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Final bill rises by 25%

Cost of Edinburgh tram extension rises by £42 million

Tram in Constitution Street

Trams would head along Constitution Street, above, connecting Newhaven with the city centre


The cost of extending the Edinburgh tram service to Newhaven has risen by 25%, raising concerns that the final bill will once again spiral out of control.

Council officials have admitted the cost of taking the line from York Place and through Leith has risen from £165 million to £207m even before a final decision has been taken to go ahead.

City councillors were today examining the confidential final business case before the full council decides on 14 March whether or not to approve the extension.

Work on the 2.8 mile extension is scheduled for completion in 2022 with the first trams operating in the first quarter of 2023. In the first year of operation, the council predicts 16 million passengers will use the line. The York Place stop would be moved to the new interchange at Picardy Place.

The council insists it can be built within a budget of £196m, but councillors will be asked to approve an overall budget of £207.3m to include a recommended 6% level of “optimism bias” to take account of an increased risk buffer for any problems encountered.

new tram route

However, residents and business owners will be concerned that the current programme already has echoes of the debacle around the original line which was shortened, opened three years late in 2014 and was massively over budget. The cost of the inquiry into the handling of the tram project is expected to rise above £10m.

Council leader Cllr Adam McVey said: “Edinburgh has a fantastic public transport network but we need to extend the tram to build on our first-class, fully-integrated transport system.

“The final business case before us now is the result of a huge amount of work by the project team to produce a strong business case for taking trams to Newhaven which – crucially – does not divert funding from other council services.”

He added: “Having developed the case further and gone through the tender process, we now have much greater certainty of the total project cost – following industry guidance, learning the lessons from the previous project and taking a thorough, diligent and prudent approach to risk management. We will work to make sure the timelines and costs in the final business case are met.

“All councillors will be taking the opportunity to examine in detail the final business case and associated documents in detail so that we can collectively make as informed a decision as possible come 14 March.

“If the council moves ahead with this project, we’ll be working hard to make sure we deliver this project on time, on budget.”

The project will be funded through borrowing paid back by future tram fare revenues, along with a special £20m dividend from Lothian Buses.

The council says it has leaned lessons from the first phase in the way the second phase would be built.

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