So, the Edinburgh Sub is my pet peeve,
and here is a previous thread on the issue. For simplicity, here is why it's not going to happen:
Unlikely to happen, we've been over this before.
In my career I oversaw six or seven different feasibility studies into this issue, and the answer was always the same; if you can somehow find the capacity to Waverley, or even Haymarket, you're into a winner. But good luck with that.
The problem with this line is three-fold.
Number 1
Its actually used a fair bit. There are quite a lot of long distance freight trains that would be out of guage for going via Waverley, and that's even if you could find capacity. There is a civils depot at Millerhill, an EMU depot, the line will be used for diversions at various points in the future, it's used to turn units around, as a back way into Haymarket and Craigentinny depots, and it's used to shove stuff out of the way for an hour if a spare platform is needed at Waverley.
All this doesn't amount to a train every fifteen minutes, far from it, but if you took it away, you'd suddenly notice its absence in very dramatic ways.
If you put trains around it, there isn't the capacity at Waverley, by a long, long shot. You'd be looking at a 3bn investment just to open up more capacity into Waverley from one end, just to make the paths work. Try to make it a circle, with capacity at both ends and you'd be doubling that.
Now, this doesn't mean you can't put trams around it, but you need a high frequency to make a tram worth it, and threading a tram every ten minutes around the sub is suddenly going to upset a great many stakeholders. The signalling isn't great and the sections are quite long. That could be fixed, but you'd be looking at either reduced capacity for trains or reduced tram frequencies to fit around the trains. If it's the latter then it quickly becomes uneconomical to convert to trams anyway.
Number 2
The line faces the wrong way. It goes across the southern inner suburbs of Edinburgh, in a big loop. There isn't high demand to go from say Portobello to Mayfield, or from Cameron Toll to Gorgie. The line doesn't work unless you thread the trams into the city centre, which means you need to send them to Haymarket or Waverley.
You can't use the big railway, as there's no capacity, so you'd need to somehow connect to the existing tramline.
At the West end you could maybe do this by coming off the sub, under the E&G line at Murrayfield and joining in the tramline, but that's expensive. At the east end you'd have to thread them from Fort Kinnaird, via Portobello or Willobrae and back to Princes street. Either way is expensive, and the route from the east, although it would serve a lot of people, seems an excessively long way to get to Morningside.
Additionally, if you send trams around the sub, it would still in most cases be quicker to take a direct bus into town. A bus from Morningside station to Princes Street takes 20 minutes and comes about every 4 minutes. There isn't any point taking a tram 'sideways' around the outside of the city and back into town along an east-west axis.
Number 3
For the cost of buying new dual-voltage trams (good luck getting NRScot to agree a 750v wiring system, or even more unlikely to sell the railway) and converting the railway (resignalling, building tram stations, and building the connecting links of tramway to link up with the other bits) you'd be looking at a cost of say £5bn. For that, you could buy a new line to Granton, a new line to Loanhead via Cameron Toll, a new line to the Royal Infirmary, a new line to Musselburgh via Portobello, and still have change left over for the rolling stock and a new depot somewhere.
The sums have never added up with this idea. The capacity isn't there for trains, and if you're buying trams, just stick them where they'd be more useful
