1 Friday, 13 October 2017 2 (9.30 am) 3 CHAIR OF THE INQUIRY: Good morning. 4 MR MACKENZIE: Good morning, my Lord. The next witness is 5 Jason Chandler. 6 MR JASON CHANDLER (sworn) 7 CHAIR OF THE INQUIRY: Could I ask you to listen to the 8 question, and if it's capable of being answered yes or 9 no, if you would give that answer, and then if you want 10 to qualify it, do that afterwards. 11 Could you speak clearly sufficiently loudly so that 12 everyone can hear you and the shorthand writers can keep 13 up with you. 14 Examination by MR MACKENZIE 15 MR MACKENZIE: Good morning. 16 A. Good morning. 17 Q. Could you state your full name, please? 18 A. It's Jason Roy Chandler. 19 Q. And your current occupation? 20 A. I'm the engineering director for Balfour Beatty power 21 transmission and distribution. 22 Q. I would like to look at a CV you have provided to the 23 Inquiry. The reference number is CVS00000054. We can 24 see about halfway down, under education, we see you have 25 a degree in civil engineering. Then we also see, if we 1 1 can go, please, then to page 3, to have a look at some 2 of the problems and work you've been involved in. 3 Page 3, just reading up from the bottom, we can see 4 while employed by Parsons Brinckerhoff you have been 5 involved with the Croydon Tramlink project, and then one 6 up, we see involved with the CrossCountry route 7 modification. So that's heavy rail, I think; is that 8 correct? 9 A. That's correct. 10 Q. Further up we see involved in the Midland Mainline. Is 11 that again heavy rail? 12 A. Yes. 13 Q. And then further up we see reference to the 14 Midland Metro extension. We then further up again, we 15 see the Merseytram system, and we see you were involved 16 there. What are the dates? They seem to be 2004/2001 17 to 2006. 18 A. That should have been 2004 to 2006. Yes, that's right. 19 Q. Thank you. Then if we go back to page 2 we will see 20 your involvement with the Edinburgh Tram Project at the 21 bottom of the page. Thank you. 22 We can see you were Project Manager whilst employed 23 by Parsons Brinckerhoff on Edinburgh Tram Project 24 between February 2006 and December 2011. We can put the 25 CV to one side now, thank you. I would like to turn to 2 1 the written statement you have provided to the Inquiry. 2 I think there's a hard copy in front of you. We will 3 bring it up on screen. The number is TRI00000027_C. 4 I should take you to the signature, please, the last 5 page at 177. 6 Can you confirm, please, that is your signature and 7 that it's the written statement you have provided to the 8 Inquiry? 9 A. Yes. 10 Q. Thank you. Mr Chandler, your evidence to the Inquiry 11 will comprise both the written statement in its entirety 12 and the evidence you give today. 13 Now, starting with the statement, please, I would 14 like to look at your initial involvement with the tram 15 project and just get an overview of certain matters. If 16 we can go to page 1, please, of the statement. 17 Now, in paragraph 1, in the second sentence, where 18 you say: 19 "I started on the Tram Project in September 2006..." 20 Should that be February 2006? 21 A. That's correct. 22 Q. You explain you had overall responsibility for the 23 delivery of the design as Project Manager. 24 If we can go then, please, to page 2. 25 In paragraph 4 you say when you started on the tram 3 1 project, your predecessor was Paul McCauley. 2 Why did you replace Mr McCauley? 3 A. It was because I'd got a lot of experience working for 4 PB in the UK. I'd worked on numerous schemes. I was -- 5 I knew the organisation very well. Paul McCauley didn't 6 have the familiarity with Parsons Brinckerhoff or the 7 engineering disciplines and all the individuals 8 involved. He was experience -- there was some 9 challenges that he was facing because of that, and 10 I think at the time it was recognised that me having far 11 greater familiarity with the organisation, it would be 12 easier for me to lead the project going forwards. 13 Q. I think we've seen reference to Mr McCauley returning to 14 America. Was he originally from Parsons America? 15 A. Yes. 16 Q. I see. Did he have any experience of working in the UK 17 at all before his involvement with Edinburgh Tram 18 Project? 19 A. I'm sorry, I can't recall. I don't think so. 20 Q. Did he have any experience at all then in working in 21 light rail schemes in the UK prior to Edinburgh? 22 A. I believe not, no. 23 Q. Do you know if he had any experience at all of working 24 in light rail schemes? 25 A. That I can't recall. 4 1 Q. He was appointed as Parsons Project Manager on the 2 Edinburgh Tram Project; is that true? 3 A. Yes. 4 Q. I think you made mention to there being certain issues 5 or problems. What were those issues or problems before 6 you arrived? 7 A. When I first joined the project, I was asked to do 8 a review of the status of the project, and having done 9 that, I discovered that the problems that had arisen to 10 date, the programme that was in place at the time, 11 I found to be very complicated, overly so. Requirements 12 definition phase hadn't gone as well as 13 Parsons Brinckerhoff had hoped, and there were quite 14 a lot of residual issues around the finalisation of the 15 requirements definition documents. 16 So that was the general -- they were the general 17 issues, and the structure of the team wasn't as I would 18 have established for the project. 19 Q. Thank you. When you refer to the programme being overly 20 complicated, is that a reference to the programme 21 produced by Parsons? 22 A. It is. 23 Q. Thank you. In terms of the structure of the team not 24 being as you would have wanted, what was the issue 25 there? 5 1 A. The division of responsibilities around the team, wasn't 2 very clear. And the route wasn't -- hadn't been split 3 into sections and I -- so the progress and the way that 4 the work was being allocated around the individuals 5 wasn't as clear as I would have expected by that point. 6 Q. Thank you. I'll come back and ask one or two questions 7 about the requirements definition phase very shortly, 8 but just sticking with the introductory overview, could 9 we also then please go to page 4 of your statement. In 10 paragraph 12, we see a reference to Schedule 2 of the 11 SDS Contract. This is dated September 2005. It listed 12 key personnel for the project. David Calver was the 13 original Project Manager who was replaced by 14 Paul McCauley. Did David Calver ever act as Project 15 Manager prior to Paul McCauley? 