So, what are we to do with the news that the cost of the Edinburgh tram system is now going top £1 billion, by the time it is complete – if it ever is – more than double the starting estimate?

Originally, it was intended to run for twelve miles from Edinburgh Airport to Newhaven via central Edinburgh, including a stretch on Princes Street. The 23 stops on the route were to be served by a fleet of 27 low-floor trams. Now there is doubt that it will do even that.

However, even a truncated scheme will cost £773 million - £273 million more than the budget for the entire project - and the limited service then offered would not be viable. It would need a subsidy of some £4m a year: there is no prospect that the short route would ever make a profit. And scrapping the whole scheme entirely would still end up costing £750 million.

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We are now learning that the high speed rail link to Birmingham is in fact a EU Commission objective, and the government of Mr Cameron has to implement this objective.
I assume this tram line is also part of the EU Commissions objectives and can not be refused.

Brilliant! Isn't this the Nimrod all over again? I'm waiting for someone to claim that for only another £billion or two, the Edinburgh Trams could be completed very quickly and would be a world beater, provided the operating contract was renegotiated and the trams might not actually run as originally promised for a while because the technology is so advanced.

Fortunately I have little need or desire to visit Edinburgh these days. The city is not in the least friendly to day visits from other parts of the country.

Why the folk of Edinburgh tolerate this is beyond my ken. Some moan on MSM websites but nobody as yet has taken to the streets in protest - not even the business folk who have lost vast numbers of customers.

Apathy? The Scots invented it.

There seems to be a great talent in Scotland for financial black holes.
The Edinburgh parliament building came in at TEN TIMES budget, if I remember rightly.
Again I'm relying on memory but wasn't the responsible civil servant Sir Muir Russell
who was sent south in the wake of the Ciimategate emails to tell everybody what upright
citizens the scientists of the Climatic Research Unit were?
A multi-talented chap, obviously.

Being married to a Scottish wife I know that the Caledonian reputation for meanness
is a myth but she is shrewd in managing money. Yet this seems to go " right oot the
windie" when public money is involved.

Perhaps a contributory to the financial shambles might be the sheer cost of the project and the fact that a tramway system might not be the best choice for a 21st century mass transport system.
How much does a tram cost? I have absolutely no idea but I would make an educated guess at the cost of trolley bus.
How about the tramway infrastructure, what should it cost?
Again I have absolutely no idea, But I might guess that the need to dig up all of those miles of roads, plant all of those overhead power lines, confiscate dozens (hundreds?) of miles of perfectly good roads, from car owners, for tramways, and so on, means that the cost is going to be Very High Indeed.
And after all of those Huge Sums are spent, and Edinburgh Trams is working, what happens to the Poor Bloody Citizen, if his city decides to grow out past the end of the line?
Does the line get extended?
Don’t be silly! Where’s the money coming from?
Now, on the other hand, consider a trolley bus. As mentioned before, we can have a good idea of the cost of a trolley bus. We’d still need the power lines.
That’s it.
And when the city grows past the end of the line, we just add a few hybrid buses, which can run as all hybrids do, away from the overhead lines, for the short distance to the new estate, and back into the powerline system.
Which system gives a better, cheaper service to the citizens?
I would guess the trolleybus wins hands down.
Trolley buses, you say? Trolley buses? They’ve been obsolete for a couple of generations.
Well yes, and so were trams until made fashionable by Major European Cities, which all have trams now, and are all heavily in debt over the construction.
And none of them can be easily extended if their city expands past limits.
Why do councils not think about these things?
Why don’t rate payers think about these things before the event?
By the way, don’t the trams look lovely.
Much prettier than ugly old trolley buses!

Very interesting post Richard.

I live and work in Edinburgh and I am very aware of the tram works and the nonsense that has gone on. I have not spoken to a single person who thought or thinks that the trams are a good idea. The bus service here is fabulous although the fares have gone up beyond inflation because... it's a way of getting more money for building the tramways etc.

The decision to go ahead was taken in a serious hurry to ensure it went through. Everyone knew it would be a shambles. They told us it would not bring much in the way of disruption. I was in Nice when they were building their trams system. I'd seen what to expect and lo it came to pass that things became a shambles and the where do I actually drive through the cone forest became the norm.

Now we have a hiatus. Mr Tramline layer has messed up. The rails along Princes Street are rubbish and Mr Tramline layer is re-doing them FOC. Like that's helpful?

No one knows the sums. No one actually knows how much it will cost. The sums of money you featured are the politicians. The comment from the Tramline layer chaps when they heard the amounts was "these figures are not what we recognise from our discussions.

Edinburgh people do not want the trams and want things to stop. The politicians want them. Simple solution. They can have them if they pay for them themselves.

If you make it to Edinburgh ask a taxi driver for the facts about the trams. They know. They have the answers. Vote taxi driver!!!!!

WTF happened to 'contracts'? You know, those 'carved in stone' agreements to provide x for a cost of £y and, if the builders run over-budget, it comes out of THEIR pocket. That's what a contract is for. The muppet who drafted the tram contract should be slaughtered.

