1 Thursday, 7 September 2017 2 (9.30 am) 3 MR DONALD ANDERSON (continued) 4 CHAIR OF THE INQUIRY: Good morning. Good morning, 5 Mr Anderson. 6 A. Good morning. 7 CHAIR OF THE INQUIRY: You're still under oath. 8 A. Yes. 9 CHAIR OF THE INQUIRY: Mr Lake. 10 Examination by MR LAKE 11 MR LAKE: Thank you, my Lord. Mr Anderson, I was just 12 turning to questions of the procurement strategy for the 13 tram contract. Were you aware what the procurement 14 strategy was? 15 A. I wouldn't say I was aware in depth in terms of what the 16 procurement strategy was at the stage that I was on the 17 Council or Council Leader. I couldn't state that I had 18 a comprehensive knowledge of where I was at and what was 19 happening. 20 Q. Even without a comprehensive knowledge, were you aware 21 of any of the key tenets of the strategy? 22 A. Not in any particular depth, I don't think. I mean, as 23 I say, at the stage that I was involved, there were two 24 major projects, ERL and the trams being progressed, and 25 I don't think I got into detailed discussions with 1 1 officers in terms of the procurement strategy. 2 Q. Could I ask you then to look at page 69 of your 3 statement. That could be found on page 33. 4 The first sentence notes that you gave evidence to 5 the Parliamentary Committee in relation to the Bills 6 going through Parliament. You say: 7 "I stated that I anticipated utility diversion work 8 would start in the autumn of 2006 and that work on the 9 new infrastructure would begin in the following year. 10 I'm not sure if I had a fixed view whether 100 per cent 11 of the utility work would be complete before the tram 12 project was fully implemented, but it was a big issue 13 for us." 14 Are you aware what happened in relation to that 15 issue, when the utility works would be carried out 16 relative to the other works? 17 A. I haven't been involved intimately in the discussions 18 about the progress of the utility works, but I'm aware 19 that there were a number of very, very serious issues in 20 terms of delivery of the utility works, and that utility 21 works were carried out in a number of places on a number 22 of occasions. 23 So it was a serious issue for the progress of the 24 tram project. 25 Q. In that light also, could I ask you to look at 2 1 paragraph 82 of your statement, which will be found on 2 page 38 of the scan, page 39 of the printed version. 3 You have noted there that you are not sure whether early 4 works on utilities had the desired effect of firming up 5 cost estimates as envisaged: 6 "Looking back on it with my involvement latterly in 7 the project, it was clear that the works on the 8 utilities were not appropriately handled. They were not 9 carried out efficiently and effectively in order to 10 enable the on-street works to proceed and that was 11 a huge issue in a number of different locations across 12 the tram route. Whether and how much I was aware of 13 that at the time I cannot say." 14 Is that suggesting that your understanding of the 15 utility works has all arisen since you left the Council? 16 A. I think in terms of utility works, we did have a lot of 17 discussions about making sure that we learned the 18 lessons of what happened in Dublin, because in Dublin, 19 they had a horrendous period when utility works were 20 being carried out in either an ad hoc or an inefficient 21 manner, and we specifically charged officials with going 22 to Dublin to learn the lessons of that, because we knew 23 that when it came to Edinburgh, Edinburgh being 24 a historic city, once you started digging up the roads, 25 you wouldn't necessarily find what was on the record of 3 1 being there. 2 So it was going to be a complicated issue, and my 3 recollection, as we made sure that Andrew Holmes and 4 senior officers at the Council understood that they 5 needed to be well prepared, and that the homework needed 6 to be done to make sure that that went as smoothly as 7 possible. Because what would happen if you didn't get 8 that right was that areas like Haymarket, areas like 9 Leith Walk, where there are significant numbers of small 10 traders, would face huge difficulties and also you would 11 also -- you would have reaction from residents in 12 Edinburgh who would see either dysfunctional or 13 inadequate work going on, and they wouldn't keep quiet 14 about it. That would be a massive issue in terms of 15 managing the tram project and the communications for it. 16 So we were aware of the scale of the challenge 17 there, and we did specifically charge officers with 18 making sure that they had arrangements in place to do 19 so, and I was given reassurances that that was the case. 20 Q. When you say we in that context, is that you -- 21 A. That would be me and Tom Aitchison and the discussions 22 that we had with Andrew Holmes. 23 Q. When you say you charged officials, you are talking 24 about people within the Council, are you? 25 A. Yes, City Development. 4 1 Q. Presumably you'd expect them to have to carry that 2 forward to TIE, because if it was within TIE -- 3 A. Absolutely. 4 Q. -- it would be handled? 5 A. Absolutely. I would expect them to work hand in glove 6 with TIE throughout that period to make sure that it 7 went as smoothly as possible. 8 Q. Other than expecting the utility works to be carried out 9 in an efficient and effective way, did you have any view 10 as to what that would entail, what was an effective way 11 of handling them? 12 A. I don't think logistically -- I'm not an engineer. It 13 wasn't my job to direct the officials on precisely how 14 to carry out the works in that sense. What it was my 15 responsibility, I think, to do, to flag up that we knew 16 this was a huge issue for Dublin, where it made the tram 17 project in Dublin very, very unpopular at the early 18 stages. It became much more popular once it was 19 actually implemented, but during the construction phase, 20 there was an absolute uproar in Dublin because of the 21 failures in the utility works, and we were alive to the 22 fact that that had to be done very, very carefully and 23 very efficiently in Edinburgh to make sure that we 24 didn't repeat those mistakes. 25 Q. In that paragraph 82 that we have on screen, you comment 5 1 that it was not in your view carried out efficiently and 2 effectively to enable the on-street tram infrastructure 3 works to proceed. 