Bill Jamieson: Scotland's reputation is on the line

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A decision on the fate of the Edinburgh tram scheme will attract international attention

DAMNED if you scrap it and damned if you don't: the fate of Scotland's largest current infrastructure project, the Edinburgh tramway scheme, now hangs in the balance. Scrap it or soldier on? Whichever way the City of Edinburgh councillors vote at a critical meeting next week to decide the fate of the project, they are faced with losses even bigger than the figures so far made public.

What should have been a national transport showpiece has turned into a debacle that has reverberated round the world. After years of infrastructure work with consequent massive delays, inconvenience and congestion in the centre of the city, the original scheme has long been abandoned.

Simply completing a truncated scheme with a line running between the city's airport and Haymarket is now reckoned to cost at least 700 million - 200m more than the Scottish Government budgeted for the entire project. And it would condemn the city to a permanent annual subsidy of 4m a year: there is no prospect such a line would ever run at a profit.

The other choices are no less dire. The cost of extending the line to St Andrew Square is now estimated to take the final bill to 770m, and with no clarity on how the funding gap between this and the initial estimate will be bridged.

As for abandoning the project altogether - as many tram crisis-weary citizens wish had happened years ago - this could cost the city, on top of the money already spent, extra millions in cancellation fees and penalties and take the full cost of the write-off to 750m: an appalling end to a project that has seemed cursed at every turn.

Politically, it is now highly tempting for the SNP to pull the plug on the entire debacle. It owes this project nothing. It opposed the trams from the start. And finance secretary John Swinney has long declared that not a penny more than the initial 500m would be given to the tram project from the Scottish Government coffers.

In retrospect, this was always a curious attitude for the SNP to take. No party has more loudly banged the drum for big transport infrastructure projects of this kind. No party has set more challenging ambitions in the switch from dependence on fossil fuels to a low carbon economy and renewable energy than the SNP. A healthier, cleaner, greener Scotland is its aim. And the word "sustainability" features in almost every utterance it makes.Why, then, should it have been so doggedly opposed to a project that encapsulated so many of its lofty objectives? Was it out of narrow political calculation and budget log-rolling: spend less in the capital to have more money for its Highland heartlands and projects in the west where the SNP is now fighting for every Labour vote?

There are now bigger considerations here than party calculus and problem avoidance. This project was intended to be a signature for Scotland's capital city. Edinburgh has an instant recognition and appeal for millions round the globe. It is our claim to world heritage status and a tourist moneyspinner.

What happens here is of international interest. Throwing in the towel now would be so public an admission of failure, such an egg-in-the-face moment as to draw international attention - and not at all of the kind that the SNP, preparing a referendum on Scottish independence, would wish.

For a government seeking to convince not only Scottish voters but the wider world that it has the competence and wherewithal to run an independent country, how it handles its largest infrastructure project cannot but be an object of scrutiny. It will be seen as a test of the Scottish Government's competence, credibility and resolve. If it can't oversee this project to some sort of completion, from what else might it flinch when the going gets tough?

Then there is the economic case for biting the bullet and seeing the project through from Haymarket at least to St Andrew Square. Yes, there are extra costs. But as well as the prospect of viability - such a line is projected to be capable of an annual profit of 2m - the 700m-plus committed so far would at least yield a functioning tramway scheme rather than ending up as a total waste with no public benefit whatever.

Painful though it is for many of its critics, including myself, to face, the choice is not between spending that extra 70m and spending not a penny more: it is between salvaging something out of the carnage or letting 700m sink without trace.

Politically, it is the toughest call. The understandable gut reaction among many in Edinburgh is to walk away now, put the scheme into mothballs and wait for a more propitious time when the project can be re-appraised and brought to some form of completion. But there are heavy costs in this option. True, Edinburgh citizens and visitors would have to put up with more disruption, and with it a high decibel count of taxi-driver imprecation. But this is a decision that needs to be taken, not on the basis of how we might immediately feel, but on how we might feel the day after tomorrow when some benefit at least can be salvaged and a tram scheme of sorts is under way.

One thing is for sure: the city's chronic congestion is not going to disappear. As its population continues to grow, that problem becomes ever more acute.

It is not the tram project per se that has so ignited public ire. It is (yet again) a sense of outrage and betrayal that flowed directly from initial underestimates of the work involved and the problems that arose over utility infrastructure. Right up until last year, those in charge of the project continued to give assurance that it would be delivered "to budget" when everyone could see that this was not remotely possible. The same surreal public relations spin prevailed over the M74 extension. This began with an estimated cost in 2001 of 245m and a completion date of 2008. The final cost, including land, came to 692m and the extension is finally due to open next week, accompanied by farcical ministerial assertions that it had come in "15m to 20m under budget" and that it was opening "eight months early".

This is the blather that corrodes public confidence in projects and in the government's handling of them. Little wonder that the public mood in Edinburgh has soured so badly over the trams.

An inquiry there needs to be, and doubtless further attempts at face-saving renegotiation. But this is now a wider issue that merits more than a political cut and run. Scotland's reputation is on the line.