrow almost all of the £144 million required for the extension, and the cost of the line would therefore be well in excess of £200 million.
Indeed one council source said that if interest rates returned to normal, the cost of the extension would be “nearly £300 million”.
When that information was conveyed to the council’s SNP group, the already sceptical members – the SNP had opposed the trams project at the outset – decided to vote against the extension when it comes before the full council next week. The project is now likely to be postponed indefinitely.
One SNP source said: “We have taken a principled stand on this. How can we possibly justify borrowing all that money and paying such sums in interest when we have a budget crisis facing us.
“The business case just has not been made, and we should forget the extension.”
The council is trying to shed 2,000 jobs as it bids to meet a shortfall of £141 million.
There had been fears that the SNP’s stance would fracture the Capital Coalition with the Labour Group which has run the council since the last elections, but The National understands that though Labour are in favour of the extension, they will seek a postponement of the project.
The Conservative Group have already stated their total opposition to the extension but the Scottish Greens and Liberal Democrats are thought to be in favour.
The final report in favour of the business case for the extension will be published later this week, and is expected to say that the council will need to borrow most of the £144 million needed to build the extension to Newhaven via the foot of Leith Walk and the Ocean Terminal.
Shorter extensions to these latter two places are not considered viable overall, and another plan to extend the tramline a few hundred yards to McDonald Road was rejected outright at an early stage.
The present 8.7mile (14km) route from Edinburgh airport to York Place has 15 stops along the way. It was the only one of three routes to survive and cost £776m, plus more than £200m in interest on a 30-year loan taken out by the council to cover the funding shortfall.
The overrun on the costs and construction time of the project have prompted a public inquiry under Lord Hardie which is not expected to report for two years.
Some councillors have said no extension should be considered until the inquiry has reported.
Conservative councillor Nick Cook, a long-time opponent, said last night: “We have already had two votes on the extension, and were the only group that voted against the extension.
“We have not seen any information about a material change of circumstances.
“We are also very sceptical about the costings and affordability, and are concerned about the ability of the council to handle this project.
“The Hardie inquiry has barely begun, so how can we even consider pressing ahead without knowing the reasons why it went wrong in the first place?”
A major problem for the council if the project is postponed indefinitely is that its legal powers to acquire land between Granton and Newhaven will expire next May.
The business plan points out that much of the infrastructure for the extension is already in place including many plots of land acquired by the council.
In their first year of operation, the trams exceeded expected passenger numbers, and the business plan forecasts 8.7 million passengers a year by 2027 if the extension goes ahead.
Labour MSP for Edinburgh North and Leith, Malcolm Chisholm, said the extension was "necessary".
He said: The council does have massive financial difficulties at the moment and it’s not for me to say what decisions it should make immediately. But in the longer term, it is financially necessary and will happen. That’s the only way to increase the customer base.”
A council spokesperson said that there would be no official comment made before the council meeting.
The Scottish Government and Transport Scotland confirmed that their position has not changed – there will be no further Government cash for the trams, to which £500m had already been paid.
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