City trams to be 'partly privatised' 17 | 06 | 2011

EDINBURGH'S TRAM FIASCO just seems to lurch from one new revelation to another. The latest admission from Edinburgh City Council is that part of the ill-fated £545 million project could be funded and completed by a private company if agreement is not reached with the current contractors.

Just what is going on here? One minute the 'brains' behind the scheme say they will not consider private funding, the next they're admitting "well part of it might be privately funded."

According to transport convener Gordon Mackenzie, talks have already been held between him and a firm which had offered to finance and finish the route east from St Andrew Square in the city centre to Newhaven.

Thankfully, he ruled out separate trams being run on different parts of the line from Edinburgh Airport. But Mackenzie did admit the more likely scenario was the council would be charged for using the eastern part of the route if it was built separately.

While obviously not the ideal solution — and let's be honest here, is there ever going to be an 'ideal solution?' — such an approach has already worked elsewhere in the UK. The Docklands Light Railway (DLR) in London adopted the solution for an extension built and maintained by another firm.

The new route towards a solution by Mackenzie comes as the council faces a shortfall of £200 million to complete the line as far as St Andrew Square; unless you've living beneath a stone for the past two years, you'll be aware this shortfall is because of a two-year dispute with the construction consortium led by German firm Bilfinger Berger over changes.

Councillors had been due to decide in two weeks whether to keep the project going, or mothball or cancel it; but, in keeping with the lack of integrated working within the trams project, it's understood the full costs of these options may not be available in time. That being the case, the decision on whether to mothball etc etc will be delayed … again.

Of the current £545m budget, £440m has been spent, and all we have is a few miles of tram track laid. The outlay has also included diverting far more underground pipes and cables from the route than expected, building the fleet of 27 trams, and several bridges and viaducts.

"We had an approach from a company interested in taking the tram forward once the current dispute is resolved," Mr Mackenzie said:

"It offered to design, build, finance and operate a further part of the route to Newhaven. It also talked about operating the trams. We said we were not interested in someone else operating the route because we want that to be done by council-owned Lothian Buses.

"We could look at other models of delivery. There are people who have approached the council, saying, 'We would be happy to build extensions to a tram network', and then you get into a discussion as to whether they would run it or lease it to the council — that's a model which doesn't require the same upfront investment from the public sector."

First though, the city council has to reach agreement with the Bilfinger Berger-led consortium.

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Mark Stephens