Edinburgh braced for £1bn of chaos if tramworks restart

DOUBLE disruption is due to hit Edinburgh city centre next month if councillors approve plans to resume major building work on the tram scheme, which would bring the total cost to nearly £1 billion.

Traffic will be diverted from both Princes Street and Haymarket for months, which is likely to hit bus passengers hard.

The tram line work will go ahead if the city council approves plans to borrow more than 200 million in extra funding next Thursday.

That would enable part of the original route to be completed, between Edinburgh airport and St Andrew Square, at the east end of the city centre, at an expected cost of up to 770m.

This compares to the previous budget of 545m for the whole line to Newhaven, and trams are now not expected to start running until 2014 - three years later than planned.

The city council said yesterday it was confident it could pay for the extra borrowing without cutting other services.

And it hopes for an extra 20m a year from the Scottish Government as part of a shake-up of council funding next year.

The planned additional loan would be repaid at the rate of 15m a year over 30 years, costing a total of 450m, and bringing the overall cost of the project to 995m.

However, the council pointed out the cost of public projects was normally quoted in up-front rather than whole-life costs, partly because of the effect of inflation in future years.

Transport sources predicted the proposed work would cause "inevitable delays and disruption" and bus operators would struggle to provide reliable services.

The increase in the project cost has been largely due to a dispute between council-owned tram developers Tie and building contractors led by German firm Bilfinger Berger.

The row, over the cost and responsibility for changes to the design of the scheme, was resolved following mediation talks in the spring.

The agreement will involve the council paying millions of pounds to the construction group, which won most independent adjudications in an earlier dispute resolution process.

The extra Scottish Government funding would come from a change that no councils would receive less than 85 per cent of average funding per head. Edinburgh currently gets 82 per cent.

The Scottish Government said yesterday it was committed to the change but could not yet predict its impact on Edinburgh.

Meanwhile, council officials brought in consultants this week to review how the project is run. Tie is expected to be wound up.

Turner & Townsend, which has worked on English and Irish tram schemes, started work on Monday as "external project management support", the council said.It remains unclear whether any of Tie's remaining 30 staff - half have gone - will be kept on.

The project is expected to be moved from Tie's main offices at Haymarket to its portable buildings at Edinburgh Park.

Michael Dickson, Edinburgh branch chairman of the Federation of Small Businesses, said: "Businesses need to know where the tram line is going and how will be funded. Until we have a clear proposal, businesses remain uncertain."

A spokesman for the project said: "Traffic modelling has been undertaken to ensure this work can be accommodated, and continued support will be given to local traders and residents ."

Council city development director Dave Anderson said: "We have brought in external consultants to advise."