4 What did you consider the problem to be? 5 A. I think there were probably failures on the part of 6 contractors who were carrying out the work. I think 7 there were also failures in the way that the 8 communications were handled, in terms of advertising the 9 works that were going on; the way that the on-street 10 activities were managed, I think made it difficult. 11 They had signage issues, a whole range of difficulties, 12 and they went in and didn't complete utility work in 13 stretches of the tram route where they had to go back in 14 and repeat the works again. So there were failures in 15 terms of delivery in that sense, and that just added to 16 the pain and misery across the city. 17 Q. In relation to areas where works -- they had to go back 18 in and do works, it may be after you had left the 19 Council, were you aware of what the reasons were for 20 having to go back in? 21 A. I don't think in depth. I don't think I could point the 22 finger at either an individual contractor or 23 organisation and say they caused this particular 24 problem. But I think everybody in the city was aware 25 that it wasn't going the way it should have gone. 6 1 Q. Could we look, please, at the previous page, page 37 of 2 the scan, page 38 of the printed version. 3 It's the passage right at the foot of this page, two 4 lines. It goes on to the next page. You said: 5 "I'm not sure how much I was aware of these 6 issues..." 7 I should say the bit above is relating to various 8 design concerns: 9 "... at this stage, but I was certainly aware that 10 where there was an absolutely pressing and imperative 11 need to make sure that the design issues were progressed 12 quickly. If the design issues were not progressed, 13 there would be a problem when the contractor was 14 appointed to carry out the on-street works. The 15 contractor would be ready and on site to carry out the 16 works but would not be able to do so because of the 17 incomplete design work. It was therefore 18 a fundamentally important issue and something that had 19 been an absolute priority for Council officers in TIE 20 who were working on it at the time. 21 When you say "Council officers in TIE" there, do you 22 mean "Council officers and TIE"? 23 A. "and TIE". 24 Q. Probably a typographical error. 25 A. As I said, I didn't have much time to go through the 7 1 document to proof it. 2 Q. Is this something that with hindsight you are saying 3 that design is important, or was it something that was 4 very much a focus at the time for you? 5 A. I think -- that's a good question, very difficult to 6 give you a precise answer. I think I was aware of the 7 need to progress the design. Whether I was more aware 8 of that as an issue when compared to, for example, 9 utility issues, probably not as fixed on making sure 10 that officers were alive to the challenges that that 11 would pose, but I was aware of it. Whether that view 12 has been affected by hindsight, I mean, certainly it has 13 proven to be the case that the design works weren't 14 progressed quickly on the project. It's been proven to 15 be the case that the on-street works weren't progressed 16 efficiently and appropriately. 17 But I was aware of it, perhaps not to the degree 18 that I was aware of the need to make sure that the 19 utility works were carried out properly. In a sense, I 20 mean, that wasn't an issue that I was concerned about 21 because it wasn't -- as concerned about, because it 22 wasn't going to be a point of friction with residents 23 and businesses in the city centre, and was something 24 that I thought could have been readily resolved by 25 resources, by making sure that people progressed that 8 1 work quickly in the run-up to the construction of the 2 trams. Whereas I was acutely aware, even from my own 3 experience in my own ward, that utility works could be 4 very, very complicated, not just in Edinburgh, but in 5 particular in the city centre. So I was more alive to 6 that, I think, than I was to the design issues. 7 Q. I won't go further with design there just at the moment 8 then. 9 You are aware that the Draft Final Business Case for 10 the trams was put before the Council in December 2006? 11 A. Yes. 12 Q. Thereafter, the Final Business Case was put before the 13 Council in its final form in December 2007? 14 A. Yes. 15 Q. I appreciate you would have left the Council by the time 16 the final Final Business Case was being put forward. 17 Were you aware of any reason why that had to be done in 18 December 2007, or could it have been later? 19 A. Not specifically from memory, no. 20 Q. What I would like to do is look at the Draft Final 21 Business Case that you had a hand in. Could we look, 22 please, at document CEC01821403. 23 Perhaps just to get a feel for it, could we go to 24 the first page, also the second page, to get some idea 25 of the contents. 9 1 Do you recognise this document? 2 A. I accept that's what it is. I'm not sure I recognise it 3 from way back in 2006. 4 Q. Could we jump forward, please, to page 72. 5 Could we go forward one more page to page 73. Once 6 again it's the difference between the printed numbers 7 and the scanned page numbers. 8 We can see at paragraph 6.3 there a heading above 9 it, if we could just enlarge that. Even at that stage 10 it said: 11 "The structure highlights the following four key 12 bodies, the roles of which are represented in the 13 figures below." 14 The four bodies are the TEL Board, the Tram Project 15 Board and two sub-committees of the Tram Project Board. 16 Why was TIE not one of the key bodies by December 2006? 17 A. I think it was a key body. It's just that it fitted in 18 alongside the other organisations that were seen as 19 having a role in delivery of the project. It was not 20 that it wasn't a key body. 21 Q. But it wasn't -- these four seem to be the prime bodies, 22 the ones that are named there, with TIE in some sort of 23 secondary role? 24 A. I mean, from memory, I can't remember exactly the 25 rationale behind the wording in the Business Case in 10 1 that regard. But TIE was responsible for delivering 2 potentially a number of projects. So it would have fed 3 into those. This was specifically about the tram 4 project. So presumably the idea was that the input 5 would be received by TIE, but overseen slightly 6 differently. 7 Q. As at 2006, of course, the ERL project was still a live 8 one? 9 A. Yes. 10 Q. If you look over the page -- 11 A. And at that stage there were other transport projects 12 that TIE either was involved in or had aspirations to be 13 involved in, in east central Scotland. 