16 A. I'm sorry, I don't know. 17 Q. We do see, I think, Mr Calver's name in the contract as 18 original Project Manager. I'm just not sure whether he 19 actually acted as such, but your position is you don't 20 know? 21 A. I don't know. 22 Q. Could I then please go to page 5, just sticking with 23 this overview. 24 In paragraph 14 you refer to an SDS Organisational 25 Chart, and you say: 6 1 "There was a core team that was located in Edinburgh. 2 Beyond the Requirements Definition Stage, either sharing 3 office accommodation with TIE when reporting to TIE or 4 subsequently when we were novated into the Bilfinger 5 Berger/Siemens organisation in their office." 6 I'm interested in the question of Parsons staff 7 being co-located with tie in the tie office. Do you 8 remember when that first took place? 9 A. That was at the end of requirements definition. So it 10 would have been from July 2006. 11 Q. I think the requirements -- 12 A. Sorry, from preliminary design, yes. From preliminary 13 design. So at the end of 2006. 14 Q. Do you recall when CEC staff then joined the co-location 15 in the tie office? 16 A. It was very shortly afterwards. 17 Q. So that would have been some time in the second half of 18 2006 perhaps or August/September/October, round about 19 then? 20 A. Yes. 21 Q. Thank you. Then, please, page 7. In paragraph 19 we 22 see, about five lines from the bottom of the paragraph, 23 you say that: 24 "Many of the [Parsons] team transferred to Edinburgh 25 from Merseytram where Parsons was also responsible for 7 1 developing the design of very similar tram systems. We 2 had also delivered similar designs for Midland Metro, 3 Manchester metro, Croydon Tramlink and many of the team 4 had worked on these schemes previously." 5 So it sounds from what you're describing that the 6 design team had good experience of light rail schemes; 7 is that correct? 8 A. Yes. 9 Q. Thank you. 10 The paragraph below that, paragraph 20, deals with 11 its subcontractor, Halcrow. You explain many of the 12 design services were subcontracted work: 13 "Halcrow were our main sub-consultant. Halcrow were 14 responsible for the structural design, the earthworks 15 design, the roads design and the approvals and 16 consents." 17 Were they also responsible for utilities design? 18 A. Yes, they were. 19 Q. Did that really go hand-in-hand with the roads design? 20 A. Yes, it did. 21 Q. Thank you. The question of Halcrow -- if we blow up 22 that paragraph again, please -- being responsible for 23 the approvals and consents, could I check, please, does 24 that mean all approvals and consents for the scheme or 25 approvals and consents in relation to the items they 8 1 were designing? 2 A. It was the items that SDS were responsible for 3 designing. 4 Q. I see. So it wasn't just approvals and consents that 5 Halcrow were designing. It was all designs that SDS 6 were designing? 7 A. That's correct. 8 Q. Thank you. Were Halcrow ever co-located with Parsons, 9 tie and CEC? 10 A. Initially we co- -- the -- at the preliminary design 11 stage, we co-located with Halcrows in their office in 12 Edinburgh. So we had a core team of 13 Parsons Brinckerhoff and Halcrows co-located, and then 14 when we moved to -- moved to CityPoint, to co-locate 15 with tie, it was mainly the Parsons Brinckerhoff team, 16 but supported very strongly by Halcrows because their 17 office was in Edinburgh anyway. So they came and 18 visited the office as and when. 19 CHAIR OF THE INQUIRY: Were Halcrow essentially 20 transportation engineers or did they have other 21 disciplines? 22 A. They have a fantastic structural design team, the roads 23 detail design team. The approvals and consents team was 24 a dedicated bunch of individuals to support that as 25 well. So they had quite a broad mixture of skill sets. 9 1 CHAIR OF THE INQUIRY: Why did you use them? 2 A. They had a very strong local presence in Edinburgh, 3 which fitted very well with us. They knew Edinburgh 4 very well because of their geographical location. 5 They knew Edinburgh Council very well, and their 6 approvals and consents team were very familiar with the 7 requirements of Edinburgh. So it was quite a strong 8 blend between Parsons Brinckerhoff and Halcrow. 9 CHAIR OF THE INQUIRY: Thank you. 10 MR MACKENZIE: Thank you. 11 Might it have been better if Halcrow were also 12 co-located at the tie offices with CEC, given Halcrow 13 were responsible for obtaining approvals and consents? 14 A. It never posed too much of a problem because they were 15 there so regularly. They were literally -- 16 a combination of their team were there on a daily basis. 17 So it might have helped but it wasn't something that 18 became a real problem to us in delivery of the design. 19 They were there pretty much constantly. 20 Q. Did you at any point have any concerns in relation to 21 Halcrow's performance? 22 A. It was a very complex project and very -- required a lot 23 of detailed attention. So there was a lot of -- my job 24 was to keep the design moving and to make sure that the 25 project team were engaged. 10 1 Over the course of the years of the project, that 2 required me to -- on numerous occasions to chase 3 progress, but no more or less than I would expect of 4 a project of this type. 5 So no, it was -- it wasn't something that became 6 a critical issue for us. 7 Q. Now, it has been suggested in the written statement of 8 another witness that an issue here was that Halcrows 9 were disappointed that they had given work to do which 10 was then taken back from them in some way related to the 11 cancellation of phase 1b and that then affected their 12 performance. 13 Do you have any comments on that suggestion? 14 A. No. Initially Halcrow were expected to deliver the 15 structural design for the whole route as well, and one 16 of the first things I did as Project Manager was to 17 negotiate to remove some of those structures and to 18 deliver them by Parsons Brinckerhoff. 19 But no, I don't think there was ever any -- any 20 issues around the removal of work from Halcrow. They 21 certainly didn't voice overly their concerns around 22 that. They knew there was an awful lot of structural 23 design work to do, and Parsons Brinckerhoff taking some 24 of that back, I think, was -- wasn't really questioned 25 by them. 11 1 So no, I don't think the removal of 1b -- 2 I certainly didn't notice any deterioration in 3 performance on their part. 4 Q. Just to clarify that, why were some structures taken 5 back to Parsons? 