The City of Edinburgh Council have claimed that Edinburgh Trams will run at an operating profit \u2013 despite media reports suggesting otherwise. The Council says that in the 15 year business model, which will integrate the finances of Lothian Buses and the trams, there will be a surplus of \u00a35 million and that the tram on its own will run with a \u00a348 million operating surplus.<\/p>\n
<\/p>\n
According to a Council report maintenance and refurbishment costs for the tram system, which total \u00a387 million and are not part of the operating costs, will be covered by surplus income from the tram (\u00a348 million), through the dividend paid to the Council by Lothian Buses (\u00a330 million), a dividend from tram operation (\u00a33 million) and through other funding which comes to \u00a311 million. This other funding is expected to include tax savings and additional income including advertising. And all that apparently means that Edinburgh Trams will be able to come in at an operating surplus after the first 15 years. Clear? No, thought not.<\/p>\n
Perhaps Transport Convener, Cllr Lesley Hinds, can clear it up: \u201cThese figures are provisional but they stack up and, all things considered, Edinburgh\u2019s new transport company is predicted to deliver a surplus.\u00a0 Even on its own, the tram is predicted to deliver an operating surplus.\u00a0 The tram and bus service will be fully integrated, with tickets, timetabling and everything else being delivered through one system – this is the same for the finances. Under one company both services need to operate together. We\u2019ve already committed that tram will have no negative financial impact on the bus service and, although the arrangements are still in draft form, we\u2019ll ensure that any dividend drawn from income will go back into Edinburgh\u2019s transport system. Whilst this business model and all predictions have\u00a0been and continue to be verified externally, it\u2019s important to remember that they are still predictions. \u00a0The Council will bear the financial risk so I\u2019m determined that numbers are closely and continuously scrutinised as we move towards service.\u201d<\/p>\n
Basically it seems that as far as the Council are concerned the maintenance and refurbishment costs of the tram system are not included in the operating costs which means Edinburgh Trams can come in at a profit. This profit is then going to be used to partly pay for maintenance costs alongside any other funding sources they can find.<\/p>\n
The report was due to be considered by a Full Council meeting this week and a further report is then due to be produced in August once further financial due diligence is carried out.<\/p>\n","protected":false},"excerpt":{"rendered":"
The City of Edinburgh Council have claimed that Edinburgh Trams will run at an operating profit \u2013 despite media reports suggesting otherwise. The Council says that in the 15 year business model, which will integrate the finances of Lothian Buses … Continue reading