14 Q. If you look over the page, it's page 74 of the scanned 15 version, we highlight the heading "Tram Project Board", 16 and the paragraph beneath it, it notes there, the Tram 17 Project Board is established as an independent body with 18 full delegated authority from the City Council through 19 TEL and Transport Scotland to execute the project. 20 This seems to be giving some primacy towards the 21 Tram Project Board as being the body that would actually 22 execute the project. Was that the intention at the 23 time? 24 A. I have to confess, I don't remember precisely what the 25 rationale and the logic was behind that, but looking at 11 1 that, and the relationship with Transport Scotland was 2 going to be an important one for the tram project. So 3 this was, I think, seen as the mechanism whereby the key 4 people got around the table to oversee the project. 5 Q. But I think there we see that the role is designated as 6 not one of oversight, but it is one that the Project 7 Board will execute the project. 8 Put it another way. How do you see the role between 9 TIE on the one hand and the Tram Project Board on the 10 other at this stage? 11 A. I think at that stage what you would want to do is you 12 would want to have a structure that enabled the project 13 to proceed and be properly monitored. 14 My view is it would be quite a fluid situation while 15 you were taking the project forward and you would 16 adjust, depending on the way the working relationships 17 between the various organisations. So I don't think 18 it's necessarily the case that there was a blueprint 19 that would be there forever and was essential for the 20 delivery of the project. 21 I think it was about making sure that there were 22 appropriate mechanisms in place to oversee and progress 23 the project. 24 Q. When you talked there about adjusting according to the 25 working relationships during the project, could you 12 1 explain what you mean by that? 2 A. In any major project over a period of time, you will 3 learn lessons as the project proceeds. You will have 4 people who have varying degrees of strengths, either in 5 their oversight role on the board or in the Council, 6 within the organisation itself. You will recruit or you 7 may lose people during the course of a project. 8 So there is a responsibility on the organiser, in 9 this case the Council, to be able to respond to those 10 issues over a period of time because these are big 11 projects. There will be challenges that arise from time 12 to time that need to be addressed. 13 The structures might not always necessarily reflect 14 the best way to respond to those structures. So you 15 have to be flexible in how you manage those, and that's 16 what I would have anticipated happening over the 17 lifetime of the tram project. 18 There would be issues that arose, needed to be 19 addressed, and the right people would get in a room and 20 sort them out. 21 Q. One can see therefore that matters might change over 22 time to suit the circumstances; is that right? 23 A. Yes. 24 Q. I have to ask you to say it rather than just nod because 25 it has to be picked up for transcript purposes. 13 1 A. Of course. 2 Q. But just taking a snapshot at December -- November 2006, 3 we can see at the top of the page, as it went forward to 4 the Council, what they were being told was that the Tram 5 Project Board would execute the project. I'm just 6 wondering, was there any reason why it was the Tram 7 Project Board rather than TIE at this stage? 8 A. I think as I said, because the aspiration was that TIE 9 would be involved in a number of projects and would feed 10 into those individual projects as a delivery vehicle for 11 them, and the Tram Project Board would have that role of 12 overseeing and helping implement the project with TIE's 13 input. 14 Q. If we jump forward then to, I think it will be page 77 15 of the scanned version, page 76 of the printed, you can 16 see now we are looking at a section on procurement 17 strategy, and if we look over the page from that -- 18 sorry, over two pages, page 78 of the printed version, 19 if we look, at the top half of the page, paragraph 7.13, 20 if we look at the fourth last bullet point there, we can 21 see development of what you've already talked about. It 22 notes that a key element was that there would be 23 separate procurement of utilities works to enable 24 completion of the utilities diversion, before 25 commencement of the infrastructure works, thus reducing 14 1 risk to the construction phase. And it goes on. 2 A. Yes. 3 Q. Was that a sort of continuation of the concerns that you 4 had expressed arising out of the Dublin experience that 5 they were to be dealt with? 6 A. That looks to me like a reflection of that concern, that 7 there was an understanding in the Council that had been 8 thrashed out over a period of time, that you had to get 9 the utility works done before you started laying tracks. 10 Q. Looking at the third bullet point in that list, it's 11 early commencement of design by SDS to reduce scope and 12 pricing risk in infrastructure and tram vehicle bids 13 together with a reduction in overall programme. 14 You said you weren't as involved in the issues of 15 design. Was the question of commencement of design 16 something that you were involved in? 17 A. I can't comment on how closely I was involved in the 18 issue of design, but there was a clear understanding 19 that in order to deliver certainty for the project, the 20 more that you could make sure that some elements of the 21 project were firmed up in advance, the better you would 22 be placed in terms of the procurement process. 23 Q. If we could jump forward to page 85 in the scanned 24 version, this time I meant page 85 in the scanned. It's 25 page 84 in the document. And we go to paragraph 7.53. 15 1 You see it's under the heading "Activities under the SDS 2 contract", but we are told that: 3 "It is expected that the overall design work to 4 detailed design will be 100 per cent complete when the 5 Infraco contract is signed." 6 Was that expectation, that part of the procurement 7 strategy something you were involved with in discussing? 8 A. I don't know that I was involved in ensuring that phrase 9 was included in there, but we had a very clear 10 understanding that the on-street utility works had to be 11 completed before you started laying the tracks, and 12 design work had to be progressed appropriately to make 13 sure you minimised the risk to the project. 