Race to rescue trams ends at midnight but funding still in doubt

COUNCIL officials in Edinburgh are racing against time to conclude a deal to rescue the city’s troubled tram project – without knowing if the Scottish Government will hand over the remaining £72 million of its funding for the scheme.

Chief executive Sue Bruce and her team are expected to “go to the wire” to hammer out a deal with the German-led construction consortium building the project before a deadline of midnight tonight.

The government is believed to be considering withholding all of the remaining funding until after the council agrees a new funding deal with its contractors, despite mounting pressure from politicians and business leaders to state what support is available.

The council has been locked in talks over a new deal to cut short the first phase of the tram scheme – so that it will run from Edinburgh airport to St Andrew Square – since March.

But last night there was still confusion over how much this would cost to deliver, and whether the government will be handing over all £500m of the funding previously agreed by MSPs, which was to pay for a line running to the city’s waterfront.

The Scottish Government is also facing growing demands to spell out the timetable for a public inquiry amid fears it could be delayed until 2014 – the earliest date the tram scheme is expected to be operational.

Scottish Government sources have insisted “the ball is very much in the council’s court”, despite fears of a massive funding gap if ministers fail to stump up all of the original grant.

Officials are desperate to conclude a deal today after giving the go-ahead last week to the resumption of tramworks on Princes Street on Monday – triggering a nine-month closure of the thoroughfare to traffic.

A new deadline of tonight was set in the wake of the council reversing a controversial decision last month to curtail the first line even more drastically so that trams would only run as far as Haymarket initially.

This decision prompted the Scottish Government to threaten to withdraw further funding unless the decision was reversed. SNP councillors dropped their long-held opposition to the project to vote in favour of the line to St Andrew Square, even though the local authority faces having to borrow some £231m to get it off the ground.

Business leaders in the capital are demanding that ministers clear up confusion over how much of the council’s grant will be released.

Michael Apter, chair of the West End Traders Association, said: “The council should have had absolute assurances on funding from the Scottish Government before it made any decision to press ahead with a line to St Andrew Square.”

Graham Birse, deputy chief executive of Edinburgh Chamber of Commerce, said: “We now need absolute certainty and clarity around the completion of the tram project as soon as possible.”

Gordon Mackenzie, the council’s transport leader, said: “I don’t have any serious concerns because we have been in constant contact with the government and Transport Scotland, but we are really focusing on getting a new agreement with the contractors.”