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Liverpool rejection

The Secretary of State for Transport (Mr. Alistair Darling) yesterday turned down funding for Merseytram on the grounds that project costs had substantially increased above the agreed level of GBP170m. His decision on the tram shocked local MPs, the city council and transport officials who had expected him to give it the green light.

In December 2002 the scheme was given provisional approval at a public sector cost of £225 million, in cash terms, with a capped DfT contribution of GBP170 million. By 2004 the cost had increased to GBP325 million with the Department's being asked to contribute GBP204 million.

In Liverpool there has been criticism of the City Council for its alleged role in the increase in costs while other blame the Government itself for its protracted procurement procedures and other measures highlighted in the recent Select Committee reports.

14 June 2005

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