THE ASSOCIATION OF BRITISH DRIVERS
IN SCOTLAND
A REPORT ON THE EDINBURGH TRAM PROPOSALS
By Bruce Young
Edinburgh has attracted a lot of attention as the next city to impose a congestion charge. It will take the form of a charge for entering either of two cordons, an inner cordon which will apply to those entering the city centre throughout the working day, and an outer cordon at the city by-pass which will apply to peak periods only.
Congestion is increasingly being deliberately increased by the narrowing of major roads, often to a single lane, closure of residential roads and introduction of bus lanes even where there was previously no congestion. One hopes that, on the introduction of congestion charging, the Council intends to remove these restrictions but its anti-car stance is so ingrained that that is open to doubt.
Although transport improvements have been promised to reduce congestion, it is intended that these will be financed by the congestion charge, so there can be no intention of an early alternative to car commuting. Only one park and ride car park is currently under planning, at Ingliston, beside the airport and the western boundary of the City. There are currently no plans under way for such parks on any of the other major approach routes into Edinburgh although more buses have been promised to tempt motorists from their cars and further park and ride schemes have been mentioned although not yet at planning stage (at February 2004).
The object is clearly to generate revenue despite Ken Livingston’s recent warning not to do it for the money.
Early in the discussion period, a concession was granted, exempting Edinburgh council taxpayers who live outside the outer cordon and who would otherwise have to pay to enter Edinburgh to work each day. A further concession then limited the outer cordon to the morning “rush hour” otherwise in the evening the outer cordon would charge Edinburgh residents returning home from work outside the city’s outer cordon. These concessions angered all three neighbouring local authorities which house large numbers of Edinburgh commuters, resulting in their instructing advocates (barristers) to pursue their objection to the scheme on the basis that it is a thinly disguised tax on those Edinburgh workers who live outside the city boundaries.
Objections were also received from the police, ambulance service, NHS, major stores (including Harvey Nichols, John Lewis and Jenners, Edinburgh’s local “Harrods”), minor stores which are members of a local trade association and Edinburgh City Council’s own social work department. Even Standard Life, which employs 7,000 staff in the city centre, objected on the grounds of the cost to their staff.
Nevertheless, Edinburgh City Council is continuing with the plan despite this opposition and it is clear that the force majeur prompting this denial of electoral pressure is the tram project which Edinburgh is currently pursuing through the Scottish Parliament which had provisionally granted £375 million to the project.
Although it had been claimed from the outset that the tram project forms the basis of an integrated transport network for Edinburgh, it was only early in 2004 that Professor Barry Hutton of Napier University, who was an outspoken critic of the project, was commissioned by Edinburgh City Council to develop a plan to be put to the Council for an alternative scheme that would survey the whole of the city transport needs. This suggests that such a survey had not until then been made.
The project concerns three Lines, although only the first two have so far been presented to Parliament for approval. The first, Line One, will run north in a loop from Princes Street to Granton and Leith, Line Two will run west to the airport and city boundary and Line Three south east to the new PPI Edinburgh Royal Infirmary and the boundary.
At face value, this seems to cover a broad swathe of the city but closer scrutiny shows how limited that view is.
Line One was proposed by Waterfront Edinburgh Ltd (WEL), a development company which is jointly owned by Edinburgh City Council and Scottish Enterprise and which intends to redevelop the large and derelict dockland area of Granton. Forth Ports (Properties), the redevelopers of the largely redundant Leith Docks, then suggested extension of the track into a loop to Leith. The project reflects the inadequate existing road system in the dockland area but, despite the large Waterfront developments which will be sold with a car park space for each home, there are currently no plans for major improvements to the existing local road network. The additional traffic will therefore increase road congestion in the north of Edinburgh.
Edinburgh City Council has a policy of not building any additional roads on the grounds that these would encourage more car journeys to be made. Nevertheless, it would be vastly cheaper to upgrade the road network, although less grandiose.
Line One is more dependent on that property development than on the existing transport needs or wants of the City, as it will mainly serve the Granton and Leith redevelopment areas, with relatively few stops along the route (about one in every three of the existing bus stops on the route). It bypasses the Western General Hospital which was deliberately developed with very restricted parking facilities, BAE Systems and Telford College, which all have substantial numbers of people passing through daily, nor does it pass the Sainsbury Craigleith superstore although it will pass in the general neighbourhood of all of these. So it would appear that local transport needs are not to be met and the argument of “social inclusion”, which the City Council advocates, also fails.
