Infrastructure Costs: Trams

Building trams in Britain costs more than twice as much as it does in the rest of Europe

Over the last three decades, trams have made a remarkable comeback across Europe. Cities that had torn up their tracks in the 1950s to make space for cars and buses realised they had made a mistake. Since the turn of the century, 21 French cities have built new tram systems, while in Germany, 60 cities now have a tram.

Britain, by contrast, isn’t doing so well. While there have been some tram successes, most notably Manchester’s Metrolink, the UK drastically lags other European countries when it comes to mass transit in our cities. In fact, compared to other Western countries, Britain’s large cities are the least likely to have a tram, metro, or light rail. Even car-centric America beats us.

Why have cities like Lyon, Helsinki, and Madrid been able to build tram systems while Cardiff, Bristol, and Belfast haven’t? And why is Leeds the largest city in Europe without mass transit?

It is impossible to answer these questions without considering one factor: cost.

It costs more to build new tram networks in Britain than it does almost anywhere else in the word. Birmingham’s Eastside Extension is a 1.05 mile addition to the city’s tram network that will run to the future HS2 station at Curzon street. Barring any further price rises, it will cost £245m, just a little less than the £260m Besançon spent on its entire nine mile network. 

High costs are driven by a number of factors. British projects are bogged down by excessively long planning processes, regulations that lead to moving almost all of the buried utilities at the expense of the project, and a lack of shared standards that limits the sharing of cost-saving lessons. Centralised funding undermines the incentive to make cost-saving tradeoffs (e.g. simpler station designs or more basic trams) as the costs are borne by the Treasury not the tram promoter. This latter point often means that trams are seen as a catalyst to do large urban realm improvements, at the expense of the tram project. 

To determine the extent of Britain’s cost problem, Britain Remade looked at 100 different tram projects built this century across 18 different countries (data here), as part of our recent Back on Track report with Create Streets. The database covers all of Britain’s completed projects within this period that have reliable cost data and contains projects from Europe, Japan, America, Canada, and Australia. 

The results do not reflect well on Britain. 

Germany and Finland come out the best, building a mile of tramway for £24m and £28m on average, respectively. If you exclude Britain, Europe’s average is a little higher at £42m per mile. 

At £87m per mile, British tram projects cost more than twice as much as the average for the rest of Europe. Only Canada, Ireland, and Australia are more expensive than the UK. 

Of the ten most expensive tram projects per mile in the world, five of them are British. Only one British project, out of a total of 12, Nottingham’s first phase, cost less than the global average.

The recent history of attempts to build trams in British cities is littered with promising schemes that were either cut back or scrapped altogether due to high costs. The Supertram in Leeds was dropped in 2005 after costs spiralled and £40m had already been spent on the project. Bristol, Hampshire, and Liverpool have all seen tram projects cancelled because of high costs.

Edinburgh’s tramway was described as “hell on wheels” by its former chairman and cost £1.06bn (adjusted for inflation). Cost overruns meant that the original plan for 20 miles of tramway for £375m (£629m in 2024) was cut back to only 8.7 miles. In comparison, Cadiz in the south of Spain was able to build its first tram line, also 8.7 miles, for only £248m, less than a quarter of Edinburgh’s cost. 

High construction costs make it harder for the UK to build the tramlines that we need. In our database, Britain has built 71 miles of tramway at an inflation-adjusted cost of £6.15bn. If Britain could build as cost-effectively as the European average, Britain would have an extra 75 miles of tramway without spending a penny more. At German costs, Britain could have built 181 miles more. That’s like having an extra three Manchester Metrolinks, Britain’s largest tram network. It would mean new trams in cities like Leeds, Bristol, and Cardiff.

Why are Britain’s tram-building costs so high? In the next post in this series, we look at how regulations, the planning system, and an over-eagerness to move utilities pushes up costs. 

This was written by Ben Hopkinson, Britain Remade’s Head of Research. You can read his Substack here.