Decision not to award �72m comes after Edinburgh council voted not to build tram line as far as city centre
Scottish ministers are trying to force Edinburgh councillors to reverse a dramatic decision to stop building a new tram line before it reaches the city centre.
In a blunt ultimatum, the city has been warned that Transport Scotland will withhold an outstanding grant of �72m towards the crisis-hit scheme unless it resurrects its plans to build the new line through the city centre at a total cost of up to �1bn.
The Scottish cabinet decided on Tuesday that it could not support last Thursday's decision, forced through in a revolt by Labour and Tory councillors, to stop the line at Haymarket, two miles short of the planned terminus in the city centre.
The move is a deliberate act of brinksmanship by ministers in advance of an emergency council meeting this Friday, called by the city's lord provost, George Grubb, in a last attempt to rescue the project.
The tram line was originally due to cost less than �545m and run from the airport to Newhaven, on the city's coast. That included �500m of government funding through Transport Scotland, of which �72m is yet to be paid.
Its costs have almost doubled because of a series of bitter and lengthy disputes between the city and its engineering contractors, cost overruns from unexpected obstacles along the route, including gas and water mains, design errors and now the extra cost of borrowing.
John Swinney, the Scottish finance secretary, said the decision to stop the line at Haymarket "takes the project far, far away from the original concept that ministers committed funding towards, that we're not prepared to make that money available".
"It's time for the council to think long and hard about where it's going with this project," he added. "What's clear is the government will not be funding a project that just goes to Haymarket. It is now down to the council to come forward with new proposals which will be considered on their merits."
Thursday's vote caused furious recriminations in the city. It split the council's ruling Liberal Democrat and Scottish National party coalition after the SNP abstained, leading to a defeat for the Lib Dems by Labour and the Tories.
The opposition parties said the additional �230m needed to build the line to the centre would saddle the city with an unacceptable level of extra debt for another 30 years and push the overall cost of the nine-mile line to �1bn.
It has since emerged that stopping the line at Haymarket would cost a further �30m to build a new terminus and turning circle, and would lose money on running costs. There have been calls for the project to be scrapped altogether.
Swinney's ultimatum was welcomed by the Scottish Liberal Democrat leader, Willie Rennie, because it gave his beleaguered colleagues on Edinburgh council a much stronger case to build the longer line to St Andrew's Square in the city centre.
The warning from Swinney may also force SNP councillors to vote in favour of the scheme. The SNP has opposed the project from the start and believes a city-wide referendum should be held on its future.
Rennie said: "The Scottish government decision to reject the Haymarket option is the right call. Sense seems to be breaking out all round. I hope all parties on the council will now back the profitable St Andrew's Square scheme."
But Andrew Burns, the leader of the council's Labour group, said: "This situation is lurching between chaos and farce, and [this] announcement risks making matter even worse. At the very time the Scottish government needs to be constructive, they have decided to try and sabotage the whole project.
"John Swinney could have averted the present crisis by ordering his SNP councillors to do what he is now demanding. Instead we have the ludicrous situation of an SNP government doing one thing and an SNP council doing another, but both doing it incompetently."
Source: http://www.guardian.co.uk/uk/2011/aug/30/scottish-government-edinburgh-tram-funding
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