NEWS: Buses To Subsidise Trams For Four Years

MARK McLAUGHLIN and CHRIS MARSHALL
Evening News (Edinburgh)
October 8, 2010, Friday

BUSES will have to subsidise an unfinished tram line for up to four years, tram bosses said today.

Despite fears about the economic viability of the trams project, a new business case has concluded that the incremental delivery of the line, starting with the section from the airport to St Andrew Square, will be profitable from day one.

However, that business case relies on the Capital's bus service shouldering most of the burden for three to four years when present operator Lothian Buses is amalgamated into the new bus and tram operator Transport Edinburgh Limited [TEL]. The bus to trams subsidy is thought to run to many millions of pounds a year.

It was previously reported that a line running only as far as Haymarket would need to be subsidised, but the new business case says a line reaching St Andrew Square would be viable.

The report does not say when TEL expects to complete the whole of line 1A to Ocean Terminal.

The News has seen details of the new report, which will be discussed by councillors next Thursday.

Lothian Buses made an operating profit of £9.29 million last year, after making the first loss in the company's history of £801,000 in 2008.

One source said it was unacceptable to expect Lothian Buses to prop up the ailing tram service.

The source said: "Spending public money on the trams is one thing, but sacrificing an excellent bus service is too far.

"To jeopardise the bus service across the city to build half a tram line defies any measure of common sense."

The report also confirms integrating the buses and trams has already begun, with the head of the tram project being controversially "parachuted" into the top job.

Richard Jeffrey, chief executive of tram firm TIE, has been handed the same designated position at TEL.

Ian Craig, managing director of Lothian Buses, has been given the position of TEL's chief operating officer.

There is anger that the positions have not been advertised and councillors could try to block the appointments.

One source said the appointments brought closer the possibility that tram bosses could use Lothian Buses to finance the beleaguered project.

A spokesman for TIE said: "The appointment of Richard Jeffrey and Ian Craig has been made based on the expertise these individuals will bring."