14 MR LAKE: Thank you very much, Mr Anderson. Those are my 15 only questions. 16 CHAIR OF THE INQUIRY: Mr Fairley has made representations 17 following yesterday's evidence and no other party has, 18 so I presume nobody has any issues arising apart from 19 Mr Fairley. Mr Fairley? 20 MR FAIRLEY: My Lord, with your Lordship's permission, 21 I would wish to ask a small number of questions of this 22 witness arising out of his evidence yesterday between 23 pages 216 and 219 of the Live Note. In particular, 24 I would wish to ask him questions about the evidence he 25 gave at 216/22-25 and 217/17-20. Broadly speaking, 16 1 these relate to the question of the accuracy of 2 reporting of adjudication outcomes in the DRP process by 3 TIE, and the purpose of my questions will be to try to 4 assist the Inquiry in assessing the reliability of that 5 evidence insofar as it bears upon that issue. 6 What I would propose to do is to refer the witness 7 to certain passages in some documents which are already 8 before the Inquiry. Given the generality of the 9 evidence that he gave yesterday, I doubt that I will be 10 able to do that simply by reference to one document, but 11 I can say that I can limit the number of documents that 12 I will be referring him to no more than six and I will 13 only be referring to short passages within those 14 documents. 15 I should perhaps also say that this is an issue 16 which I had given notice last week was of interest to me 17 and that I might wish to ask questions about. That was 18 rather reinforced by the terms in which the witness gave 19 his evidence yesterday, which in my submission possibly 20 went rather further than in his written witness 21 statement. So it's for that reason that I'm making the 22 submission that I do. 23 CHAIR OF THE INQUIRY: Yes. I'm happy to allow your 24 application. 25 You said that you were prepared to restrict 17 1 reference to the number of documents. If you feel that 2 you wish to refer to more documents, that's not 3 an invitation, but if you feel that you wish to refer to 4 more documents to do justice to the points that you are 5 making, feel free. I take it all these documents are in 6 Haymarket. 7 MR FAIRLEY: They are all in Haymarket, yes. 8 CHAIR OF THE INQUIRY: When you are referring to them, if 9 you could give the reference -- 10 MR FAIRLEY: I will, yes. 11 CHAIR OF THE INQUIRY: -- solely so that the operator can 12 pick up the reference. 13 MR FAIRLEY: Yes. I'm obliged, my Lord. 14 Examination by MR FAIRLEY. 15 MR FAIRLEY: Mr Anderson, in your evidence yesterday you 16 spoke at one stage of what you described as a deliberate 17 co-ordinated series of actions to prevent key figures in 18 the Council from having accurate and important 19 information. Do you recall saying that? 20 A. Absolutely. 21 Q. And you slightly rephrased that a little later in your 22 evidence by describing it as an organised attempt to 23 prevent elected members in Edinburgh from having 24 important information, but effectively you were talking 25 about the same thing? 18 1 A. Yes. 2 Q. When you were asked by Counsel to the Inquiry to 3 identify what you meant by that, you identified two 4 particular matters, the second of which you described in 5 the following terms: 6 "If you lose adjudications and you present them as 7 being successes, that's deliberate misinformation that 8 you are presenting to the Council." 9 A. Yes. 10 Q. Is that correct? 11 A. Yes. 12 Q. That was one of the two? 13 A. Yes. 14 Q. It's that issue that I want to ask you about. I want to 15 ask you to look at some documents. 16 Could I ask, first of all, that we have document 17 number CEC00416111. Just the first page of that 18 document will suffice to start with. 19 Now, we see, I think, that this is a set of papers 20 for a Tram Project Board meeting to be held on 21 16 December 2009. Do you see that? 22 A. Yes. 23 Q. I appreciate you had left the Council by this stage. 24 You've been away from the Council by this stage for 25 roughly two years? 19 1 A. Under, but ... sorry, over. Over two years. 2 Q. On the front page there we see the distribution list for 3 these papers, divided between members and attendees and 4 then a list of people who received the papers for 5 information only. Do you see that? 6 A. Yes. 7 Q. If I have read this correctly, there are four 8 councillors in total within those two sets of lists. 9 That's Councillors Perry, Wheeler, Chapman and Buchanan; 10 is that right? 11 A. Yes. 12 Q. And there are also some fairly senior Council officials, 13 including Mr McGougan, who I think was the Finance 14 Director; is that right? 15 A. Yes. 16 Q. And Mr Anderson, who was the Chief Executive? 17 A. Director of City Development. 18 Q. Director of City Development, I'm sorry. I apologise. 19 I think I may also have missed a councillor in fact. 20 There's two other councillors amongst the members. 21 That's Councillors Jackson and Mackenzie; is that right? 22 A. Yes so. 23 Q. So there's in fact six councillors who received these 24 papers, it would appear? 25 A. Yes. 20 1 Q. Now, can we turn now, within that document, to page 6 2 and can you highlight 3.2 at the very foot of page, 3 "Strategic Summary". I'm afraid this goes over the 4 page, so we will have to take it in sections. 5 This is a heading -- a subject heading for what is 6 in fact, if you take it from me, this is the minutes of 7 the previous meeting of the Tram Project Board which 8 took place on 18 November. 9 What is recorded here is that RJ, who I think is 10 Richard Jeffrey? 11 A. It would be. 12 Q. Provided the board with a report on the outcome of the 13 decisions from the -- if we go over the page: 14 "... adjudicator (16 November 2009) on the 15 Carrick Knowe and Gogarburn Bridge matters." 16 These are both adjudications; is that right? 17 A. Yes. 18 Q. These were amongst the early adjudications that took 19 place between TIE and -- I'll refer to it as the 20 consortium, but it's also known as Infraco and sometimes 21 BBS. Is that right? 22 A. Okay, yes. 23 Q. What is then narrated three or four lines down is 24 somebody called KH, who I think is Kenneth Hogg; do you 25 see is that? 21 1 A. I see it. I don't recognise the name particularly. 2 Q. "Kenneth Hogg asked if TIE's interpretation of the 3 contract has changed through the evolution of this 4 process and queried whether a review of the strategic 5 direction of the DRP is necessary." 6 There then appears to have been a lengthy discussion 7 at board level about that, including about the 8 interpretation of the contract. 