Projects involving public finance should be controlled by people with a vested interest - ideally, management who actually put up their own collateral for a significant remuneration (and bonus if they come in on time and under budget) but penalised by loss of their own collateral if they screw up. Carrot and stick.

For the £1bn this tram service is going to cost they could take passengers by TAXI, free-of-charge, to and from Edinburgh airport from now until cars are obsolete. A total and utter farce. Again.

The Scottish Parliament building, which cost roughly TEN times what was estimated - from £47 million to £470 million. Good work by Donald Dewar

" unfortunately buying return tickets"

Richard,

Oof; anyone reading that would be assured that you didn't really approve of those who are " the lifeblood of the organisation"!

'Buyin' from Ryan' or 'Eazy with Sleazy' were the competing airlines, one supposes.

The Edinburgh tram failure is indicative of a big failing within Britain , not just Scotland - the pointers are ; consultants .
Go to any business seminar and if it has fifty attending , only about two will be wanting to manufacture , a quarter odd will be in business of sorts ;web design , restaurants , retailing .
Then there will be a tranche of consultants , together with a hodge podge of charities , NGOs ,local "enterprise" schemes and other state organisations . Sometimes its on courses for Government Grants , EU grants etc . Which seems even worse than an economy based on taking in each others washing .
Did you see the Times conference about business in Britain and its leading article ? So depressing is its pretentiosness Id rather watch my house fall down .
When we really get business minded in Britain then deficit or no deficit now , well do well .

Yeah......... at least drugs central North has got summat to show.......in Leeds, they've been talking about a new tram system, ever since they got rid of the 'old' trams in the late 50's.

I once worked for a Company with a significant manufacturing base in Scotland (their first outside the US but alas no more in Scotland) and had many dealings with Edinburgh council with regard to buses during the 90's. It was hard work as facts and figure seemed to be the least of their worries. The tram as others have mentioned above is not the correct response to modern-day transport needs. It is just the romantic notion in the minds of empty headed politicians that we did it better in the past so it must be the correct response today. I was also struck how every council bus company (and those newly privatised) was full of “fleet engineers” and “Engineering Directors” who thought they could do better on the back of a fag packet than all our research engineers backed by many millions in research in what is still a very competitive business despite the best efforts of regulators to destroy it..

They are also completely misguided by all manner of consultants who push rail as being cheaper to operate (these consultants get more money out of said projects) than other forms of transport; ignoring the fact the huge infrastructure costs can never make a return, namely because they cannot be shared. Even the case for electrification of the rail only ever compares direct operating costs of the rolling stock, ignoring the cost of generating the electricity and its transmission and losses, and ignoring technological advances with diesel engines that make them zero emission compliant (ignoring CO2 which is not a harmful emission) and very fuel efficient, with much more to come, provided we can stop the insane arbitrary number reductions that are now applied at regular intervals to the all but zero emissions. What was once good policy in the 70’s and 80’s needs to be revised.

By the way, it could have been just a throw away comment, but I was engaged in a late night conversation with several people one of whom I suspect had been working for an MP. We were on opposite sides of a conversation about the EU, regulation, climate change high taxes, you know the usual stuff and I cited the high speed rail link as an example of a project that was being pushed not because there was a pressing need from UK businesses or UK residents likely to use the service, but because the EU had it as part of its strategic transport plan and that it would contribute nothing but huge costs to the UK at a time when we should be cutting spending and not pretending too. The comment was “it’s probably not going to be built now anyway”

The reason I mention it as the said person looked as if they had just spoken out of turn, and immediately change the subject to prevent me from asking them to qualify it. Although a few drinks had been had I just had enough presence of mind not to dive in in my usual manner and hoped for another slip. The thing that hit home was reminding the group that it was the EU driving many of our costs and contributing zero to growth in our economy.

It's as simple as a large amount of other people's money being up for grabs, and certain folks cannot help but take their share. Maybe we all would, given half a chance. But so many of our problems come down to that one thing. Defence procurement, Edinburgh trams, HS2 rail, the forthcoming Olympic disaster, climate change, renewable energy, the whole damn lot are as they are because money sticks to those who are connected. Planners, contractors, consultants, charities, NGOs, it is in none of their interests to do things for less, or leave any source of funding untapped. Did I miss FIFA? Same thing.

I am looking for a concise aphorism to explain the above phenomenon. Original or not, doesn't matter. Suggestions gratefully received.

Regards the cost issue - a googling brought me to this page which is a lengthy timeline of events, figures and stories.

Included in that is a claim that the published costs of the project were before inflation had been factored in. This has a superficial ring of truth about it.

Cost escalations seem to be the one guaranteed thing with major projects - carriers, the Olympics and much else. Few public sector things seem to be on budget and on time without first changing the budget and time limit. That they may have not accounted for inflation is an interesting idea but I think it is a red herring - they didn't know what it would cost, agreed a horrendous contract, kicked it into the long grass to let if fester and have found an excuse for their incompetence. Inflation cannot surely be that high.