Trams: Edinburgh to pay for non-existent service

Computer generated image of the St Andrew Square terminus. Picture: Complimentary

Hotel, retail and housing firms which build on sections of the now-axed route from the city centre to Newhaven will pay into a central pot set up to eventually fund another section of the project.

At present, the £776 million line will only run from Edinburgh Airport to York Place – and this latest decision may be seen as a further sign that city leaders are willing to expand the project.

Local authority chiefs said firms should contribute towards the transit system in return for the benefits it will bring them.

Senior council leaders will reveal how they believe traffic congestion in the busiest areas of central Edinburgh will eventually reach a “critical mass”, forcing the issue of an extension.

Councillor Ian Perry, the city’s planning leader, said: “When traffic starts to reach a critical mass, my view is the tram line will have to go down Leith Walk.”

However, a number of firms – including the owners of a proposed hotel at Baxter’s Place on Leith Walk – have successfully appealed the measure since councillors voted to cut the line in half in autumn 2011, and it had been expected the practice would be axed.

It was originally intended that £26.6m would be raised from the private sector for the full route and, with the shorter line, only around £6.9m has been collected to date. In Dublin, a major extension of the tram system is being part-funded by private contributions.

Mr Perry said: “What happened in Dublin is exactly the same as what will happen in Edinburgh. A lot of people were sceptical until they saw the evidence.

“It’s also legitimate for the council then to come in and say [to businesses], ‘If you want the tram serving you, and property prices are going up, then we’re going take a contribution to help’.

“We’re mindful of that and that’s why we’re keeping the contributions going.”

David Leslie, the council’s acting head of planning, said that after considering all the options, it was reasonable to suggest developers who would benefit from tram services be asked to contribute.

He said: “We can’t ask a developer in Haddington to contribute to the route – it has to be reasonable and proportionate. These are the tests we have applied and the conclusion reached is we’ll continue to take contributions along the part of the route where the tram will operate between the airport and York Place.

“We’ll also continue to take contributions from York Place down to Leith and Newhaven because that part of the route has had preparatory work done on it, and there is a reasonable prospect in the short to medium term of potentially going ahead.”

Council leaders are keen not to place a timescale on an any extension to Leith and Newhaven, and they have until 2021 before an Act of Parliament allowing the construction of the line expires.

The city council expects to have to make savings of 95m by 2017 due to a reduction in funding.