Scottish Secretary David Mundell has raised hopes that the north-east’s £2.9billion City Deal could be signed-off before the end of the year.
The Conservative minister revealed that he had been “impressed” by the proposals put forward by Aberdeen and Aberdeenshire councils and that he was “optimistic” that they would win approval.
The two local authorities submitted their “statement of intent” for the lucrative package earlier this month.
They hope the City Deal will unlock major new investment to transform the region’s transport infrastructure – including accelerated rail upgrades, new stations and a radical bus-only roads network – as well as an Oil and Gas Technology Centre and an expansion of Aberdeen harbour.
Mr Mundell was speaking to the Press and Journal yesterday while on a visit to the Granite City for talks with the two council leaders, as well as oil and gas chiefs.
Asked if he could envisage any circumstances in which the proposals would be rejected by the UK Government, he said: “It’s important that the basis of the City Deal is one that meets the necessary criteria, which is primarily to demonstrate that it can deliver growth and will make a real difference.
“I think the sort of projects that have been identified by both councils obviously give a view that that’s the case, but you know we have to go through a due process and the Treasury have to apply the proper rigour to it.
“But what I’m impressed by is, having met UK Oil and Gas and having met businesses, how everybody is on side – it’s not people arguing over which projects should be backed.
“There’s an understanding of the seriousness of it in terms of getting particularly these transport issues in and around Aberdeen sorted, and I therefore am optimistic that we can get an agreed City Deal process.”
Mr Mundell said that the negotiations did not have to be concluded by the chancellor’s Autumn Statement in November, but that he was hopeful they could be agreed by the end of the year.
“It might be possible to have something said by the end of this year, I think there’s clearly a wish from the councils to achieve that, but from the government’s point of view we have to have a proposal on the table and look at it,” the MP for Dumfriesshire, Clydesdale and Tweeddale said.
He also suggested that Treasury-backed loans could be used to fund the transport schemes in the bid.
City council Jenny Laing said she would be “delighted” if the package could be agreed by the end of the year.