9 A. Yes. 10 Q. Do you see that? 11 It would seem to be reasonable to infer that the 12 news that Mr Jeffrey was bringing to the Tram Project 13 Board at this meeting on 18 November was not good news 14 about the outcome of these adjudications. 15 A. I think it's difficult to tell from that minute, and the 16 point that I would simply make is that key elected 17 members and officers of the Council, as far as I'm 18 aware, weren't given access to the adjudication 19 decisions in any detail. 20 What we were given was presentations or 21 interpretations of the adjudication process, whereas if 22 elected members had been given a copy of the 23 adjudications themselves, they could have made up their 24 mind. I have read these adjudications. I am not in any 25 doubt of what the outcome is. But I think there was an 22 1 attempt to maintain on the part of TIE an interpretation 2 of the adjudications that was much more positive than 3 was actually justified by the adjudication results 4 themselves. 5 So in that sense, I do firmly believe that elected 6 members and senior officers of the Council were misled. 7 Q. I'll come to elected members shortly, Mr Anderson, but 8 really what I'm asking you about at the moment is 9 confined to the Tram Project Board. 10 It would certainly appear from the relatively brief 11 minute that we have of the meeting of 18 November 2009 12 that Mr Jeffrey was telling the board at that stage that 13 the adjudications at Carrick Knowe and Gogarburn Bridge 14 had not been successful? 15 A. I don't know if I can be precise, looking at the wording 16 of that minute, that that's exactly what that says. 17 There were questions raised about Richard Jeffrey's 18 presentation of the material and it was queried whether 19 a review of the strategic direction of the DRP is 20 necessary. It doesn't spell out in precise terms why 21 that question was raised. 22 Q. If I'm right about the interpretation of that, however, 23 that would not suggest that Mr Jeffrey was presenting 24 losses as successes, would it? 25 A. I don't know if I can say that definitively, looking at 23 1 that minute. What I can tell you is that senior elected 2 members and officers of the Council were entitled to get 3 access to the information they needed to make important 4 decisions about one of the biggest projects and the most 5 controversial projects in the city's history and they 6 weren't given access to that information. Indeed they 7 were denied, and deliberately denied access to that 8 information by officials and TIE. 9 Q. What I'm asking you about, Mr Anderson, I'm sorry if I'm 10 not making myself clear, is -- 11 A. I think you are making yourself clear. I'm just not 12 sure I agree with you. 13 Q. If I'm not making myself clear, the fault is mine. 14 I'm asking you about an allegation that you made 15 yesterday that adjudications were presented as being 16 successes when in fact they were losses. And what I'm 17 putting to you is if my interpretation of this passage 18 in the minute is correct, it would not appear that 19 Mr Jeffrey was presenting losses to the Tram Project 20 Board as successes. Do you agree or disagree? 21 A. I don't agree that you can definitively say that, 22 looking at that minute. I wasn't at the meeting. I'm 23 not sure what Richard Jeffrey said to the Project Board 24 at the time. 25 What I do know, and what I think will emerge in 24 1 discussions between officials from Bilfinger is that the 2 interpretation that was presented on the adjudication 3 process was not a reflection of the reality of the 4 adjudication process, in terms of the way that 5 information was conveyed by TIE. 6 What is an absolute fact, though, is that key 7 figures in the Council who should have been given access 8 to the full information were given interpretations of 9 the information rather than the actual adjudication 10 process themselves. 11 If TIE wanted to convey information accurately about 12 the outcome of the adjudication process, they should 13 have just given the adjudications to the officials and 14 the elected members who were taking these very difficult 15 decisions. 16 Q. Is your evidence then, Mr Anderson, that you simply 17 don't know what Mr Jeffrey said to the Tram Project 18 Board about Carrick Knowe and Gogarburn? 19 A. Of course I don't know. I wasn't there. I think that's 20 self-evident. I don't know what Richard Jeffrey said to 21 the Tram Project Board. What I do know is that elected 22 members and officials of the Council, even to the extent 23 of the Chief Executive of the Council, did not get 24 access to the detailed information that was in the 25 adjudication decisions. 25 1 I can't for the life of me understand why. Had 2 I been Council Leader at that time, I would have 3 expected that information to be on my desk. I can 4 understand the concerns about confidentiality and about 5 not wanting to give advantage to a contractor in that 6 kind of process. But the Chief Executive of the 7 Council, the Leader of the Council, the Director of the 8 City Development, the executive member for that 9 portfolio, should be trusted with any and all 10 information that they need to take such a decision. 11 There's no question in my mind that none of those four 12 individuals would leak information in a damaging way 13 about the adjudication process. 14 But for whatever reason, they were not given that 15 information. I think that leads me to believe very, 16 very firmly there was a deliberate campaign on the part 17 of TIE to deny those officials and those elected members 18 who were taking big decisions on this issue, the 19 information they required in order to take those 20 decisions. 21 Q. With the exception of the Leader of the Council -- 22 CHAIR OF THE INQUIRY: Mr Anderson, I think if we can -- 23 I think we have got quite clear in mind what your 24 evidence is. 25 I wonder if you could just apply your mind to the 26 1 particular question that you're being asked and give as 2 concise an answer as possible? 3 A. I'll do my best. 4 MR FAIRLEY: With the exception of the Leader of the 5 Council, who I will come back to in a moment, all of the 6 individuals you have mentioned as people who should have 7 had information about the adjudications were on the Tram 8 Project Board. That's right, isn't it? 9 A. A number of them, yes. 10 Q. All of them, apart from the Leader of the Council? 11 A. Yes. I accept that. 12 Q. Well, can I maybe help you then a little more with what 13 was said at the Tram Project Board in December of 2009. 14 In that same document, please, can you go to 15 page 23. 16 A. Sorry, can I just go back. I don't think the 17 Chief Executive of the Council was at the Tram Project 18 Board. So it was -- neither the Chief Executive nor the 19 Leader were at that meeting. 20 Q. Page 23 of the same document is a paper presented to the 21 Tram Project Board by someone called Mark Hamill, who 22 I think had an involvement in risk. Is that your 23 understanding? 24 A. I don't recognise the name Mark Hamill, but I accept 25 what you're saying. 27 1 Q. This, I should stress, is part of the board papers that 2 were presented to the Tram Project Board for the 3 December meeting. If we highlight from "period 9 4 update" to the foot of the page, please, and bring that 5 up on the screen. 6 What Mr Hamill records there for the board members 7 of the TPB is that the table below highlights those 8 issues which have entered DRP, which stands for dispute 9 resolution procedure, and that's another name for the 10 adjudications? 11 A. Yes. 12 Q. "... their current status and anticipated timescale for 13 conclusion. Previous DRP outcomes have been reported in 14 earlier papers." 15 I think in fairness that there had only been one 16 previous DRP outcome in the form of an adjudicator 17 decision prior to this board meeting. Are you aware of 18 that? 19 A. I'm assuming that that's the case. I wouldn't challenge 20 what you're asserting. 21 Q. It was a decision in relation to the Hilton Hotel car 22 park issued by Robert Howie QC, and TIE were successful? 23 A. They were, yes. 24 Q. Mr Hamill goes on: 25 "This table has been updated to reflect the 28 1 following." 2 It is the first bullet point I would draw your 3 attention to: 4 "The adjudicator reached a decision, preferring 5 Infraco's case on 5a and 5b and this is currently under 6 review by TIE and TIE's legal advisers." 7 Do you see that? 8 A. Yes. 9 Q. In the table below we see that 5a and 5b is a reference 10 to Gogarburn and Carrick Knowe. Do you see that? 11 A. Yes. 12 Q. So by the time of December 2009, there have been three 13 adjudication decisions. TIE has won the decision at 14 Hilton and Mr Hamill is reporting to the Project Board 15 that Infraco, the adjudicator has preferred Infraco's 16 case in relation to Gogarburn and Carrick Knowe. Do you 17 see that? 18 A. Yes. 19 Q. It couldn't really be any clearer who had won, could it? 20 A. I haven't seen these documents before, and that hasn't 21 been reflected in any of the conversations I have had 22 with elected members or with senior officials of the 23 Council. 24 Q. That's not the question I asked you, Mr Anderson. If 25 you would just confine yourself to answering my question 29 1 as his Lordship directed you. It could not be any 2 clearer that Infraco had won the adjudications at 3 Gogarburn and Carrick Knowe? 4 A. It looks clear from that, yes. 5 Q. If that is correct, that would not suggest that, at 6 least as far as information being imparted to the Tram 7 Project Board is concerned, these adjudications were 8 being presented as successes when in fact they were 9 losses, were they? 10 A. In terms of the presentation in that context, yes. 11 Q. So, so far as Gogarburn and Carrick Knowe is concerned, 12 we can take it that your evidence yesterday that 13 adjudications were being presented as successes when in 14 fact they were losses, you weren't referring to 15 Gogarburn and Carrick Knowe, you can't have been, 16 because that's not what was happening? 17 A. My recollection of the presentation of the adjudication 18 process was that the overall presentation of those was 19 much more positive to elected members and to senior 20 officials than was justified by what was in the 21 adjudications. 22 Q. I'll come to elected members in a moment, Mr Anderson. 23 I know I have said that on a number of occasions. I'm 24 just asking you now about the Tram Project Board. 25 It would not appear that Gogarburn and Carrick Knowe 30 1 were being presented to the Tram Project Board as 2 victories when in fact they were losses; that's correct? 3 A. I don't disagree with that. 4 CHAIR OF THE INQUIRY: Mr Fairley, we have already got that 5 question. Move on. 6 MR FAIRLEY: Thank you. 7 The next document I would like you to look at, 8 please, is CEC00473005. 9 This is a similar set of papers for a board meeting 10 of the Tram Project Board on 13 January 2010, so the 11 following month. Do you see that? 12 A. Yes. 13 Q. The front page contains similar lists of those who 14 received the papers on the distribution list. Do you 15 see that? 16 A. Yes. 17 Q. Now, can we go just for the sake of brevity straight to 18 page 47 of this document. Can you highlight the section 19 marked "Dispute resolution" all the way down to the foot 20 of the page. 21 If you take it from me, Mr Anderson, that this is 22 a report that was attached to the Tram Project Board 23 papers which was in fact a report to Transport Scotland 24 by the Tram Project Board. 25 A. Okay. 31 1 Q. What is recorded here is that there have been five 2 disputes referred to DRP, that's to adjudication, by TIE 3 and it lists them. It says: 4 "Agreement has been reached on Hilton (adjudicator 5 awarded in TIE's favour)." 6 We discussed that a moment ago. Do you see that? 7 A. Yes. 8 Q. So that is being reported correctly as an award in TIE's 9 favour. 10 "Commercial settlement has been reached on Haymarket 11 and EOT1." 12 So another two have been settled. Then it records 13 that: 14 "In the period we received the adjudicator's 15 response for the DRPs raised by TIE against Gogarburn 16 and Carrick Knowe Bridge. The adjudicator found largely 17 in favour of the position taken by BSC. TIE's response 18 to the adjudicator's decision remains under review." 19 Do you see that? 20 A. Yes. 21 Q. It would appear therefore that not only were the Tram 22 Project Board being told that Gogarburn and 23 Carrick Knowe had been resolved in favour of BSC, which 24 is another name for Infraco, but also that information 25 was being included in a report to Transport Scotland? 32 1 A. In that information, in the way that's conveyed to those 2 people, yes. 3 Q. Then in the paragraph beneath that: 4 "BSC have so far referred two disputes to dispute 5 resolution procedure." 6 So these were adjudications initiated by Infraco; is 7 that right? 8 A. Yes. 9 Q. One of them is described as Russell Road retaining wall. 10 Do you see that? 11 A. Yes. 12 Q. Another one, delays associated with the MUDFA revision 13 8. 14 What's recorded there at the third line is that the 15 adjudicator's decision against Russell Road was received 16 on 4 January and will be reported in period 11. 17 A significant saving resulted in excess of 400,000 on 18 the estimate presented by the consortium, by Infraco, 19 and the adjudicator agreed with TIE on many of the 20 principles in dispute. 21 That is, can I suggest to you, an entirely accurate 22 summary of the adjudicator's decision, of the 23 Russell Road retaining wall decision? 24 A. I think it's an accurate assessment of the outcome. I'm 25 not necessarily convinced that it's an accurate 33 1 assessment of how that was presented to elected members 2 in the Council and senior officers. 3 Q. That wasn't the question I asked you, Mr Anderson. 4 A. Understood. 5 Q. I'm asking how it's presented to Transport Scotland and 6 how it's being presented to the Tram Project Board. 7 What I'm putting to you is it's an entirely accurate 8 summary of the Russell Road decision, isn't it? 9 A. It's accurate in the way it's presented. 10 Q. Now, on a number of occasions I have said that I will 11 look at the question of elected members, and I'm going 12 to do so in the reference to one further document at 13 this stage. Could we have the document TRS00010706. 14 We see from the way that this is set out that it 15 starts with an email dated 21 April 2010 from Bill Reeve 16 to various individuals. But there is an email chain. 17 Do you see that? 18 A. Yes. 19 Q. I want you to go down to the foot of the page. We don't 20 need to highlight it on the screen, but I think we can 21 all see that that's an email from Richard Jeffrey of 22 TIE, dated 19 April 2010. Do you see that? 23 A. Yes. 24 Q. It is addressed to five named individuals, all of whom 25 are elected members; yes? 34 1 A. Yes. 2 Q. They are not just elected members. They are actually 3 the leaders of the five political groups which are 4 represented in the Council in April of 2010? 5 A. Yes. 6 Q. So we have Ms Dawe for the SLD, Mr Whyte for 7 Conservative, Mr Cardownie for the SNP, Mr Burns for 8 Labour and Mr Burgess for the Green Party; is that 9 right? 10 A. Yes. 11 Q. We see from the start of this email that it is 12 essentially an email from Richard Jeffrey updating them 13 on his review of progress after a year in the job. Do 14 you see that? 15 A. Yes. 16 Q. Can we go over to the second page, please. There are 17 two bullet points towards the foot of that page. Could 18 you highlight the first of those, please. 19 This is the passage in that email where Mr Jeffrey 20 summarises for these elected members the disagreement, 21 as he puts it, between TIE and the consortium. Do you 22 see that? 23 A. I see it. 24 Q. What he says is: 25 "There is a disagreement over what is or is not 35 1 included in the original fixed price contract. We have 2 always accepted that the certain things are legitimate 3 extras." 4 I think "the" is probably surplus there: 5 "That is why we have already agreed over 16 million 6 of extra payments. We do not agree that Bilfinger 7 Berger are entitled to all the things they are claiming 8 for. Whatever the disagreement, there is a clear and 9 conventional process under the contract for reaching 10 a conclusion on this issue. Some of these issues have 11 been decided at adjudication, which BB are claiming TIE 12 have 'lost'." 13 Do you see that? 14 A. Yes. 15 Q. In terms of this timing, this email is written at the 16 stage when there have been four adjudication decisions. 17 Hilton, Gogarburn, Carrick Knowe and Russell Road. 18 That's right, isn't it? 19 A. I'm assuming that's the case. 20 Q. There had only been, by April 2010, four decided 21 adjudications. 22 What Mr Jeffrey reports to these elected members is: 23 "It is true that we did not get all the results at 24 adjudication we would have liked ..." 25 Now, pausing there, that does not look, would you 36 1 agree, as if he is presenting losses as successes? 2 A. I think I'm confused about what exactly he is saying 3 during that statement. I don't think it's a very clear 4 statement. It's the first time I have seen it. But 5 what he is saying that is we do not agree that Bilfinger 6 Berger are entitled to all the things that they are 7 claiming for, and he's just saying that some of these 8 issues have been decided at adjudication which BB are 9 claiming TIE have lost. 10 I don't think that fully explains the situation to 11 elected members. 12 Q. What he's saying is the adjudications didn't go as well 13 for us as we would have liked, but on the other hand, 14 the results of the adjudication do not support the view, 15 extreme view of BB's entitlements that they took. 16 What I'm suggesting to you is that's an entirely 17 accurate summary of the four adjudications that had 18 taken place by April 2010? 19 A. I don't think that's how I would explain the 20 adjudication process to the elected members if it had 21 been me reporting on that. I don't think he's making it 22 clear to elected members what happened during the 23 adjudications. That's a narrative, rather than an 24 explanation. And a subjective narrative. 25 Q. It is not consistent, is it, with your allegation that 37 1 you made yesterday in very general terms that TIE were 2 presenting losses at adjudications as successes? 3 A. I do not see that as necessarily being inconsistent with 4 that claim. 5 Q. It's not consistent with the proposition that you put 6 forward that TIE were being dishonest about the outcome 7 of the adjudications? 8 A. I don't think it's inconsistent. I mean, can I just 9 say, we've already heard -- I mean, I heard because 10 I was in the room earlier, about the fact that 11 information was presented about the progress of design 12 work on the project. Information was presented to 13 elected members on the progress on the utility 14 diversions as well that was inaccurate and did not give 15 the full information to elected members. And with 16 regard to this information, I don't think, from my 17 discussions with either elected members or senior 18 officials, they were given accurate and full information 19 about the outcome of the adjudication process. 20 So I see that as a pattern of behaviour of 21 misleading the Council and providing the wrong 22 information, inadequate information to the Council, 23 and I repeat this again. This is the biggest, most 24 complex and most controversial project that the Council 25 had ever handled up until that point in modern history. 