Forth Ports refuses to make £29m donation to trams project

Published on Monday 14 June 2010 11:20

THE developer behind plans for the biggest expansion of Edinburgh in hundreds of years has backtracked on plans to provide an up-front payment of £29 million towards the tram project.

Forth Ports – which plans nine "urban villages" at Leith Docks in a 30-year area regeneration – insists the payment, along with 34m of investment in transport infrastructure, would make its development "economically unviable".

It instead wants to pay only 3.2m when the tram project is completed and will agree on how much to contribute to improving transport links at a later stage.

The 3.2m is to form the basis of the "section 75" agreement for the first two "villages" to be built, due to go before the city's planning committee in a fortnight.

Transport chiefs at the city council have been willing to agree to phase tram payments – but insist the company must still pay the full tram contribution, as well as paying 34.8m towards essential transport upgrades.

This comes after the News revealed on Monday that the city faces huge delays to the tram system as council bosses prepare to kick German contractor Bilfinger Berger off the project. And on Wednesday we told how just 18 per cent of the project had been completed but two-thirds of the budget has been spent.

Nathan Thompson, managing director of Forth Property Developments, said: "We can only afford to pay what the economics will allow us to pay. We will assess each village before each application.

"Any contribution will be over the life scale of development. We will look at the economics of that and what we can afford to pay."

An initial 3.2m contribution has been offered that relates to the first two phases at Leith Docks and the Harbour. Mr Thompson said this amounts to 50 per cent of the current value of the development land.

The proposals include a new entertainment centre, hotel, over 1,000 homes and a new military vessel by a relocated Britannia.

But there is no commitment to extra school capacity or 34m of transport improvements that the council sees as essential to cope with the additional demand.

Council officials recommended that phasing tram payments should be accepted, although councillors have asked to see proof that the company would be unable to pay the full tram and transport contribution now.

Forth Ports was initially meant to pay 34.8m towards the upgrade of roads to deal with excess traffic.

In a submission to the city's planning committee, transport officials said: "Forth Ports has indicated that they can no longer meet these requirements, as they render the development economically unviable."