Monday 8 December 2008

Trams and environmental damage

Why do people who claim to care about the environment support the Edinburgh Tram Project? One of the worst things this project will do is slap what amounts to a concrete road right across the flood plain of the Gogar Burn. That'll create flooding problems for people who live further downstream. Is Councillor Phil Wheeler concerned about that as he chases his dream of an oversized train set? This particular headache doesn't seem to worry him - wonder if he has a good supply of painkillers?

The Edinburgh Tram Project is in chaos. Line 1b was scrapped months ago, the intention being to move money from that project to pay for planning line 3 so they could take a complete case to the Scottish Government to ask for more money - that's why there's been so much chatter about that never-to-be-built line recently.

Events overtook them, line 1b cannot now be paid for and there are serious doubts over 1a. Even if the capital to build 1a is available, the absence of 1b means that 1a is not viable - going by the dodgy dossier that was the business case for the trams.

That business case relied on continued economic growth in Edinburgh - just to get enough passengers to break even. The contribution from Edinburgh Council was to be funded through developer contributions and the sale of property. £26 million was the projected income from developer contributions - they've had £3 million, and some of that was out of the city's education budget (school building project).

£23 million short and development has all but ceased along the route - no more developer contributions are expected for quite some time.

The £20 million to come from land sales took a hit as land values dropped and that money isn't there either.

The contracts for construction were negotiated in euro rather than sterling (honestly), so the £512 million estimate for 1a, made when the pound was stronger is now around £698 million. Work it out yourself - it was around 1.5 euro to each pound when the estimate was made, so about 768 million euro; 768 million euro at today's exchange rate of around 1.1 euro to the pound comes in around £698 million. That's £186 million over budget. We know that the funds weren't hedged - tie announced a cost rise some time ago when the first adverse movement in the currency exchange rate bit.

On top of that, the design won't be finalised until February (so neither will the costs) - remember the cost estimates were withheld from the councillors who were taking the decisions when they voted on this last year.

You'll remember that there is £13.77 million tram cost which has been shaved off the project in an earlier attempt to keep costs down - that the project intended to ask the Scottish Government for, there's £1.2 million in parking charges foregone for tram construction to be added, but still Councillor Wheeler thinks he can go back to the Scottish Government for more money.

So, unless the project team have managed the costs down properly (and there's no evidence of that), the real overall cost is around £712.97 million - and there's £503 million available (and still the design isn't final).

Line 1a won't be built.

Don't take my word for it - the Conservatives are preparing the exit -
S3W-17961 David McLetchie: To ask the Scottish Executive how much of its £500 million contribution to the Edinburgh trams project has already been spent, broken down by (a) date of release and (b) size and purpose of each payment.

S3W-17962 David McLetchie: To ask the Scottish Executive how payment of the remainder of its £500 million contribution to the Edinburgh trams project will be phased, specifying anticipated (a) timescale, (b) size and (c) purpose of each payment.

S3W-17963 David McLetchie: To ask the Scottish Executive whether its contribution to the Edinburgh trams project will remain at £500 million if Phase 1b does not go ahead.

Mind how you go!

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