CONCERNS have been raised about the long-term viability of Edinburgh’s controversial tram extension – dependent on future ticket sales in a post-Covid world that is likely to see a large proportion continue to work from home.
Edinburgh City Council has decided to press ahead with its £207 million project to extend the tram network to Newhaven in the north of the city – after officials warned that an immediate cancellation of the infrastructure would cost £32 million from the authority’s already-depleted reserves and would cost more than half of the total budget.
The extension is still expected to be delivered within its £207 million budget when it opens to passengers in the first quarter of 2023.
But fears have been raised over the ability to pay back borrowing costs – with the financial success dependent on growing the number of passengers that use Edinburgh’s tram when it is expected many commuters will continue to log on from home once the Covid-19 crisis has been resolved.
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The Welsh Government expects one third of its workforce to continue working from home – and Nicola Sturgeon yesterday said she would agree with the “broad sense” of that estimate.
Council officials have drawn up different situations it could find itself in, but the worst-case scenario only caters for a 20 per cent drop in passengers and insists 2019 levels will return by 2030 – and this would require the authority’s reserves to be further drained to cover the costs.
A report commissioned by the council warns that “there is clearly uncertainty about whether Covid-19 transport demanded responses are temporary, have accelerated existing trends or will fundamentally change the nature and location of economic activity”.
Conservative councillors who opposed the project being approved, pointing to too much risk involved, believe the worst-case scenario for tram passengers dropping is “far too optimistic”.
Leader of the Edinburgh Conservative group, Iain Whyte, added: “We said that taking forward this tram project on the basis of risky future fare revenues paying back the loan was a huge risk that wasn’t sustainable.
“They don’t take account of people working from home in the future – maybe only going to the office a couple of days a week instead of five, maybe no-one travelling to the airport because business travel won’t be happening anymore even when the pandemic is over because employers will say ‘why should I send someone to London when they can do it over Zoom or Teams’.
READ MORE: Plea to keep home working and cut air pollution
“It’s not baked into these figures.”
Nick Cook, who was the Tories’ transport spokesperson on the council when the final business case was approved in March 2019, added that “it was all based on far too many rosy assumptions”.
The First Minister expects some Scots to continue working from home once the Covid-19 restrictions have been eased permanently – potentially bad news for the viability of mass transit systems.
Ms Sturgeon stressed that “it is unlikely and possibly undesirable that we come out of this pandemic and just go back to normal”.
She added: “There’s a lot of things around the inequalities of life, around some of the working pattens that perhaps contribute to those inequalities that we shouldn’t just allow to drift back to normal if we can avoid it.
“Having been through something as traumatic as this pandemic has been on all sorts of different levels, as disruptive as it has been, I think for a whole variety of reasons, we shouldn’t necessarily just allow ourselves on everything to go back to normal.
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“That will have implications for other things – public transport, city and town centres, for example, and that all has to be part of our thinking in the period ahead.”
The council has insisted that the benefits of completing and opening the tram system will be significant – not only helping to restart the city’s economy as the pandemic ends, but also Edinburgh and Scotland’s ambition to become carbon neutral and potentially unlocking further extensions to public transport.
Edinburgh’s transport convener, Lesley Macinnes, said: “We’ve, of course, experienced an inevitably unsettling year, and along with everyone else, continue to face some uncertainty, as we work to emerge from the pandemic. This has naturally had an impact on major projects like Trams to Newhaven, but I’m extremely encouraged that an updated, comprehensive final business case demonstrates its completion will still deliver a positive economic benefit in a range of scenarios.
“In any case, this project will have an unparalleled effect on the environment, the local economy and in opening up development and employment opportunities in this part of the city. With a rapidly growing population and a commitment to drive down carbon emissions and air pollution, this is exactly the kind of scheme we must be investing in, to provide clean, sustainable, high-capacity transport.”
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