Moving ahead with a new operating agreement for Edinburgh Trams
A long-planned transfer of responsibility for maintaining tram infrastructure from the City of Edinburgh Council to Edinburgh Trams Ltd is set to be confirmed by councillors next week.
Under the current arrangements, which were agreed by Council in August 2013, Edinburgh Trams are responsible for operating tram services, while the Council is responsible for maintaining the tram vehicles and infrastructure.
The current operating agreement contains a provision for maintenance to be transferred to Edinburgh Trams and a new version of the operating agreement - which will be considered by the Transport and Environment Committee on 6 December - would see Edinburgh Trams take on all operational costs for running trams with immediate effect.
Under the new arrangements, which have already been approved by both the Tram and Transport for Edinburgh Boards, Edinburgh Trams would be able to improve value for money by directly managing contracts for vehicles, infrastructure and systems.
If councillors approve the report, Edinburgh Trams will be obliged to pay the Council an £8.5m annual asset fee for use of the tram infrastructure, This would result in Edinburgh Trams moving from a profitable to a loss-making company in the near term.
Councillor Lesley Macinnes, Transport Convener, said: "It's a reflection of how well Edinburgh Trams is performing as a company that we feel they are now ready to take on the responsibility for maintenance costs - as was always the plan when the current arrangements were agreed. Their continued growth in passenger numbers, improved service frequency and excellent and indeed award-winning customer service point to their readiness for this transfer of responsibility."
Lea Harrison, Managing Director of Edinburgh Trams added: "In less than five years of passenger service, we have proven ourselves as a competent operator of the tramway by returning an operating profit through sustained increases in patronage, revenue and customer satisfaction.
"The proposal to add additional responsibility to the agreement is recognition of our efforts and demonstrates the Council’s belief in our organisational maturity and our ability to make cost savings for the city."