Edinburgh City Council has voted in favour of extending its tram line by 2.8 miles (4.6km) from the city centre to Newhaven at a cost of up to £207million.
Construction should be completed by the end of 2022 so that services can begin in early 2023.
The extension will be funded by borrowing against future tram revenues, plus a £20m dividend from the city’s public bus firm Lothian Buses.
Edinburgh City Council’s transport convenor Lesley Macinnes said: “Taking trams to Newhaven will allow brownfield development sites to be transformed, opening up the whole of north Edinburgh to a wealth of opportunities in terms of jobs, housing and local facilities.
“I firmly believe the tram project is in the best interests of the city’s current and future residents and, as an administration, we will do everything in our power to make sure it’s delivered on time and on budget.”
The extension was initially costed at £165m, but the final business case puts it at £207m, including a contingency fund.
The increase has alarmed some as it is reminiscent of the cost rises experienced during construction of the current line from the airport to the city centre, which opened five years late in 2014 and at more than double the original budget of £375m.
The council says it has learned lessons from that first phase and the new construction will be planned using a ‘one-dig’ approach, closing each work site once and only reopening them again after the works there are fully completed.
The new line is expected to generate 16 million journeys in its first year, roughly doubling the current number of passengers.
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