Edinburgh Trams - Taking the Tram to Bankruptcy?
Information has at last been released by Edinburgh City Council admitting that the tram project is going to run at an operating loss for the next fifteen years - which is a fact that the critics of the project have long stated, only to have this vehemently denied up to now by Council Officials and by those in charge of the last administration.
However, we are now told that there is need for a "start up loan" of some £3 million - and as this clearly seems to the public to be yet another new cost which has been hidden, we are entitled to ask why this not included in the overall project cost? Presumably the "start up loan" is required because the so called "tram" is actually a light rail project, so stricter introduction safety checks are necessary.
The forecast now given by the Council for receipts is some £51 million with payments for maintenance and refurbishment running at £85 million. Therefore it is going to be up to Lothian Buses to cover the difference of £34 million which theoretically wipes out the Lothian Buses profit of £33 million, although it appears that the Council are subsidising the tram from other budgets so that they are able to claim somehow that this leaves them with a nominal profit of £5 million for the bus operation.
The 'smoke and mirrors' that the Council are employing to try and defend the cost of the tram project and the viability of Lothian Buses is truly ingenious! The costs of the additional money - some £231 million - which the Council has had to borrow, will be a mill stone round the necks of the Council and those who pay Council Tax for years to come.
What is really interesting is that the Council officials seem able to so clearly forecast the revenue for the tram when it has not even started to operate. Apart from a few rugby matches there will be few occasions when it will run at anything like full capacity and the city seems to be faced with an empty tram simply blocking the roads and totally snarling up the city transport system.
In line with every aspect of this shameful project the forecasts by the Council officials are hopelessly optimistic, just as their 'business case' for the project has been proved to be totally inadequate and plain wrong. In addition one wonders what damage will be done to Lothian Buses who will have to keep covering the deficit year on year. Their investment in eco-buses is bound to suffer as the money will simply not be there.
Edinburgh Council Tax payers are watching the financial crisis deepen with some concern as they see every Council budget being raided to try and pay for the tram project. There is an urgent need for a Public Inquiry before many of those responsible have retired from the scene with fat pensions, so we should be pressing our MSPs to force the Scottish Government to get things moving and hold an inquiry forthwith. The First Minister promised to be open and transparent in government and a Public Inquiry now would demonstrate this very principle.