Edinburgh tram extension cost soars to £207m

The cost of extending Edinburgh's controversial tram scheme has jumped by 25% to £207m.

Edinburgh City Council is considering lengthening the tram line by 2.8 miles (4.6km) from the city centre to Newhaven.

It was initially estimated this would cost £165m but a final business case for the project now states it will be £207m, including a contingency fund.

A final decision on the extension will be made next month.

If the extension is approved by councillors, the works should be completed by 2022 and operational in the first quarter of 2023.

In the first year of operation, the council predicts 16 million passengers will use the line.

The original tram project came in at twice its original budget and the mistakes made on that scheme are subject to an ongoing public inquiry.

Council leader Adam McVey said he was confident there would be no repeat of the problems faced by the original tram scheme.

He said: "We'll be working very hard with the project team to make sure the things that happened in the last project are not repeated and, crucially, the things that happened when we got the project back on track are repeated.

"Edinburgh has a fantastic public transport network but we need to extend the tram to build on our first-class, fully-integrated transport system.

"Having developed the case further and gone through the tender process, we now have much greater certainty of the total project cost - following industry guidance, learning the lessons from the previous project and taking a thorough, diligent and prudent approach to risk management."

Asked why the council was not waiting until the findings of the public inquiry into the original tram project were published, Councillor McVey said to do so would be a "dereliction of duty".

Conservative leader Councillor Iain Whyte said: "I've got huge concerns because if you look at the figures this works out at £92m per mile for what is an extension to a tram line that has already supposedly been half built, that is even more cost per mile than there was on the overrun on the last work to York Place.

"This isn't so much connecting the city, it is likely to bankrupt the city."

Although the details of the final business case are not being revealed to the public until it is considered by the council's transport committee on 28 February, the council has said it can be built within a budget of £196m - an increase from the initial £165m estimation.

However, councillors will be asked to approve an overall budget of £207m to include a recommended 6% level of "optimism bias" to take account of an increased risk buffer for any problems encountered.

An initial assessment of the extension was predicted to cost a total of £165m.

The project will be funded through borrowing paid back by future tram fare revenues, along with a special £20m dividend from the city's public bus firm Lothian Buses.

Taking into account lessons learnt in the first phase of the tram project, construction is planned using a "one-dig" approach - closing each work site only once and opening them again only once all works are complete.

Councillors approved the extension in principle in 2015 but a final vote on the tram extension will take place on 14 March.

The delayed original tram line was opened in 2014 and cost £776m for a shortened route - more than double the original budget.

Deputy council leader, Councillor Cammy Day, said: "A tram to Newhaven would not only provide a direct link for the people of Newhaven and Leith to the city centre and out to the airport, but would connect residents and visitors to major employment and travel hubs along the route."