6 A. At the time I think Parsons Brinckerhoff welcomed the 7 additional work. And also it was a recognition really 8 of the sheer amount of structural work that needed to be 9 done. 10 Q. Thank you. I would like to move on now to page 12, 11 please. Paragraph 42, again, this is just by way of 12 overview and introduction. 13 You've set out the services SDS were to provide 14 under the contract were the Civils and infrastructure 15 design, et cetera. For the track a generic solution was 16 prepared: 17 " ... The power supplies, telecoms systems were 18 developed up to a point of a system design but not the 19 detailed design, because the detailed design required 20 completion and component selection and this was specific 21 to the contractor's proposal and their chosen 22 suppliers." 23 You go on to say at the end: 24 "SDS produced generic designs that could then be 25 populated with specific components." 12 1 So trying to understand the intended approach, was 2 it that there would be many matters where SDS would 3 complete the detailed design, but there would be certain 4 matters where a more generic design would be produced 5 with a view to the infrastructure contractor then 6 populating these matters with their chosen components? 7 A. Yes, that's correct. 8 Q. I'm jumping ahead an awful lot, and we will come back 9 and look at this in more detail, but we have heard 10 evidence of a misalignment between the SDS design and 11 the contractor's proposals on things like trackform, for 12 example, and perhaps OLE. 13 What I'm wondering is: if the initial intention had 14 been that there would be certain items where SDS would 15 produce a generic design that could be populated by the 16 contractor's components, why was there then 17 a misalignment in these items, if the original intention 18 had been that there was an open or generic design that 19 could be populated by the contractor's more detailed 20 component selection? 21 A. At the requirements definition phase of the scheme, 22 a requirements definition document was prepared which 23 set out the -- what the finished scheme system would 24 look like and how it would operate and the performance 25 requirements for that scheme. 13 1 We then used that document to develop -- 2 CHAIR OF THE INQUIRY: Sorry, can you just wait a minute. 3 There's a problem with the equipment for the shorthand 4 writers. 5 Can we have a short break to try and get that back 6 on. We'll adjourn until we're ready to reconvene. 7 (9.50 am) 8 (A short break) 9 (10.00 am) 10 CHAIR OF THE INQUIRY: You're still under oath, Mr Chandler. 11 I'm sorry about the technical hitch. 12 MR MACKENZIE: Thank you, my Lord. Do you remember the 13 rather long question, Mr Chandler, before we broke? 14 A. Yes. 15 Q. What's your answer, please? 16 A. The design that was developed by SDS up to the 17 appointment of the Civils contractor was based on 18 Employer's Requirements that had been developed as the 19 first phase of the scheme by SDS on behalf of tie. 20 The offer that was put forward by -- by the 21 contractor didn't align to all of the Employer's 22 Requirements. We discovered that tie had actually 23 changed the Employer's Requirements during the 24 discussions with -- with the contractors at the 25 procurement stage. 14 1 The contractor had also based their price on various 2 different opportunities that they perceived that could 3 save money and save time in the programme, that also 4 didn't align with the SDS design. 5 So the SDS contract was based on SDS developing the 6 design up to the point of the final selection of 7 components. What actually happened was the changes 8 proposed to that design were far more reaching at the 9 point of the appointment of the contractor. So that led 10 to the misalignment. 11 Q. Thank you. Just sticking with the original intention, 12 what were the specific components the contractor was to 13 provide? 14 A. There's a variety of them. The systems components. So 15 the telecoms systems, the power supplies equipment. 16 Some of the furniture such as the tram shelters 17 themselves. It was items where there were components 18 selection in the trackform. So the trackform was to be 19 selected by the contractor, and the finalisation of 20 design based upon their components. 21 Q. Thank you. I would like to move on very briefly go back 22 to the requirements definition phase. If we could go to 23 page 33 of your statement. In paragraph 126 you 24 explain: 25 "The primary purpose of the Requirements Definition 15 1 Phase was to set the bar for the rest of the scheme, to 2 identify what the performance of the scheme would 3 achieve when SDS had developed the preliminary design, 4 the detailed design and then the contractor's design." 5 The last sentence: 6 "So it set the performance requirements for the 7 backdrop for the development of the design." 8 I think I understand that. 9 To what extent, if any, did Parsons liaise with the 10 City of Edinburgh Council during the Requirements 11 Definition phase? 12 A. That was before my time on the project. So I wouldn't 13 really know the answer to that question. 14 Q. Would you have expected such liaison or would that come 15 at a later stage? 16 A. I think I would have expected a degree of consultation, 17 but the majority of that would definitely come at 18 a later stage. 19 Q. In particular, in the preliminary design phase? 20 A. Yes. 21 Q. Thank you. 22 Page 10, please, of your statement. In 23 paragraphs 33 and 34, you explain that: 24 "With regards to the delay in the signing of the SDS 25 Contract, I joined the project in March 2006." 16 1 Should that again be February 2006? 2 A. Sorry? 3 Q. I'm sorry, you say there you joined the project in 4 March 2006. Should that be February 2006? 5 A. Yes, it should. 6 Q. "I had not been involved at all until that point. I do 7 not know why there was a delay in the signing. 8 I do know that when I joined, the delay resulted in 9 a reduction in time available for the Requirements 10 Definition Phase, as there had been quite a rush to get 11 the submission done for Christmas 2005." 12 If we could then go, please to, page 34, in 13 paragraph 128 you explain that, in the second sentence: 14 "There were a lot of comments issued that were 15 resolved post-Christmas and a lot of rewriting of the 16 documents took place in that time. I became involved in 17 March [2006] ..." 