Q. So is the Government supporting Merseytram? A. To this point, yes. The Department for Transport has pledged £170m for Line One (most of the remainder is covered by £25m from Europe and around £10m from Paradise Street developers Grosvenor) and is currently pondering a £200m plus bid for Line Two. Q. Is it likely Line Two will also receive funding? A. A crucial question and there is no easy answer. Hopes were very high and there is no doubt Merseytravel chief executive Neil Scales has the confidence of ministers. But the Government has already turned down recent requests for funding for an extension of tram systems in Manchester, Leeds and Portsmouth and many believe it has fallen out of love with light rail systems. The difference for Merseytram is that it has used a different bid process which has prevented costs spiralling as they have elsewhere. Q. So there is Government funding for Line One and possibly for Line Two. What's the problem? A. Essentially the problems are centred on time and money, and how Liverpool City Council perceives the scheme. Q. Let's start with money. A. The budget for Line One is tight but becomes much more manageable if Line Two funding is also secured because economies of scale of around 25% can be achieved. Liverpool City Council is concerned that the Government will not back Line Two and that any cost rise in Line One would then end up having to be met by council tax payers. They also believe that Merseytram could end up needing an annual revenue subsidy to keep it going if it is not profitable, again possibly falling to council tax payers. Q. How likely is that? A. Well, tram systems often lose money in the first year as they try to build up patronage - Sheffield's system suffered particular problems. But the Daily Post has not found any UK system which currently receives subsidy - both Manchester and Sheffield are now very profitable. Q. What about time? A. Liverpool's winning bid for Capital for Culture in June, 2003, ended up causing problems for Merseytram. Liverpool City Council was obviously concerned that delayed tram works could leave the city centre looking like a building site in 2008. It eventually secured an agreement that all construction work will stop on the tram in 2008 if it is not finished by then. | 
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