38 1 It was relying on TIE and officials in TIE to present 2 information to them honestly and openly in a way that 3 they could take the best decisions they could, because 4 these were decisions for which they would be held to 5 account, and they are being held to account through this 6 Inquiry process. 7 That suggests to me there was a pattern of behaviour 8 on the part of TIE to deny elected members who were 9 representing the citizens of Edinburgh legitimate 10 information that they needed to take decisions on this 11 project. 12 CHAIR OF THE INQUIRY: Mr Anderson, can I just interrupt. 13 The purpose of Mr Fairley asking you questions is he's 14 trying to focus on particular questions and it would be 15 helpful if you gave particular answers. I think I've 16 got clear in my mind what your position is and what the 17 reasons are for that. But you're being asked 18 specifically about the reporting of the adjudications 19 within this context. 20 A. Thank you, Lord Hardie. That's a helpful comment. My 21 only suggestion there is I don't think that accurately 22 reflects the adjudication process in the way that that's 23 presented. 24 MR FAIRLEY: Can I take it, Mr Anderson, that whatever else 25 we may agree or disagree on, we may agree on this. 39 1 Until I showed you this email, you did not know that 2 Mr Jeffrey had told the four leaders of the party groups 3 that it was true that TIE had not got all of the results 4 at the adjudication that they would have liked? You did 5 not know that? 6 A. I did not know what Richard Jeffrey had advised the 7 Council Leaders at that stage. 8 Q. There are just two further documents I would ask you to 9 look at, please. The first one is CEC00223543. 10 This is another set of papers for another Tram 11 Project Board meeting on 30 June 2010. So we've moved 12 forward now to the summer of 2010. 13 Could you put up on the screen, please, page 27 of 14 that set of papers. Could you highlight, please, the 15 section at the foot of the page. Could you highlight 16 the foot of the page marked "Dispute resolution". 17 Now, by this stage, another adjudication decision 18 had been received on 24 May 2010 in relation to what's 19 described as section 7 drainage. I think it's also 20 described elsewhere as section 7(a) track drainage. 21 That's dealt with in the fourth bullet point. Do you 22 see that? 23 A. Yes. 24 Q. What is recorded there is that the adjudicator decision 25 on section 7 drainage was received on 24 May and 40 1 supports Infraco as to the existence of change in one 2 section. It goes on to talk about value being 3 ascertained with final resolution expected as being 4 650,000 to 750,000. Do you see that? 5 A. Yes. 6 Q. Insofar as that records that the adjudicator's decision 7 supported Infraco as to the existence of change, which 8 was what the adjudication was about, it entirely 9 accurately records the decision of the adjudication? 10 A. I wouldn't challenge the factual information that's 11 presented in it. I'm not sure it's presented in the 12 most helpful way. 13 Q. Had you seen this document before I referred you to it 14 just now? 15 A. No. 16 Q. Finally, can we look at document number TIE00896978. 17 This is another set of Tram Project Board papers. We 18 have moved on now to the end of 2010, to 15 December. 19 Do you see that? 20 A. Yes. 21 Q. Could you go to page 31 of that set of papers, please. 22 Could you highlight the dispute resolution section. 23 Can we get the whole of that, including the table. 24 I apologise. Just to the foot of the page. Thank you. 25 Now, by this stage, in November 2010, an 41 1 adjudication decision had been issued in relation to 2 Landfill Tax. Do you remember that? 3 A. Not in great detail, but yes. 4 Q. If I were to suggest to you that the essence of the 5 dispute between TIE and the consortium was whether or 6 not the consortium should have applied for an exemption 7 for Landfill Tax, does that jog your memory? 8 A. Not greatly, but I accept that, yes. 9 Q. What is recorded here is in the third paragraph: 10 "During the period, Landfill Tax was adjudicated and 11 a decision provided. The adjudicator decided that the 12 landfill would not have been exempt and therefore there 13 was no need to apply for the exemptions." 14 Putting it another way, Infraco won. 15 A. Yes. 16 Q. Again, had you seen this document before I put it to you 17 just now? 18 A. No. 19 MR FAIRLEY: Thank you, my Lord, I have no further 20 questions. 21 CHAIR OF THE INQUIRY: Thank you very much. Mr Anderson, 22 you're free to go. You are still under your citation, 23 but hopefully we won't need to recall you at any stage. 24 If that does happen, Ms Fraser will be in touch. 25 A. Lord Hardie, I just wanted to say a word or two. This 42 1 is an unusual process in which you are interviewed and 2 then given a statement, but I do understand the need to 3 hold all those accountable who were involved in the tram 4 process, myself included in that. I would say that 5 I know a lot of the key protagonists in this pretty 6 well, and that those are people who care passionately 7 about Edinburgh and wanted to do their best on the part 8 of the city. 9 I think they made mistakes and took decisions that 10 weren't in the best interests of progressing the 11 project. I think there's a difference between people 12 who made mistakes in good faith on the basis of the 13 information that they had, people like Jenny Dawe and -- 14 CHAIR OF THE INQUIRY: I think that's a matter ultimately 15 for me. I do appreciate the difference between people 16 making mistakes and people deliberately misleading other 17 people. I do appreciate that. I will take into account 18 all the evidence and I'll form a view what I think of 19 the situation. 20 A. I understand that. 21 CHAIR OF THE INQUIRY: Thank you. 22 A. Okay. Thanks. 23 (The witness withdrew) 1 INDEX 2 PAGE 3 MR DONALD ANDERSON (continued) .......................1 4 5 Examination by MR LAKE ........................1 6 7 Examination by MR FAIRLEY. ...................18 8 9 MR IAIN WHYTE (sworn) ...............................44 10 11 Examination by MR LAKE .......................44 12 13 Questions by CHAIR OF THE INQUIRY ............99 14 15 MR JEREMY BALFOUR (sworn) ..........................104 16 17 Examination by MR LAKE ......................104 18 19 Questions by CHAIR OF THE INQUIRY ...........146 20 21 22 23 24 25 149