18 That should be February 2006: 19 "... and one reason I became involved was the 20 struggle that was experienced attempting to complete 21 Requirements Definition. These were important documents 22 that set the stall out for the rest of the scheme so 23 I think they were fairly robust by the time I became 24 involved." 25 Then in paragraph 131, a reference to Mr Reynolds' 17 1 email of 26 July 2007 and the comment on the RDP report 2 being poor. You say: 3 "This relates to the original document that was put 4 forward that needed to be rewritten. The first 5 iteration when the first submission was made was not as 6 robust as it needed to be and required additional work." 7 What were the problems with the original document or 8 documentation in the requirement definitions 9 deliverables? 10 A. It wasn't as complete as it needed to be. It didn't -- 11 it didn't set the stall out as well as it needed to. It 12 wasn't as precise as it needed to be. 13 So it would have been open to interpretation. It 14 wasn't complete. It was completed very quickly 15 afterwards though. 16 Q. So that was something you did when you joined, you 17 addressed that problem? 18 A. No, I just managed the finalisation of that, and by the 19 time I joined the project, it was -- it was literally at 20 the point where it was ready to be resubmitted. So 21 I didn't really have a great deal of input to that. 22 The team that were there were very capable and very 23 confident about writing the Requirements Definition. So 24 I didn't need to bring in additional resources. It was 25 just the time factor of completing that Requirements 18 1 Definition phase and it was very quickly addressed and 2 a line was drawn under that very quickly. 3 Q. So I think what happened was that the original 4 Requirements Definition Deliverables were delivered in 5 December 2005. You've described a process of some 6 rewriting to complete the documents. So what happened? 7 Were the revised documents then submitted to tie as part 8 of an extended Requirements Definition phase, or rather 9 did the rewritten documents then become part of the 10 preliminary design phase? 11 A. Yes, they were submitted as part of the preliminary 12 design phase. 13 Q. So essentially any issues in relation to the 14 Requirements Definition Deliverables were carried 15 forward and addressed during the preliminary design 16 phase? 17 A. Yes. 18 Q. Now, we've heard that in an ideal world, when designing 19 something and going through various phases or stages, 20 it's better -- in an ideal world one would stop at the 21 end of each stage and get agreement on that stage and 22 those deliverables. So one has a fixed baseline before 23 then moving on to the next stage. 24 Do you agree with that as a general proposition? 25 A. Yes. 19 1 Q. It sounds from what you've described as though that 2 didn't happen in this case in relation to the 3 Requirements Definition Deliverables; is that correct? 4 A. That's correct. 5 Q. Did that have any ongoing impact on the scheme, or do 6 you consider the matter was satisfactorily addressed in 7 the preliminary design deliverables in the way you 8 described? 9 A. No, I don't think it significantly impacted on the 10 delivery of the preliminary design phase. It was a very 11 small number of people who were addressing the 12 Requirements Definition documents. And the broader team 13 continued to deliver the Requirements Definition. 14 We were very closely linked as a team. So the team 15 that were delivering the preliminary design weren't 16 negatively impacted by the lack of the finalisation of 17 that Requirements Definition Phase document. 18 Q. Thank you. So you certainly were satisfied that come 19 the preliminary design deliverables, any outstanding 20 matters from the Requirements Definition Phase had been 21 sufficiently addressed and were fully specified in the 22 preliminary design deliverables? 23 A. Yes. 24 Q. Thank you. Now, during the preliminary design phase, 25 which must have been between January and June 2006; is 20 1 that correct? 2 A. Yes. 3 Q. Can I come back again, please, to, again, the question 4 of what liaison, if any, was there with the City of 5 Edinburgh Council to clarify their requirements, in 6 particular in respect of planning matters? 7 A. Yes, we started consulting with City of Edinburgh 8 Council. We weren't co-located at that point, but we 9 were having numerous discussions with City of Edinburgh 10 Council around issues like the roads alignment, the 11 tram stop configurations, and the structural 12 requirements. 13 So there were a lot of consultation meetings ongoing 14 in preparation for the submission of the preliminary 15 design on 30 June that year. 16 Q. Now, in your statement -- I won't take you to it, but 17 paragraph 159 you say: 18 "While SDS were engaged with CEC, I think there 19 could have been more, but we were very confident at that 20 point that we would be able to achieve the approvals and 21 consents at later stages of the scheme." 22 So it's your reference to saying I think there could 23 have been more, what did you mean by that? 24 A. I think the -- the co-location, right from the very 25 start of the scheme, would have definitely helped and 21 1 would have perhaps pulled -- drawn out some of the 2 problems that we experienced later earlier. 3 So at the point where we did co-locate and we were 4 having daily discussions with CEC, I think if that had 5 happened right from the very start, there would have 6 been an opportunity to have identified some of the 7 issues that came later and that triggered the likes of 8 the charrette process that happened later on in that 9 year. 10 Q. Thank you. Trudi Craggs, do you remember her? 11 A. Yes. 12 Q. She gave evidence that there had been a number of 13 changes made to design in late 2005 as a result of the 14 parliamentary process. These changes were not reflected 15 in the SDS Contract signed in September 2005, and indeed 16 these changes were not taken into account in the design 17 until she had what she described as a brain dump session 18 with Parsons designers around March/April 2006 and 19 explained these changes which she said seemed to come as 20 news to Parsons. Do you have any recollection of that 21 brain dump session and the issues she's referring to? 22 A. Yes, I do. 23 Q. Can you tell us about that, please? 