The Midland Metro will never meet its passenger targets unless it is extended into Birmingham city centre, the national financial watchdog has warned.
The £145 million light-rail system could not be considered a success because it was attracting far fewer passengers than expected, according to officials from the National Audit Office. Uncertainty continues to surround proposals to extend the metro into the centre of Birmingham.
Alistair Darling, the Transport Secretary, is to announce the results of a public inquiry into the scheme.
But even if he gives the go-ahead as expected, work cannot begin without the support of the city council, which is considering alternative proposals for an underground railway system instead.
The Midland Metro, running from Wolver-hampton to Snow Hill in Birmingham, was expected to attract eight million passengers a year, but it currently attracts 5.1 million.
The National Audit Office is the official body overseeing public spending. Officials were giving evidence to the House of Commons Transport Committee, which is investigating whether other forms of public transport, such as improved bus services, are more effective than light rail.
Audit Manager Stewart Lingard told the committee: "There is an issue around what we call optimism bias. That is about forecasting patronage which will not be achieved.
"For example, the Midland Metro scheme has not met its patronage levels and probably never will."
Keith Holden, an NAO director, added: "The Midland Metro stops short of New Street station in the centre of Birmingham. So the key thing there is it can take you so far in some cases, but it may also need some running just to the centre of the city."
Light-rail systems, which failed to meet passenger targets, were also failing to provide the expected benefits which went with taking cars off the road, such as reducing the number of accidents, reducing congestion and cutting pollution, Mr Lingard said.
Only two Britain's seven light-rail schemes, in Manchester and Croydon, had achieved the expected benefits, he added.
Mr Lingard said: "The systems have realised a lot of benefits. They are fast, reliable, frequent and comfortable. But they haven't realised their full potential." ..SUPL: