Your article on Edinburgh tram passengers being expected to exceed three million (your report, 13 December) raises issues that were never addressed in the report Preparing for Operations, submitted to the City of Edinburgh Council in August 2013, which scoped the cost of running the trams over the next 15 years.
The salient points of this report were: total income of £228 million; operating cost of £177m; gross profit of £51m; a £3m dividend; and £48m contribution to a required maintenance fund of £85m. The “paid” passenger projection was five million, 40 per cent of which would pay the premium airport zone fare of £5. An annual dividend from Lothian Buses of £3.2m and a yearly management fee to that company of £6m were included but unexplained.
You report that Passenger Focus magazine has raised doubt about the number of people actually paying the premium fare and, assuming the trams patronage continues at three million journeys for the first seven months, then that would result in five million journeys per year – paying and concessionary combined.
The City of Edinburgh Council has refused to provide a breakdown of how tram income has so far been comprised. However, adopting a reasonable assumption of 20 per cent concessionary/Ridacard users and 20 per cent paying a premium fare, this presents the stark result that full fare passenger journeys drop to four million (one million below expectation); actual income would reduce to £132m over 15 years, generating losses of £45m. To that figure must be added the £85m maintenance fund costs, resulting in total operating losses of £130m (£8.6m per year).
The annual capital repayment and interest costs of £19m would result in a spend on trams of £27.6m a year.
John RT Carson