24 A. There were various agreements that were made with the 25 various interested parties, and stakeholders in the 22 1 scheme, that were settled through negotiation during the 2 close-out of the parliamentary process. 3 We weren't involved with that process, and the 4 outcomes of those various different agreements were 5 collated and presented to us around March/April time of 6 that year, which was obviously quite a way into the 7 preliminary design phase for us at that point. 8 Q. Were all of these agreements and changes incorporated 9 into the preliminary design deliverables which were 10 delivered at the end of June 2006? 11 A. Yes, we worked very hard to incorporate as many of those 12 changes as possible. We were confident that they 13 weren't going to impact the detailed design and that 14 anything that was left, we could have incorporated into 15 the detailed design, such to the point that when we 16 developed the programme at that point beyond June 2006, 17 we didn't put a hold point in the programme to catch up, 18 if you like, with those issues. We just agreed to take 19 them forwards into the detailed design stage of the 20 project. 21 So we were very confident that we'd wrapped them 22 in -- or could wrap in anything that was left that we 23 hadn't done to date. 24 Q. Just to clarify that, in relation to any changes as 25 a result of the parliamentary process, were all of those 23 1 changes incorporated in the preliminary design 2 deliverables or were some to be dealt with later during 3 the detailed design phase? 4 A. I can't honestly remember if we wrapped -- if we managed 5 to include them all at that point. But I was certainly 6 very happy that we'd made provision for them at that 7 point, even if we hadn't made changes to all of the 8 drawings. 9 Q. Thank you. We know that preliminary design was 10 submitted at the end of June 2006, which I think was in 11 accordance with the required timescale. 12 Could I then please go to page 17 of your statement. 13 In paragraph 59, at the top of the page, you say: 14 "There was also a lot of pressure from TIE to move 15 forwards with the detailed design." 16 Why was there a lot of pressure from tie? 17 A. It was recognised that it was a tight programme, and 18 that we needed to -- we needed to get moving with the 19 detailed design in order to meet their overall project 20 programme. 21 Q. You go on to say that: 22 "SDS had already agreed during the preliminary 23 design phase that we would not wait for the 20 days for 24 the tie comments on the preliminary design. SDS would 25 proceed into the detailed design phase and then any 24 1 comments that were issued would be addressed during 2 detailed design development. The project did not have 3 the time to wait even for the 20 days to proceed with 4 the detailed design." 5 Is what you're explaining there, is that a departure 6 from what one would do in an ideal world of sending out 7 the preliminary design, waiting for comments to come 8 back, perhaps require some revision of the preliminary 9 design, but then have a fixed and agreed preliminary 10 design baseline from which to move forward? 11 A. Yes, that's correct. 12 CHAIR OF THE INQUIRY: How long did it take tie to comment 13 on the preliminary -- they had 20 days -- but you 14 indicated you would start work on the detailed design. 15 Did they deliver within 20 days? 16 A. No, it was significantly longer. We received a report 17 back that had been produced by TSS in December of that 18 year. December 2006. 19 CHAIR OF THE INQUIRY: So that's almost six months, is it? 20 A. Yes. 21 CHAIR OF THE INQUIRY: Did that impact upon your programme 22 of detailed -- detailed design? 23 A. We received various comments back over the course of the 24 five-and-a-half months in between the submission and the 25 report coming back from TSS. We were extremely 25 1 confident in the quality of the preliminary design 2 submission that we had made. So at that point I wasn't 3 overly concerned at the delay in the receipt of the 4 comments, but we did start to receive negative comments 5 from tie to say that the preliminary design hadn't met 6 their expectations. We were very keen to see the 7 detailed comments back to understand exactly what they 8 were referencing in those comments. 9 So when -- my concern started to grow over those 10 four or five months until we received the report back 11 from their engineers. 12 CHAIR OF THE INQUIRY: Thank you. 13 MR MACKENZIE: Thank you. 14 Page 42, please, of the statement. In the third 15 sentence from the top you say: 16 "Under normal circumstances, if I thought there was 17 a significant risk of a huge amount of rework, I would 18 have insisted that we pause to avoid progressing the 19 detailed design only later to find that we had 20 progressed a lot of abortive work because the 21 requirements had changed or the client would not accept 22 the preliminary design for some reason." 23 What are you saying there? Are you saying there 24 that usually you would have insisted on a pause and 25 agreement on the preliminary design before going on to 26 1 detailed design, or are you saying: this contract, 2 because of the pressure to make progress, I had to 3 depart from that; or are you saying that actually here, 4 at this moment, you didn't have concerns about not 5 pausing to agree and fix the preliminary design? 6 A. It's the latter. I was confident with what had been 7 done to date and the direction of travel that we had 8 achieved to June 2006. I would have preferred that we'd 9 have had agreement of the preliminary design. 10 At the point that it was submitted, we weren't aware 11 that there was going to be a delay in the response to 12 the comments. So we were expecting within very short 13 order to have received the comments back on the design 14 that we had produced at the preliminary design stage. 15 That didn't happen. 16 But at that point I had made it quite clear, and 17 I had had discussions with tie that we were confident in 18 what we'd done, and that we would move on into the 19 detailed design, and then any comments that we received 20 back, we would address during that phase. 21 Q. Looking back now, and knowing -- the benefit of knowing 22 what happened next, would it have been better to have 23 paused to agree the preliminary design before moving on 24 to detailed? 25 A. Yes. 27 1 Q. I'm not going to go into the detail of what happened 2 next because you cover it very fully in your statement. 