Developing the demand forecasts and business case for Edinburgh Tram

Steer has led the provision of demand forecasting, operational and business case advice to the City of Edinburgh Council (CEC) for the development of Edinburgh Tram since 2005. The concept of the Edinburgh Tram network was developed by CEC to improve transport capacity and accessibility, and to support the development of the city’s economic development and spatial strategy. 

The first Phase of Edinburgh Tram, from Edinburgh Airport to the City Centre, opened in May 2014, and has been highly successful in achieving forecast passenger growth and being the highest rated for passenger satisfaction among UK tram schemes. Steer is currently supporting CEC in preparing the Full Business Case for a planned extension to Newhaven via Leith. 

For the line from the airport to the city centre, our advice includes:

• Preparing the original STAG (Scottish Transport Appraisal Guidance) scheme appraisals in 2006, which formed the basis for the funding approvals and granting of powers for the project in 2007.
• Ongoing demand forecasting, revenue and revenue risk and operational advice through the design and development phase of the project (2007-10).
• A full reappraisal of scheme options in 2011, following cost, programme and contractual issues. Our appraisal (alongside affordability considerations) formed the basis for the approval of the scheme that was subsequently implemented. 
• Ongoing advice on operational and fares strategy advice between 2011 and scheme opening in 2014. Upon opening and since, the forecasts have been in line with those forecast by Steer.
• Operational analysis and advice to assess the potential to deliver faster journey times on the existing system. This resulted in the phased implementation of a range of measures that, in combination, have resulted in the reduction in journey times from over 40 minutes to around 36 minutes and resulted in increases in patronage.
• The development, in 2018, of a bespoke airport demand forecasting model to support the full business case for the tram completion project.

For the proposed extension to Newhaven via Leith, our advice covers:

• An Options Assessment Study (2015) which considered four route options serving the Leith / Newhaven corridor. This identified the route to Newhaven as the best performing in strategic and economic terms. This option was taken forward by CEC.
• The preparation of the outline business case in 2017.
• The preparation of a full business case published in 2019.
• The provision of evidence and response to member questions at the CEC Transport and Environment Scrutiny Committee into the FBC.

At each of the stages above, Steer has worked closely and collaboratively with CEC, Edinburgh Trams, Lothian Bus and other consultants. Our role leading the business case requires Steer to coordinate inputs and assumptions across several parties, to ensure full consistency across financial, service and operational elements of the case.  We have regularly updated the models and appraisal framework.    

Successes and outcomes

We successfully supported CEC in developing the business case for the tram network and provided demand and revenue forecasts for the existing line which closely reflect those that have been achieved.

Our work on developing the demand forecasts and business case supported the approval of the extension to Newhaven in March 2019.

We have provided specialist advice across a range of areas, and we have provided evidence to the Parliamentary STAG Inquiry, presented at a CEC Scrutiny Committees and present at Full Council Meeting, as expert technical advisors.

The £207m tram extension from Edinburgh city centre to Newhaven was approved by full council in March 2019.