It\u2019s a story which was always going to break at some point during the Coronavirus pandemic \u2013 doubts about whether the Trams to Newhaven project in Edinburgh will still be viable after all the financial implications of the restrictions are taken into consideration. The Edinburgh Evening News of 25th April 2020 ran with the lead story \u201cTram to Leith in doubt\u201d with a two page article inside the paper going into more detail and based on comments from the opposition Scottish Conservation Councillors.<\/p>\n
For a project which is, and always will be, controversial in some quarters as a result of the issues with the first phase of construction and became quite the political hot potato anything which may cause changes to it is always going to bring out opponents to say how it is in \u201cdoubt\u201d and that is exactly what seems to have happened here. The Scottish Conservative Councillors on the City of Edinburgh Council \u2013 who earlier this year blamed the extension of Council tax increases for the city \u2013 have briefed the press about how the financial situation throws the extension into doubt, whilst also giving a general warning about the state of the Council\u2019s finances. Whilst there is no doubt that as with the majority of Councils, the City of Edinburgh Council will see a massive squeeze on their budgets going forward it remains very early to call out the tram extension as a way for savings.<\/p>\n
You may remember that as part of the funding for the project Lothian Buses are due to provide a \u00a320 million dividend with borrowing against future revenue also due to go towards the \u00a3207.3 million budget, and both of these funding streams could be put at risk by the financial implications of not only the current Coronavirus lockdown but also the likely subsequent adjustment period which could last for several months for at least the remainder of 2020. There are also suggestions that after restrictions are fully lifted, whenever that may be, public transport usage may fall by as much as 20% which gives concerns over the borrowing against future fare revenue.<\/p>\n
As with many other transport operators across the UK, Lothian Buses are seeing their revenue drastically reduced at the moment with people heeding the advice to only travel for essential journeys. The Conservative Councillors have claimed that this reduction seriously puts into doubt their ability to provide their \u00a320 million dividend to the project and thus may mean it isn\u2019t possible to go-ahead with the entire project. Lothian Buses themselves have said it is too early to say what long-term financial impact there may be.<\/p>\n
There is no doubt that the finances of the Council are set to be affected by the pandemic with a report claiming that if there is a three month lockdown \u00a353.5million could be lost; and it is these losses that the Conservatives have said shows that the viability of the project is seriously compromised and have called on the ruling Council to produce a plan showing how it plans to deal with this.<\/p>\n
For their part, officials at the City of Edinburgh Council have denied that the project is already in doubt stating that it is too early to know the full implications, especially considering we are still in relatively early days of any restrictions.<\/p>\n
Cllr Adam McVey, Leader of the Council, is quoted in the article: \u201cThe tram team have put in an enormous amount of hard work with our contractors to take us through this challenging period. The implications of COVID-19 are unlikely to be understood for some time but we will make every effort to mitigate the impact and get the tram project back up and running when we\u2019re able to reopen the construction site. The Tram Project is being delivered for the future of our city and it\u2019s important to note that the project is largely funded through borrowing repaid by future tram revenues, so any impact to the council\u2019s budget now is limited.\u201d<\/p>\n
Work on the extension was suspended from 23rd March with no date set for its resumption. This is likely to, at the very least, have implications for the planned programme of works with a planned completion date in 2023 now up in the air.<\/p>\n","protected":false},"excerpt":{"rendered":"
It\u2019s a story which was always going to break at some point during the Coronavirus pandemic \u2013 doubts about whether the Trams to Newhaven project in Edinburgh will still be viable after all the financial implications of the restrictions are … Continue reading