It was almost inevitable it would happen but the Final Business Case (FBC) for extending the Edinburgh Trams line to Newhaven via Leith Walk has confirmed that the estimated cost will now be £207m (including contingency) up from the previous estimate of £165m. Despite this increase the City of Edinburgh Council have said it remains affordable, is self financing and would not divert funds from other Council services. Nonetheless the news is going to be met with dismay from many in the city who are still angry about the initial project and awaiting for answers from the inquiry.
The FBC sets out the robust strategic, economic, financial, commercial and management case for extending the line and also outlines the project cost and timescales to allow councillors to make a final decision – this is due to take place on 14th March. A special “data room” has been opened in the City Chambers to allow councillors to fully inspect the FBC.
In coming to the FBC, the Trams to Newhaven project team have been following best practice for major capital projects from both HM Treasury (Green Book) and Scottish Government (STAG) and after a thorough tendering process it outlines that the project can be delivered within a budget of £196m. This figure does include a significant additional risk allocation as well as funding to support local businesses through the construction period. A further 6% level of optimism basis is also being applied to the FBC which would take the overall cost of the project to £207.3m.
These figures are up to 25% more than previous estimates but despite this the City of Edinburgh Council still believe it to be affordable. Cllr Adam McVey, Council Leader, said: “We need to invest in our Capital city’s continued success and deal with the growth of our population in a sustainable way. Edinburgh has a fantastic public transport network but we need to extend tram to build on our first-class, fully-integrated transport system. As Scotland’s fastest growing city, things simply cannot continue as they are – the transport system must evolve to cater to a rapidly growing population. 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. 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 successful major infrastructure projects depend on extensive scrutiny and this major project is no different. All Councillors will be taking the opportunity to examine in detail the FBC and associated documents in detail so that we can collectively make as informed a decision as possible come 14 March. If Council moves ahead with this project, we’ll be working hard to make sure we deliver this project on time, on budget.”
Funding for the extension would be through future tram revenues and a special dividend from Lothian Buses. It is projected that in the first year of the extension almost 16 million passengers will be carried – this is nearly double the number being carried on the existing line in the same year.
Because of the issues experienced with major projects in Scotland previously – none more so than phase one of Edinburgh Trams – the project team have left no stone unturned in checking the data and have tested the FBC against the risk of similar, past, completed tram projects (an approach developed by academics from the University of Oxford). This data showed that the project is more likely than not to be delivered within budget but they also recommended that an additional £50m is included in the budget for all eventualities. Even in this scenario – described as unlikely in the report – the project would be delivered without putting additional pressure on the Council budget and would represent value for money for the taxpayer, deliver significant economic, social and environmental benefits and be affordable within the overall financial model.
Cllr Cammy Day, Deputy Council Leader, said: “A tram to Newhaven would not only provide a direct link for the people of Newhaven and Leith to the city centre and out to the airport, but would connect residents and visitors to major employment and travel hubs along the route. Completing the original vision for the first phase of the Edinburgh Trams network would unlock a large area of the city for housing development and employment opportunities. From the very start of this process when the updated Outline Business Case was approved, we pledged to do everything we could to make sure these plans are truly community-based – and I think we’ve achieved that. Through tireless public consultation to hone the designs, respond to concerns, explore solutions and develop measures to ensure a lasting positive legacy for the whole area, we’ve managed to arrive at a final set of plans that – if given the final go-ahead – will deliver real benefits for the people of Leith, north Edinburgh, and the city as a whole.”
One thing which has been learnt from the original construction is that it has been confirmed a one dig approach will be taken this time around. This will see each worksite closed just the once and only opened when all works – including archaeology, pre-infrastructure works and construction of the tram route – are completed.
The full final business case will be made public later in February as part of the agenda for the Transport and Environment Committee’s meeting on 28th February. After this a further report on the award of the “swept path” and infrastructure and systems contracts will go to the Finance and Resources Committee on 7th March ahead of the final decision being made on 14th March 2019. If – and it remains to be seen how big an if this is – the go-ahead is given it is envisaged trams will start running in early 2023 after six months testing from late 2022.
However that final decision does go in around five weeks time we are likely to know for sure if it will be a case of Trams to Newhaven or not.