And city leaders are eyeing European cash as a way to finance the extension after Transport Minister Keith Brown warned there would be no Scottish Government funds for any more phases of the tram route.
With just two months to go until trams start operating with passengers on the 8.5 mile route between the airport and York Place, attention has already turned to the possibility of taking trams down Leith Walk – where much of the preparatory work for the trams was carried out before soaring costs forced the abandonment of that stretch of the route.
The council is to spend £1m “tram proofing” improvement works in Leith Walk to pave the way for an extension.
Sources said the cost of taking the trams the extra 2.85 miles to Newhaven was around £80m. The council has already bought the track and vehicles. It is understood some utility diversion work remains to be done, but most of the cost would be construction of the line.
Mr Brown told MSPs on Wednesday the government had no intention of funding any further phases of tram works in Edinburgh, though he acknowledged it was looking at helping pay for “tram trains” in Glasgow.
Council chiefs shrugged off his comments and said they hoped to secure funding elsewhere.
Edinburgh transport convener Lesley Hinds said the minister’s comments were “not very helpful”.
She said: “We have never asked him or approached him or Transport Scotland about any money. It was interesting he only mentioned Glasgow for investment, not Edinburgh.”
And she suggested the city could look to Europe for possible funding.
She said: “Experience with trams shows that once they’re up and running, in every other city in the world people want more.
“We have asked officials to look at long-term investment in public transport in the city and where funding could be available, including where other cities in Europe have been successful in getting money.”
The European Investment Bank (EIB), the European Union’s long-term lending institution, has helped to fund tram projects, including one in Besancon, a city of around 237,000 people in eastern France, which secured a 70m euro loan.
Manchester was also given a loan from the EIB to help buy trams and London got cash for its Thameslink and Crossrail projects.
SNP group leader and deputy council leader Steve Cardownie said there might be a stage when the council could borrow on the basis of an income it would then get back from the tram.
He said: “I don’t think anyone is entirely satisfied with the route just being from the airport to York Place. The logical extension would be to the foot of the Walk. There is also a case for tram line three out past the university to Edinburgh Royal Infirmary and the BioQuarter.
“Trams are most successful when they go to places where people work.”
The legislation passed by the Scottish Parliament to allow the tram project to go ahead requires any work to start by 2021. But Councillor Cardownie said regardless of the deadline, he would not support any extension unless all the necessary funding was in place.
“We are not going to repeat the mistakes of the past. If the package is not right we should seek further legislation rather than say that’s the deadline.
“We would not support the tram going down Leith Walk until we were entirely satisfied it could work, the people of the city want it and it would wash its face.”
He said Leith Walk was the most financially attractive part of the original route because of the large numbers of people living in the area.
The city’s economy convener, SNP councillor Frank Ross, said that could mean it was easier to make the sums add up for extending the route there.
He said: “Leith is the most densely populated part of the city and car ownership there is the lowest in Edinburgh.
“We have spent £776m on the existing route – that’s a cost we are bearing anyway. If we are going to extend it, how much will that cost? I think you could quickly come up with a business case that would be self-financing.”
The Evening News revealed earlier this week that the council is still collecting financial contributions towards the trams from developers building along the route.
Around £1.5m of a total £7.6m pot is understood to be linked to construction along the stretch from York Place to Newhaven. Council chiefs have given an assurance the money will only be used to build the tramline.
Other cities have secured cash
THE French city of Besancon secured a 70 million euro (£58m) long-term loan on “attractive terms” from the European Investment Bank in 2012. It was to help pay for a 228m euro (£189m) project for the city’s first nine miles of tram line with 31 stations and the acquisition of 19 trams.
The EIB also awarded Manchester a £150m loan in 2012 towards the ongoing expansion of its tram line, including the purchase of 32 tramcars.
London’s Crossrail project got up to £350m towards manufacture and maintenance of 60 new ten-car trains.
And the EIB approved loans of £500m each for infrastructure and rolling stock for Thameslink.
Businesses offered grants to spruce up shopfronts
BUSINESSES blighted by the tram project are to benefit from funding to spruce up their shopfronts.
An interest free ten-year loan is to be made available to business owners as city bosses hope to project a better first impression of the Capital to visitors travelling by tram.
The voluntary scheme is a joint project between the city council and Edinburgh World Heritage.
Heritage chiefs are keen to see the West Maitland Street area given a makeover as it marks the entrance to the World Heritage site.
Grants covering up to 70 per cent of the cost will be available, and repayable after ten years or on the sale or transfer of the property.
It is thought on average that the cost of improving shopfronts will be in the region of £20,000.
The area has been blighted by tram works, with local businesses suffering greatly. One trader, Grant McKeeman, of Copymade claiming to have suffered losses totalling £2000 a week.
He said: “It rankles with a few traders to be asked to make themselves all nice and pretty for the tram now after all we’ve been through.”
A spokesman for Edinburgh World Heritage said: “We have been working with the West Maitland Street shop owners for some time, to develop a project to regenerate this important entry to the World Heritage Site. Plans are still being developed but we hope to be able to announce a final scheme in the near future.”
City transport convener and councillor Lesley Hinds believes the work will create an attractive gateway to the city.
She said: “We’re keen to spruce up the area to make it more attractive and accessible for pedestrians, shoppers and workers. At the moment, we’re consulting the local community council and local businesses to find out what form they would most like the improvement works around the Ghillie Dhu and The Huxley to take.
“Once the designs have been finalised, the work will be carried out as a priority project.”