Councillors today voted to back the principle of extending the tramline to Newhaven.
A decision on spending any money, however, will be delayed until the next full Council meeting on 10 December to allow time for another look at the business case.
In particular, officials will consult Lothian Buses to assess the effect of extracting from it an extraordinary dividend of £20 million. This sum would be in additon to a £5m dividend which the Council has already received. Both amounts are earmarked for the first block of spending on the estimated £147m–£162m extension.
The Report on ‘Edinburgh Tram Extension – next steps’ (see below) asserts:
While the Council will need to identify additional resources to fund the borrowing costs required for the project, these can be funded from wider Public Transport revenues with no impact on Council revenue budgets in the short, medium and long term.
Council Leader Andrew Burns (Lab) began by pointing to the trams’ better-than-expected performance in their first year of operation. The number of bus journeys has also increased.
Edinburgh’s population is growing at 1 per cent a year, he said, and its public transport must develop accordingly. Extending the line would bring economic benefits.
Describing himself as a huge fan of the bus network, he promised that the Capital Coalition would do nothing that damaged Lothian Buses, in which the Council has a 91 per cent stake. Approaching LB at this stage to formally clarify in detail the 'impact on the bus company's outputs and liabilities' is a prudent, 'first cautious step' in the right direction.
Paragraph 1.1.13 of the motion (attached below) also undertook to look carefully at 'correlating completely as much as possible' all the different projects along Leith Walk, with a view to minimising the impact on businesses and residents there facing a second round of disruption.
He wanted to be sure of the financial case and the risk to the existing tram system and to Council services in general.
Many questions remain. For example: Have all funding sources been assessed? Are variances in projected expenses and revenues accurate? What impact will extending the trams have on the City Deals agreement? Have we reached the right decision regarding the Granton Spur? 'Are we de-risking or deluding ourselves?'
He acknowledged serious disquiet at ‘plundering’ Lothian Buses’ profits, and stressed that lessons must be learned from past mistakes concerning contract design, governance and utilities.
So long as potential risks and financial challenges are identified and squarely addressed, he said, then the potential benefits of trams for population growth, strategic development and passenger capacity are very attractive.
Cllr Nick Cook (Con) invited councillors of all political persuasions to vote for ‘sanity’. Rising costs, the effect on Lothian Buses, and too many assumptions, uncertainties and risks make the plan ‘plain wrong’.
It is mistaken, he says, to continue before the Hardie Inquiry had reported. Colleague Ian Whyte next said officers had not pushed hard enough for a realistic price from contractors, and that the scheme is unrealistic and fiscally irresponsible.
Green and Lib-Dem support
Cllr Nigel Bagshaw (Green) said extending the tramline makes good transport, economic and environmental sense. It would serve densely populated Leith well, and switch development away from green-belt sites towards more central brown-field ones.
Cllr Robert Aldridge (Lib-Dem) accused the Conservatives of short-sighted popularism, and stressed a need for long-term transport development.
Among other speakers, Cllr Joanna Mowat (Con) added that trams displace motor traffic and air pollution to adjoining residential areas. New, greener bus technology is developing fast, she said, and is much cheaper. Cllr Cameron Rose (Con) doubted the Council’s and Coalition’s ability to manage this 'ruinously expensive' project competently.
Cllr Burns concluded by saying that lessons had indeed been learned from past mistakes and would be rigorously applied in future. Conservative opponents had offered no compelling alternatives, he said, and their position was backward-looking and self-contradictory.
The motion was carried by 44 votes to 11. You can watch the podcast here.
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Fergus Smith Where exactly are Lothian Buses supposed to find £20m in "extraordinary dividends"? Fare rises on the way, for sure.
And given CEC's track record when it comes to business cases, I remain entirely sceptical about any figures they produce.
Fergus Smith "[Andrew Burns] promised that the Capital Coalition would do nothing that damaged Lothian Buses". I'd be very interested in an explanation of how extracting £20m from a business can be done *without* damaging it.
"Cllr Burns concluded by saying that lessons had indeed been learned from past mistakes and would be rigorously applied in future." Given that the inquiry hasn't reported yet - has it even met yet? -, how can we take this statement at all seriously?
Euan MacGuzzi McGlynn this is the most ridiculous decision. Taken before the tram inquiry is published I wonder why.