Transport bosses deny bus sell-off plan to save trams

Published on Thursday 17 June 2010 09:53

TRAM bosses have denied that parts of Lothian Buses could be sold off to help bail out the city's troubled tram project.

It is understood that discussions have taken place about selling off the company's four depots and some of its vehicles, a move which sources believe could raise 50-70 million.

But the city's transport convener today said any such move would be a "non-starter".

It comes as a crunch meeting was held between tram firm TIE and contractors about the future of the project and the way forward in the dispute with Bilfinger Berger.

One source told the Evening News that selling off part of the council-owned bus firm was something which was on the cards as the bill spirals.

He said: "Selling Lothian Buses is something that would be hugely politically controversial. That being said, we are now in a situation where TIE is a cornered animal and cornered animals thrash around and react irrationally.

"They are so desperate to find money for the trams that things that would previously have been beyond the pale are now being considered."

It is understood that one option being looked at is to sell off some or all of the company's depot and some of the vehicles, leasing them back from the new owners.

The move would raise substantial amounts of cash, but would see the bus company saddled with interest payments which insiders said could lead to routes being cut and fares put up. Councillor Gordon Mackenzie, the city's transport convener, said: "It has not been discussed with myself or, as far as I'm aware, with the leader of the council. It's nothing to do with the Lib Dem administration.

"I'm sure people talk about all sorts of things about how they raise the funds, but if they come to myself or the leader of the council the answer will be no."

However, he said one option which was currently under consideration was to lease the tram vehicles, rather than own them outright.

A spokesman for TIE insisted there had been no discussions concerning the future of Lothian Buses. A meeting was held yesterday between TIE, Bilfinger Berger and other contractors over the project.

Last week, Cllr Mackenzie claimed the German firm was holding the city to ransom and warned the "ludicrous" position adopted by the company meant the local authority had no option but to terminate the contract if it did not change its stance.

Terminating the contract would likely mean a court battle and all work on the project grinding to a halt, setting back the opening of the tram line by two to three years.

A source said the council and TIE were now using talks with the contractors to gauge how serious Bilfinger was about trying to reach an amicable resolution.