3 For example, in relation to approvals, you say -- 4 I won't go to it -- in paragraph 114, that although SDS 5 had an obligation to secure approvals, SDS could not 6 force a decision to secure the approval, and SDS were 7 left in a loop of providing iterations of proposals for 8 design without having the power to force agreement with 9 third parties. 10 When you referred in your statement to third 11 parties, did that also include the Council? 12 A. It did. 13 Q. You also, at various points in your statement, refer to 14 the impact on SDS and progressing a design as 15 catastrophic. You say the effect on the design was 16 devastating. Progress of the design development was 17 unravelling. It was a huge backwards step. That was in 18 relation to the charrettes at Picardy Place, 19 St Andrew Square, Princes Street tram stops. 20 Shandwick Place and structures, and you say the project 21 unwound in terms of design principles. 22 One matter I should just check with you, please, at 23 page 43, in paragraph 164 towards the end, a reference 24 to initiatives like the charrettes, change orders, 25 planning summits, et cetera. In the next paragraph you 28 1 say: 2 "They were resolved, but over the subsequent four 3 years ..." 4 It's just that reference to "over the subsequent 5 four years" because we have heard evidence that -- 6 CHAIR OF THE INQUIRY: Is that paragraph 165? 7 MR MACKENZIE: Thank you, yes. The first sentence: 8 "They were resolved, but over the subsequent four 9 years ..." 10 Now, we've heard evidence that between approximately 11 February and June 2007, about 80 critical issues were 12 resolved or largely resolved, which then allowed 13 detailed design to make meaningful progress and other 14 witnesses have given -- expressed the opinion that there 15 was about a year's delay in design between June 2006, 16 preliminary design, and then about July 2007, when 17 people could make meaningful progress with detailed 18 design. 19 So I quite understand the 12 months', or year's 20 delay, to the design process. It's your reference to 21 these matters being resolved over the subsequent four 22 years. What are you referring to there? 23 A. In quite a lot of cases, although they were resolved, we 24 were given direction on how to proceed, but many of them 25 weren't actually finally resolved. 29 1 So on numerous occasions on numerous instances in 2 the detail of the resolution and the production of the 3 design, we revisited those decisions, and we had to 4 still work with the various different stakeholders to 5 seek their final approval of the decisions that tie had 6 made in directing us on how to proceed. 7 So until that point in July 2007, we literally had 8 just been going round in circles producing options for 9 what the design -- on how the design could proceed. 10 From July 2007 we were given direction on how to proceed 11 with those critical issues, but it didn't finally 12 resolve them. We still had to go through all of the 13 approvals and the discussions with the parties that were 14 involved with those decisions, and seek their approvals, 15 and that was part of that approval and consent process. 16 Q. Thank you. Are there any particular items you can point 17 to in terms of: where were these problems that didn't 18 actually go away, which items of design did they relate 19 to? Which areas of the tram? 20 A. Picardy Place was a good example where the original 21 design alignment around Picardy Place, we produced 22 a design alignment at the preliminary design stage. 23 During the charrette process it was identified that 24 there might be an alternative alignment. There was 25 a developer, a potential development that CEC were 30 1 looking to try and protect. 2 So the final alignment of Picardy Place went through 3 numerous iterations, and the positions of the tram stop 4 on Picardy Place was moved on numerous occasions. We 5 looked at the roads alignment. The issue there was we 6 were also responsible for the traffic modelling. And 7 Picardy Place is a node in the centre of Edinburgh. So 8 if the traffic flow through Picardy Place is changed, it 9 impacts on the traffic flow across the city or has the 10 potential to. 11 So in the traffic modelling that we were 12 undertaking, junctions like Picardy Place, where there 13 was uncertainty around the development and the 14 finalisation of the design, really hampered us in 15 finalising the design on numerous other junctions 16 potentially. 17 So Picardy Place was one example. There were 18 numerous others. Forth Ports. The airport was another. 19 The tram stop at the airport in particular. RBS 20 tram stop. There were numerous of them. 21 Q. Haymarket? 22 A. Haymarket was another one, yes, and the development at 23 Haymarket junction. 24 CHAIR OF THE INQUIRY: In Picardy Place I think you mention 25 in your statement that there was talk of a hotel -- 31 1 A. Yes. 2 CHAIR OF THE INQUIRY: -- development going at 3 Picardy Place. 4 Did that proposal or possibility arise after you had 5 done some of the design on the basis that there wasn't 6 going to be a hotel there? 7 A. Yes, that's correct. 8 Excuse me. It was one of the charrette specific 9 items, and there was a development -- potentially in the 10 centre of the roundabout at Picardy Place. We developed 11 various options for a gyratory to take the traffic 12 around the proposed development site. That moved the 13 tram stop and the traffic flow was impacted as 14 I mentioned earlier. 15 CHAIR OF THE INQUIRY: Did your traffic modelling then have 16 to take into account the possibility of traffic going 17 into this hotel in the middle of the roundabout? 18 A. Yes. 19 MR MACKENZIE: Thank you. 20 You mentioned, Mr Chandler, the Scott Wilson report 21 produced in December 2006 on preliminary design. 22 It may be suggested that that report gave 23 a qualified acceptance to preliminary design in that 24 a number of issues required to be dealt with in the 25 detailed design phase in order for the reviewer to be 32 1 completely happy with what had been delivered; is that 2 a fair way to put it? 3 A. Yes. 4 Q. So is that another example of issues being carried on to 5 the next phase, rather than stopping to agree the prior 6 phase? 7 A. We -- we were very happy with what we did at the 8 preliminary design stage, and the report that was 9 produced by Scott Wilson concurred with what we -- how 10 the status of the design that we -- we were happy with 11 it. We could move forwards. 