Project Finance News: Edinburgh City Council agrees in principle to extension of city tram line
On 19 November 2015, Edinburgh City Council approved in principle the proposal to extend the city’s tram line, reportedly expected to cost around £160 million. The Council has until its next meeting on 10 December to make a final decision on whether or not to give the project the green light.
The tram line, which has been active since May 2014, currently runs from Edinburgh Airport to York Place. Under the new proposals, the line would be extended 3 miles from York Place, through Leith Walk, to reach Newhaven.
On 19 November, the Council considered the recommendations contained in “Edinburgh Tram Extension – Next Steps”, which reports that the project can be funded by wider Public Transport revenues, with no impact on Council revenues in the short, medium and long term. The business case envisages using a £20 million dividend from Lothian Buses to finance in part the extension. The report concludes that extension of the tram line would result in overall economic benefit to Edinburgh, along with wider benefits in relation to, for example, employment opportunities through development of the Leith waterfront. It concluded that it would help address the transport needs of a growing population. However, the Council noted that more detailed financial assessments require to be carried out before final approval can be given.
The timescales set out in the report envisage Stage 1 (Project Establishment) lasting 9 months, and Stage 2 (Project Development) lasting 21 months, resulting in completion by the end of April 2018.