City's trams vision is on right track

THE Capital's trams vision today took a huge step forward as its backers unveiled a business plan which showed the scheme was viable and would deliver hundreds of millions of pounds worth of benefits.

The business plan revealed there is enough money in place to build the main Leith to Edinburgh Airport line, and there may be enough left over to complete a spur route to the Granton Waterfront development.

But more importantly the report presented by TIE - the company set up by the council to deliver the trams - also predicted the service will be in profit within two years of its 2010 start date.

The business case, compiled by leading transport consultants Steer, Davies and Gleave, has been presented to the city councillors and will soon be sent to Scottish ministers.

They are now expected to give the system the go-ahead, with building work starting in March.

Councillor Ricky Henderson, the city's transport leader, today welcomed the report as a major step forward for the Capital.

He said: "This brings the reality of trams on Edinburgh's streets one step closer. We remain committed to ensuring this happens and that as much of the network as is affordable is built as quickly as possible.

"As a prosperous city we're acutely aware that we must manage growth so that Edinburgh does not grind to a halt. With a fast, efficient and environmentally sound record, trams are vital in ensuring this happens and will build on the already great public transport service in place across the city.

"Doing nothing is not an option, we have to think to the future - not the here and now. Edinburgh needs a modern transport system and the integrated system of trams and buses that we are proposing will keep Edinburgh moving well into the future."

Today's report reveals the cost of the trams has risen by £33m to £592m. However, that new figure includes a 12 per cent contingency fund, which is designed to cover any further increases.

Should that fund not be needed, TIE will have enough money to build both the airport line and the Granton spur.

If costs do rise, TIE is still confident of raising the extra cash it would need for the Granton line - which could be up to another £47m - largely from developers.

Central to today's report is a "benefit-to-cost ratio", which analyses the value of spending £592m on trams in quantifiable benefits such as more jobs and faster journey times, as well as less obvious benefits such as helping the environment or making it easier for elderly people to get around the city.

The business case sets this ratio at £1.63 worth of benefits for every £1 spent - far above the Borders rail link at just over £1, although less than the Edinburgh Airport Rail Link at £2.16.

TIE's business case suggest more than 30,000 people a day will use the trams in their first year, rising to around three times that number within 20 years.

Almost one in five of those are expected to be people who do not currently use public transport.

Edinburgh's booming economy is one of the reasons cited for the need for the return of trams.

There will be nearly 35,000 more people working in the Capital by 2015, and 23,800 new homes will need to be built, mainly at Granton and Leith Docks.

Trams can carry 20,000 passengers an hour, far more than buses and some roads are expected to reach capacity for buses in as little as five years.

City leaders also believe trams will rejuvenate the city centre.

TIE's business case predicts the trams will create 930 permanent new jobs, as well as over 1000 jobs through the construction phases.

From its second year of operation, the project is expected to have an operating profit - rising to as much as £45m by 2031 - all of which will be ploughed back in to public transport, with the exception of a £2m-plus annual dividend for the council.

The business case also reveals concessions have been made to critics of the initial proposals.

The idea of axing all bus services along Leith Walk has been dropped. Instead, the company which will operate the trams and Lothian Buses - Transport Edinburgh Limited (TEL) - has agreed to run six buses every hour from Leith Walk to Princes Street.

THE move is designed to make life easier for elderly and disabled people who would otherwise face long walks between tram stops.

The business case has been presented to councillors this week. The full council is expected to give the project its final approval at a meeting on December 21. Scottish Ministers are then expected to back the scheme in February, allowing work to start in March.

Neil Renilson, chief executive of TEL and Lothian Buses, described the business case as "robust".

"It clearly demonstrates the impressive benefits and future revenues trams are expected to deliver to Edinburgh," he said.

"The document contains a comprehensive analysis of patronage, costs and revenue, which have been benchmarked against existing schemes in Dublin and Nottingham. We have prices for the utility diversions, legal costs, tram vehicle and maintenance costs which have been supported by a detailed exercise to determine the target cost for the build of the tram infrastructure.

"The business case clearly shows how the integration of tram with bus through timetabling, common ticketing and interchange points support TEL as a business showing a profitable business in the future."

The trams business case took more than three years to prepare, and involved extensive transport modelling and analysis.

Around £60m has so far been spent on the project, mainly on legal costs. The Scottish Executive has agreed to provide £500m for the entire scheme, with the council adding £45m of its own money.

TIE has already signed a £40m contract with Alfred McAlpine to move gas pipes and water mains along the route.

This has helped provide a more accurate final cost, and four bids have also been received to provide the vehicles - thought to be in the region of £50m.

The main contract - building the tram lines - has been put out to tender, so the final cost will not be known until July 2007.

The possible future phases of the tram network - from Leith to Granton and from the airport to Newbridge - which were shelved earlier this year, are not included in the business case.

TIE chairman Willie Gallagher said: "It is important to remind ourselves of why we are developing trams in the first place.

"Edinburgh is growing, both in terms of its economy and its population. Those living and working in the city have to be able to move around quickly and efficiently.

"Edinburgh needs a modern transport system and the integrated system of trams and buses that we are proposing will keep Edinburgh moving into the future.

"What we are doing now is putting in place the spine of the network. The Leith to airport route will alleviate many of the congestion scenarios we face with our growing population. We fully expect Edinburgh to follow the path of other cities where the network grows in size."