12 It sort of concurred that our view, that any of the 13 comments and any of the issues that we'd -- that we had 14 at that point could easily be wrapped up and finalised 15 in the development of the detailed design. 16 There was one exception which was the level of 17 detailed development for the drainage design on 18 phase 1b. And I completely accept that that wasn't 19 where we needed to be. It wasn't to the level that we'd 20 hoped it would be by the time we got to the end of the 21 preliminary design. But other than that, we were happy 22 that we'd delivered that design. 23 Q. I think the report refers to structures as being 24 a matter where there were gaps. Further work was 25 required; is that correct? 33 1 A. Yes, but we were very early in the development of the 2 structural design, and it was not of great concern to us 3 because most of the detail around the structures 4 happened during the detailed design phase. We got the 5 size and the concepts and the dimensions for the 6 structures. So it was not that we were necessarily 7 behind. It was just the level of detail that we'd got 8 to for the preliminary design. Sometimes you might 9 expect more, sometimes less, but we were happy we could 10 easily deliver those structures during -- and develop 11 the detail throughout the detailed design phase. 12 Q. Thank you. Then on, please, to page 51 of the 13 statement. In paragraph 197 at the bottom you say: 14 "As a designer, SDS would have preferred to say we 15 will step back. Let all parties make all the decisions 16 based upon what they want and then we re-engage and 17 complete the design." 18 One can quite see the logic in that position. You 19 go on to say: 20 "But, due to the procurement process, we had to 21 proceed. SDS were being pressured to deliver the 22 programme and to stick to that programme, but we had 23 many critical decisions that were still outstanding." 24 In short, does what you say there really sum up the 25 common theme throughout this period from the start of 34 1 the SDS contract up until SDS novation? 2 A. We had thought during the preliminary design stage that 3 the concept design and the concept of the route and the 4 positions of the tram stops and the outline layouts of 5 all the traffic junctions had actually been resolved 6 during the parliamentary process, and the key that CEC 7 and tie had actually reached a point that they were 8 happy with those, and it was the development of the 9 preliminary design and into the detailed design. It was 10 only really after preliminary design that we realised 11 that that wasn't actually the case, and a lot of the 12 decisions that had been made previously and the layouts 13 that we'd received weren't as agreed and fixed that we'd 14 thought. 15 So yes, at that point, from then onwards, at the end 16 of preliminary design, I think that's true. We would 17 have ideally have liked to have a very clear set of 18 guidance notes almost on how the design should be 19 completed. But that didn't happen. 20 Q. Thank you. I would like to clarify one matter at 21 page 60 of your statement, please. In paragraph 227. 22 It's the second sentence where you say: 23 "We always tried to be as professional as we could 24 and it was very difficult at times because we were being 25 pressured to deliver the output but did not yet have 35 1 some of the basic building blocks to proceed with the 2 design. There was a fundamental lack of understanding 3 by TIE of the interfaces and the impact of the lack of 4 key decisions." 5 Could you explain, please, what was the -- what were 6 the interfaces that tie didn't understand? 7 A. The introduction of a tram system into a city such as 8 Edinburgh is extremely complex. The biggest issue for 9 us was the interface between the track and the roads. 10 It was our job to try and minimise the amount of 11 disruption and associated highway works by very careful 12 positioning of the track. The alignment of the track 13 was key. If we put the track too high, it meant that 14 the road alignments had to be changed significantly, 15 which could impact on the buildings adjacent to those 16 roads, the footpaths, and cause significant disruption 17 to the traffic movement around the city. 18 So that was just one element of the tram 19 infrastructure interface. The other interfaces such as 20 we had to install duct banks to carry all of the 21 communications and the power supplies for the tram. The 22 tram stops themselves. There are extremely tight 23 tolerances for the alignment of the track in relation to 24 any adjacent structures or the tram stops themselves. We 25 also had to have very strict control over the tolerances 36 1 of the track for the tram vehicle itself to proceed 2 safely through the city. 3 They are just a few examples of the interfaces. So 4 just moving one small element of the infrastructure such 5 as a tram stop, just by a couple of metres, could have 6 significant impact on all of those other disciplines and 7 all of those other parts of the infrastructure, and also 8 the existing infrastructure around Edinburgh. 9 So as a team, one of our biggest jobs was managing 10 the interfaces around that team, and ensuring that any 11 changes that were made to just one discipline or one 12 part of that infrastructure rippled through the rest of 13 that design. 14 Q. Now, when you say there was a lack of understanding by 15 tie of the interfaces, who within tie had that lack of 16 understanding? Was it particular positions or teams 17 within tie that didn't understand that, or as an 18 organisation? What do you mean by that? 19 A. In terms of the experience, we had a very experienced 20 technical team for the delivery of the tram and 21 infrastructure. tie had Scott Wilsons TSS as their 22 engineers, but they had a very small number of people. 23 Certainly a very small number of people working directly 24 on the project. 25 tie themselves had some very good engineers, and 37 1 some very good people working on the team, but in terms 2 of their tram experience I think they relied very 3 heavily on the support from TSS but that was a very slim 4 support structure. 