Council to borrow £231m for Edinburgh trams project
Edinburgh City Council will have to borrow £231m to pay for the capital's controversial tram project.
A report just published by the local authority warns repayments will cost £15.4m a year over the next 30 years.
Added to the original £545m budget for the project, it will take the full cost of the through the £1bn barrier.
Total repayments over the life of the loan will come to £459m of which £228m is interest.
The scheme has so far suffered from a contractual dispute, leaving it over budget and behind schedule.
Management of the project has now been passed to a new company, Turner and Townsend, which was brought in by the city council to help it complete the tram line into the city centre.
Staff at TIE, which had been running the project, have been told they face further redundancies.'Extra cost'
Gordon Mackenzie, Edinburgh City Council's transport convener, said "It is important that we get a clear decision from council to provide certainty for residents, businesses and to fulfil our contractual obligations.
"Despite the extra cost, the current council have a strong record of balancing the budget while improving services and I am confident that will continue.
"The significance of the tram to the city's future economy is often overlooked because of the problems we have experienced, but Edinburgh needs the council to make decisions that look to the long term, not just the next election, and that means going to St Andrew Square in the first phase."
Dave Anderson, Edinburgh City Council's director of city development, said that work during the summer had enabled "key project risks to be mitigated" and would give the council a "solid platform from which to make the important decisions on funding and the commercial settlement".
A contractual dispute had pushed the project over budget and behind schedule.