A row has broken out over Edinburgh City Council’s tram extension project, after an opposition council leader warned “we’re bust now if we cancel, or we might be really bust in three or four years time if we carry on”.
A new financial report shows that the cost of cancelling the tram extension to Newhaven could be less than the cost of completion.
The report lists four possible scenarios, each dealing with varying levels of demand for public transport, which the scheme relies on to fund its £207.3m budget.
While the first and most optimistic scenario assumes that demand for the central tram line returns to pre-covid levels by 2022, and demand for journeys to the airport returns by 2023, the fourth and most pessimistic scenario projects a drop in demand of just 20% in the years following the pandemic, which would force the council to use £93m of its reserves and take until 2055 to pay back.
Now, opposition councillors have warned the council could be faced with difficult decisions in the future in order to continue financing the tram extension to Newhaven.
At a meeting of the council’s transport committee, which met yesterday to hear the report, Inverleith councillor and Conservative group leader, Iain Whyte, introduced an amendment to send the report to the next full council meeting for approval.
He said: “I think you will agree with me that the discussion this morning has largely been about financial risk, the risk to the reserves of the council and the cost to the council of either continuing with or cancelling this project.
“It strikes me that those risks show a huge downside of either option, and all of that has been surrounded by a huge amount of uncertainty, which as we’ve heard from officers we haven’t done any planning to see how we could pay for any of it.
“It strikes me, also, that basically what we’re saying is, given our reserves are already being run down because of the covid situation this financial year, we’re not making savings we said we would make, that essentially we’re bust now if we cancel, or we might be really bust in three or four years time if we carry on and the passenger demand doesn’t come back.
“At this stage, the only option I have to make sure those councillors are aware of this is to send it to full council.”
Councillor Whyte’s amendment was voted down by four votes to seven, however, he invoked a council rule that allows members to send agenda items to full council for ratification, as long as a quarter of committee members agree.
As councillor Whyte had the backing of three other members of the committee, the report will now go before the full council for further discussion.
Transport convenor, Lesley Macinnes, SNP, said: “I would like to draw attention to the fact, not only the level of attention and detail that has went into this report, but also draw attention to the fact that I do not appreciate the kind of inflammatory language that’s been used around this to talk about us ‘going bust’ over this.
“It’s a quite clear attempt to find a headline, and I think it’s irresponsible at this point, when we’re attempting to make a decision – a complex decision and complex understanding of what this can deliver for the city long term and in short term, and how we might proceed on this.
Jospeh Anderson is the Local Democracy Reporter covering Edinburgh. The Local Democracy Reporting Service (LDRS) is a public service news agency funded by the BBC, provided by the local news sector, and used by qualifying partners. Local Democracy Reporters cover top-tier local authorities and other public service organisations.