Thursday November 19th 2020
Written by Local Democracy Reporter, Joseph Anderson
Opposition councillors have called on Edinburgh City Council’s ruling administration to ‘eat a large slice of humble pie’ over its tram extension project, after a financial report laid bare the huge risks to the council’s coffers.
However, members of the council’s ruling SNP/Labour coalition have said the ‘Trams to Newhaven’ project remains on budget, nobody could have predicted the coronavirus pandemic, and that “hindsight is a wonderful thing”.
A financial report, carried out on behalf of the council by London-based consultancy firm Steer, has shown that the coronavirus pandemic could have such an enormous impact on the tram network extension that the cost of cancelling the project 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 will return to pre-covid levels by 2022, and demand for journeys to the airport will return 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.
At a meeting of Edinburgh City Council on Thursday November 19, councillors debated the project.
Liberton and Gilmerton councillor, and SNP chair of the council’s transport committee, Lesley Macinnes, said:
“At last week’s transport committee we noted that the economic case remains positive, despite the amount of scenarios we tried to view this through.
“We also noted that in all but one scenario, the cost of cancellation at this stage is higher than continuing and actually delivering this vital project.
“I think hindsight, as evidenced by parts of the proposed Tory amendment, is a wonderful thing, but really effective foresight is unfortunately a much rarer creature to find.
“This report represents a very real attempt to describe, to understand and to work effectively within an uncertain future.”
Inverleith councillor, and leader of the council’s Conservative group, Iain Whyte, said:
“This report tells us there is huge risk going forward – and it tells us that based on fare revenue, within the Covid situation.
“Councillor Macinnes just said a few moments ago, that we were very good at hindsight, and perhaps she’s going to suggest ‘we told you so’ – well we did tell you so, and with considerable foresight.
“We told you that taking forward this tram project, on the basis of risky future fare revenue to pay back the loan, was a huge risk that wasn’t sustainable and we weren’t prepared to make. This report highlights that.”
Morningside councillor Nick Cook, Conservatives, said:
“We have an absolutely torrid choice between an unaffordable cancellation, at an immediate cost, or an unaffordable risk and a strain on council reserves in future of up to £93m.
“It was all based on far too many rosy assumptions and it is very disappointing that the answer still seems to be to press ahead based on assumptions at a time when how people travel and go about their business has never been more uncertain.
“It is our most deprived communities in Edinburgh that will suffer the most, by the debt and deficit caused by this tram project, and we shouldn’t lose sight of that.
“The council is out of its depth with this project, we’ve always said that was the case. It’s time for a large slice of pie, humble pie, but I take no pleasure in saying ‘I told you so’.”
Colinton and Fairmilehead councillor Phil Doggart, Conservatives added:
“Very sadly we’re between a rock and a hard place. We have two unpalatable options, neither of which is good for the city.
“It’s very straightforward to come up with scenarios that paint a project in a good light, but those scenarios must be mired in realism.
“We have major issues around the number of passengers who will be using the trams. The project board has not had any discussions with major city centre employers to understand the number of passengers who will be travelling into the city centre.
“If anyone believes that the offices are going to be filled in the near future they are living in cloud cuckoo land.”
Council leader Adam McVey, who represents Leith for the SNP, defended the project, saying:
“This project is still forecast, and I’m confident it will be within budget.
“It is within budget because we set very prudent budgets for how this would be delivered, taking into account some of the challenges which we anticipated and may not have.
“We worked very hard to ensure that difficulties could be addressed within that process. This is not a project for next year, it is a long term project for the long term connectivity of our city.
“Leith will benefit enormously from that connectivity and the city will benefit enormously.
“It will help enable development, to house people in this city, and crucially, without using green belt land to do it in the city.”Tweet Share on Facebook