A report into the funding options available for completing the Edinburgh Tram Project from the airport to St Andrew Square was published today. Based on financial assessments produced by senior officers at Edinburgh City Council (ECC), it would see funds being raised by prudent borrowing against revenue streams contained within the ECC’s Long Term Financial Plan. This would cost the council just over £15 million, or 1 per cent of its gross expenditure.
The report adds that, if the project were cancelled, there would be a one year revenue impact of over £180m to cover associated costs. This decision would also cause significant reputational damage to the city and potential future investment. Discussions are continuing with the Scottish government on other future options which would reduce the requirement for further council borrowing.
According to the ECC's transport convener, Cllr Gordon Mackenzie, “It is important that we get a clear decision from Council to provide certainty for residents, businesses and to fulfil our contractual obligations. Despite the extra cost, the current Council have a strong record of balancing the budget while improving services and I am confident that will continue.
“The significance of the tram to the city's future economy is often overlooked because of the problems we have experienced but Edinburgh needs the Council to make decisions that look to the long term, not just the next election, and that means going to St Andrew Square in the first phase.”
Dave Anderson, ECC director of city development, said that “the work undertaken over the summer has enabled key project risks to be mitigated and will give the Council a solid platform from which to make the important decisions on funding and the commercial settlement that will enable a tram link to be completed into our city centre.”
The report also gives the independent verification of the funding options and risk allowance, along with a breakdown of the revenue streams from which repayment can be drawn. It explains the phasing of the funding requirements and shows alternative borrowing options now and future funding options for the future. Finally, it provides further detail on the work being undertaken to sort out the project management of the enterprise going forward.
In June, ECC updated its “Open for Business” scheme to provide support for businesses across the on-street section of the route. This will now include a focused marketing campaign, logistics support as well as funding towards the work being carried out by existing Town Centre Coordinators with an aim to encouraging footfall into the city centre and promoting Edinburgh as a vibrant destination for shopping, business and leisure.
The report will be considered at a full ECC meeting next week. Approval of the funding options would allow the involved parties to finalise a settlement agreement and work to restart throughout the route.
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