Alastair Richards in the Gogar depot
Bosses said a half-mile stretch could be opened between Gogarburn and the Gogar depot as early as the summer, with the possibility that the public could be taken on board the vehicles at a later date as part of a PR exercise for the beleaguered project.
The development comes as finishing touches are put to the delayed Gogar depot, one part of the 545 million project where work has not ground to a halt as a result of the dispute between tram firm TIE and contractor Bilfinger Berger.
TIE said it hoped the depot would be completed by April, allowing the trams to be tested on a section of track.
The vehicles could then be run on the section of route between Gogar and nearby Gogarburn later in the year, providing a breakthrough is made in talks with Bilfinger.
The Evening News was given an exclusive tour of the facility which will house the tram control room.
While still unfinished, the depot has been transformed from the shell of a building which stood at the side of the Gogar roundabout for much of this year.
Alastair Richards, managing director of Edinburgh Trams, said providing mediation talks went well with German firm Bilfinger Berger, passengers could be taken on board for the first time.
He said: "I wouldn't rule that out, but there's a good deal more to do in terms of safety measures before that can happen.
"As soon as the arguing is done, there's no reason why the track laying can't be completed.
"We're frustrated that the coverage doesn't always go our way, because people don't get to see what we see.
"But we're really frustrated (with the coverage] because it feels we're within grasp of getting track laid."
Mr Richards, who has worked on projects including the Docklands Light Railway and the Copenhagen metro, said mediation provided both sides with an opportunity for "face-saving" and getting the tram project back on track.
TIE was forced to take the first of the 2m tram vehicles to a storage yard in Broxburn after moving it from Princes Street in November.
But with the depot nearing completion, it is hoped the finished vehicles - some of which are being stored in Spain - can be moved in.
Mr Richards added: "We're probably there or thereabouts to have the tram delivered now, but we'll probably leave it until February or March.
"We hope that our initial piece of test track will be operational from April if there's a positive outcome to the mediation.
"We need a resolution in the current stand-off to make real progress."We're positive that mediation will see some way of that happening."
The most impressive part of the new facility will be the control room, which will eventually become the hub for the entire project.
Staffed 24 hours a day, the room is currently awaiting the installation of display consoles, which will provide information on how the line is operating.
But the managing director dismissed the idea that the depot could eventually be turned into some sort of visitor attraction, as previously suggested by TIE.
"This will be a working building," he said. "We will let visitors in, but it won't be a visitor attraction like the Castle or something like that."
Work at the depot has mostly been carried out by Scottish firm Barr Construction after being subcontracted out by Bilfinger Berger.
A source close to the consortium, of which Bilfinger Berger is part, said there was a growing sense of "optimism" that mediation talks could be productive.
There have been few positives for the tram project since early last year when track laying began on Princes Street.
The ongoing dispute between Bilfinger Berger and TIE has grown increasingly bitter and has further pushed back the arrival of the scheme and the proportion that will be completed within the budget.
Originally due for completion early this year, TIE says the depot is currently around one year late.
Engineers have encountered a series of problems at the site, including complications on diverting a huge water pipe which runs under the A8 close to the Gyle Shopping Centre.
John Carson, a former director of maintenance at Network Rail and long-standing tram critic, said the depot was still "far from complete." He said: "It's well away from being ready yet, and what good would it do anyway if they haven't finished the track?"
August 2007 Preparatory works begin on the Gogar site
April 2011 Depot completed/testing begins?
March 2008 The remains of a 14th century village are uncovered on the site
September 2008 work begins on the tunnel underneath the Gogar roundabout
April 2009 Earth works start
June 2009 Work on the depot running nine months behind schedule, it emerges
September 2009 TIE considers sending trams to Croydon for testing as schedule slips at Gogar
March 2010 Tram bosses claim work on the depot is "progressing well" despite a report saying it is not even 20 per cent complete
October 2009 Work begins on the building's foundations
November 2010 First tram vehicle taken to Broxburn for storage because depot not ready for it