(S3O-3473) Edinburgh Trams

29th May 2008

Edinburgh Trams

2. David McLetchie (Edinburgh Pentlands) (Con): To ask the Scottish Executive what discussions it has had recently with the City of Edinburgh Council and tie Ltd regarding the financing of the Edinburgh trams project. (S3O-3473)

The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson):





No recent discussions have taken place with the City of Edinburgh Council regarding the financing of the Edinburgh trams project other than normal discussions concerning the administration of the Scottish Government's £500 million contribution to the project.

David McLetchie: Is the minister aware that the revised estimated cost of phases 1a and 1b of the trams project is now £599 million? The Scottish Government has committed £500 million and the City of Edinburgh Council has committed £45 million, so there is a £54 million shortfall that has still to be funded. Will the minister advise us whether the Scottish National Party run council in Edinburgh is fully committed to meeting that shortfall from its resources and to building both those phases, and whether there have been discussions with the Government or any public agency on how it might be funded?

Stewart Stevenson: As David McLetchie will be aware, we committed to provide £500 million—capped at £500 million; no more than £500 million—for phase 1a. As an incentive to effective financial management, we agreed that, should our contribution to phase 1a need to be less than £500 million the change may be used for phase 1b.

There are a number of conditions to our continued support: that the City of Edinburgh Council accepts full responsibility for the project and any overruns; that the project continues to be affordable; that the cost benefit ratio continues to be above 1; and that there is no on-going subsidy from Government. None of those have changed since our original commitment.

Margaret Smith (Edinburgh West) (LD): There is obviously potential for the business community to play a part in assisting financially. Will the minister agree to work with the council and tie to get funding in place from that direction, not only for phase 1a but for further tram developments in the capital?

Stewart Stevenson: I believe that the business community is very willing to engage, particularly in relation to phase 1b. It will of course be a matter for the City of Edinburgh Council, whose project it is, rather than for the Government. However, if it is felt that we can make a useful contribution to facilitating funding from the business community, we stand ready to assist.