Merseytram awaits city council funding verdict

The future of Merseytram remains in the balance this week as Liverpool City Council meets to decide whether to provide contingency funding should the project go over budget.

The deadline for ordering carriages officially passed at the end of October but has been extended by four days. This is to allow time for Liverpool City Council's executive board to consider a legal, technical and financial report.

Last week Knowsley Council agreed to underwrite a contingency sum of up to £25 million, saying that the project is vital for Merseyside's regeneration.

But transport minister Derek Twigg has written to scheme promoter Merseytravel pointing out that both councils must agree to pay all future cost rises, not just the £25 million under discussion.

A Department for Transport (DfT) spokeswoman said: "This has been the government's position for a long time. There is £170 million on the table if the tram can be delivered for this sum. The councils' approach to discuss the £25 million is not heading in the right direction."

A Merseytravel spokesman said it has written to the DfT to say that it is confident of meeting all the funding requirements with its partners at Liverpool and Knowsley. Liverpool will seek clarification on precisely what it will need to underwrite.

Meanwhile, business leaders in Leeds have urged employers to lobby the government for a decision on the city's Supertram. A Leeds Chamber of Commerce spokesman said businesses are concerned that economic growth in the city would be constrained without the tram scheme.

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