Edinburgh Trams: Project has seen losses of £44 million since opening due to major borrowing costs

Since opening 10 years ago, Edinburgh Trams have made a net loss of £44 million

The Edinburgh Trams have made a net loss of more than £44 million since opening ten years ago, figures have revealed, mainly due to borrowing costs associated with building the original line.

Coming in at more than £400m over budget and three years late, the capital’s trams have not run a profit since 2017.

Since then, according to Companies House, Edinburgh Trams have reported annual operating losses of £7.62m, £9m, £8.8m, £8.7m and £10.9m. In fact, the company has only made a profit twice - £250,000 in 2016, and £1.6m in 2017.

This means that since opening in May 2014, the trams have brought in a net loss of £44.19m. The council says it has charged an “annual asset fee” of £8.5m since 2018 to “reflect additional borrowing costs associated with the cost overrun on the original line”.

This comes to a total of £42.5m, meaning the losses since 2017 are largely attributable to this fee.

Sue Webber, Conservative MSP for the Lothian region, said: “These eye-watering losses only add insult to injury for those living and working in the capital. They already had to endure the construction bill for the trams spiralling out of control and reaching over £1 billion.

“The least they would have expected is for the trams to now be turning a profit.”

John Swinney. Picture: Jeff J Mitchell/Getty Images

Last year 9.3m passengers travelled on the Edinburgh Trams, with 1.2m trips being made in the month of August during the Fringe alone. The line was extended to Newhaven in June, bringing the total length to 11.5 miles.

Councillor Scott Arthur, transport convener at Edinburgh Council, said the benefits to the city “go far beyond the cost or profit”.

He said: “In the ten years since the original line between Edinburgh Airport and York Place was built, the tram service has flourished to become a hugely successful transport route for thousands of residents and visitors each day. This year we expect it to carry one million passengers per month.

“I am proud that Edinburgh Trams has developed into a multi award-winning company, offering a reliable and fast service, allowing residents to move around sustainably and efficiently, and with some of the cheapest fares in the country.

“The successful completion of the line to Newhaven last year has brought huge economic, social and environmental benefits to Leith, north Edinburgh and to the city as a whole - demonstrating that the value that trams bring to the city go far beyond the cost or profit of the company.

“Edinburgh has one of the UK’s best public transport systems, and I want it to be even better. That’s why we’re now looking at expanding the network further and will soon be launching a consultation on a north-south tram line between Granton and the BioQuarter, which has the potential to turbocharge the regional economy.

“Investment in public transport in Edinburgh is key to cutting congestion and accommodating up to 37,000 homes we expect to see built in Edinburgh in the coming years.

“The tram, alongside our wider public transport and active travel networks, remain key to creating a better connected, environmentally-friendly and sustainable city for all - and to meeting our ambitious 2030 climate targets.”

The Scottish Government declined to comment on the figures.