Similarly, Tram Line Two is intended to link the city centre with the airport and major business developments to the West of the city, with few benefits to residents on the route. It will run alongside existing railway lines and a rail link direct to the airport is already under development, eliminating the need for a tramway service.
Both Lines have prompted local residents to form lobby groups and, as both will run through high value housing, both areas have very able activists, including local authority specialist lawyers.
Line Three, which is intended to follow the other two, will go to the southeast of the city, stopping at the new Royal Infirmary, a recently opened PPI venture which has been heavily criticised on grounds of poor accessibility and expensive parking.
Locally, current thinking is that the tram system will not proceed beyond Line One, serving the Council sponsored housing development. Opposition to Line Two and the planned rail link will obviate the need for Line Two and funding for Line Three will never materialise. If Line One is built, it is likely to become a white elephant which will absorb the funding provided for Line Two.
The £375 million funding provisionally agreed by the Scottish Executive is not index linked and, with construction inflation at 10% to 15% per annum, it is fast losing value. The City Council claims that Lines One (north) and Two (west) will be financed by this Scottish Executive grant and that Line Three (southeast) will more probably be funded by congestion charge income, although the congestion charge has not yet been approved.
Costings produced to the City Council on 11th December, 2003 show a total cost for Line One of £243.05 million but this figure was after “future cash flows have been discounted using standard HM Treasury methodology to provide net present values as at (summer) 2003”. This seems nonsensical when the grant by Scottish Executive is not index linked and locally construction inflation is running at 10% to 15% per annum. So the estimated costs to be incurred over a 41 month construction period up to launch of the system in 2009 have been discounted to their equivalent value at summer 2003 using an undeclared discount factor yet the funding grant (if finally approved) is fixed at £375 million and is presumably intended to be drawn down in stages over the construction period. If construction cost inflation runs at 10% per annum, the likely cost of Line One could be in the order of £331.6 million.
Similarly, Line Two, which has a discounted value of £230.4 million would cost in the region of £353 million, an overspend on the declared cost of both lines of £211 million.
Even these discounted costs omitted the cost of improvements to the cityscape, now estimated at £62 million.
Current regulations require that an optimism bias (contingencies provision) of 31% of the total project cost must be fully funded prior to the start of construction. The figures produced to the City Council included a contingency of about 10% of the discounted costs but not the full optimism bias.
The UK has poor financial experience of tramway projects. According to the HM Treasury report which led to the introduction of optimism bias, of all public construction projects, light rail projects were the worst offenders when it came to cost overruns, with an average overrun of 140%, so 31% seems unduly modest!
Accepting that the business case has not yet been completed, it may well be that the full provision will be added in later but, hopefully, before presentation to the Scottish Parliament.
Recognising that they are running a project that threatens to bankrupt the city, the Council now proposes to charge developers a “tram levy” for developments close to the tramlines as was reported in an Edinburgh Evening News article.
In another article in the Edinburgh Evening News an executive of the tram company which has developed a tram system for Nottingham was ebullient about his project, saying that the key is good public communication. Edinburgh could learn from his example. It is developing a reputation for avoidance of issues and passes queries from the Council to Transport Initiatives Edinburgh (n.b. often referred to as "TIE"), the council-owned company charged with management of the city’s transport initiatives, and from them to Weber Shandwick, a PR agency who provide as bland as possible a response. The following correspondence has been entered into with the Council and it shows clearly the manner in which correspondence is dealt with. Please CLICK HERE.
Operating costs are likely to be onerous. No funded tramway in the UK runs even at breakeven costs. Edinburgh’s Line One does not meet local needs and Line Two will duplicate an existing rail link development, so it is less likely than average that Edinburgh’s tram services will pay their way.
Overall, then, Edinburgh City Council, despite objections and legal challenge, has embarked on a congestion charge which will be little more than a tax on commuters, in order to finance a tramway service which is designed to benefit only development companies, which is not required by the electorate as a whole and which is likely to develop into a major burden on the local taxpayers.
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