5 So for us it was -- it was very difficult trying to 6 explain how a very small change to one part of the 7 infrastructure could have a very significant impact on 8 the design that had already been completed or all the 9 concepts that had gone before it. So that became a real 10 problem for us. 11 Q. Thank you. In any event please go on to page 67. In 12 paragraph 262, about a third of the way down, a sentence 13 towards the right-hand side says: 14 "The client (TIE) would be expected to manage the 15 entire process and be the Programme Manager, as in the 16 case of Edinburgh Tram. Through the Tram Project Board 17 I would have expected all parties to be responsible for 18 progress, TIE, Transdev, CEC, etc. The leadership 19 and decision making process is the responsibility of the 20 Project Director and Project Board as collectively they 21 have the influence required within the local authority, 22 stakeholders, etc to drive the project. They 23 also have the power to escalate issues for resolution. 24 This was a failing on the tram scheme and many issues 25 festered for months and years that should have been 38 1 escalated and resolved at senior levels much earlier. 2 This could have resulted in the completion of the design 3 prior to appointment of the contractor potentially 4 avoiding much of the conflict and dispute that 5 followed." 6 So I think what you're pointing to here was a need 7 for the Tram Project Board to sort these matters out; is 8 that correct? 9 A. That's correct. 10 Q. Do you know why that didn't happen or didn't seem to 11 happen? 12 A. As the designer, it was pointed out to us by many people 13 from CEC and tie that it was our responsibility to 14 deliver a design that was acceptable and could be 15 approved by not just CEC and tie, but all of the other 16 stakeholders of which there were many. 17 What I'm stating here is without that collective 18 determination to deliver the tram system in the 19 timescales that we were faced with, we as the designer 20 just hadn't got the power to force third parties to 21 accept the design, and because many of those third 22 parties had differing requirements and different sets of 23 objectives as their individual business, for example, 24 a lot of them conflicted. We just -- we struggled with 25 those conflicting requirements, and I think the 39 1 leadership that I talked about there was -- I would have 2 expected to see far more drive and leadership to try and 3 get us into a position where we could secure those 4 approvals and consents. As the designer just producing 5 option after option, hoping that eventually we would 6 find one that was acceptable to everybody, was 7 incredibly challenging, and sometimes there were 8 mutually exclusive sets of requirements from the 9 developers, the Council themselves, tie, that we really 10 struggled to overcome and come to an acceptable 11 solution. 12 Q. I would like to go next to page 36 of your statement. 13 In paragraph 136, about halfway down, you say: 14 "If a review of that preliminary design is 15 undertaken the vast majority of what was actually built 16 was entirely in line with that preliminary design that 17 SDS submitted in June 2006. All of the optioneering, 18 charrettes and alternatives considered post this 19 submission amounted to very little change post 20 June 2006." 21 Then the next paragraph, paragraph 137, you say: 22 "All the work that had been done through the public 23 inquiry and the parliamentary process and then the 24 requirements definition and preliminary design was 25 robust and if reviewed against what has actually been 40 1 built, it is almost entirely in line with what was 2 achieved up to June 2006. Most of the optioneering that 3 was undertaken post June 2006 amounted changed very 4 little in most cases." 5 Lastly, the next paragraph, paragraph 138: 6 "If the preliminary design as it was in June 2006 7 had been developed into a detailed design, it would have 8 delivered what has been built now with few exceptions, 9 avoiding delays and cost resulting from the optioneering 10 and charrettes." 11 So what you're describing there, Mr Chandler, is 12 essentially that what occurred between the delivery of 13 the preliminary design at the end of 2006, and then if 14 I can call it restarting detailed design in July 2007, 15 that whole year period was largely pointless? 16 A. There was a lot of wasted time in that period, yes. 17 Q. And if instead work had been concentrated on agreeing 18 things and progressing the detailed design, then no 19 doubt the detailed design could have been at a far more 20 advanced stage than it was at the time of the 21 negotiations for contract close? 22 A. I'm very confident that's correct, yes. 23 Q. Now, I'm not going to go back over the question of the 24 resolution of critical issues between roughly February 25 and June 2007. We looked at that before, and you 41 1 described how some underlying issues reappeared later 2 because of the need to see agreement from third parties. 3 I think in short, in looking towards the latter half 4 of 2007, I think we can see from the number of 5 deliverables being delivered that things did pick up. 6 There was an improvement, albeit I think there was still 7 some slippage between the target deliverables and what 8 were actually being delivered; is that fair? 9 A. Yes. 10 Q. Can we go, please, to page 118 of your statement. This 11 is a general comment, I think, you make in 12 paragraph 482. You say: 13 "Everything that was done had a knock-on, the impact 14 of moving things around, so there was a suite of 15 drawings, for example, for a tram-stop that also 16 interfaces with the roads drawings, so any small change 17 on the tram-stop drawings impacts on the roads drawing. 18 So there is a constant knock-on impact. For this 19 technical approval the bar was set so incredibly high 20 against a backdrop of trying to get everything done for 21 the Infraco that it was almost a mutually exclusive set 22 of requirements or wishes. CEC wanted a very detailed 23 design, which was impossible to achieve in the 24 timescales TIE wanted to procure the contractor." 25 That approach of CEC that you have set out of 42 1 wanting a very detailed design, as you have put it, 2 setting the bar incredibly high in relation to technical 3 approvals, was that an approach that had been evident 4 certainly throughout the second half of 2006 and 5 throughout 2007? 6 A. Yes, it was. 7 Q. Did that continue into the first few months of 2008? 8 A. That continued right the way through the tram project, 9 all the way through up to Mar Hall resolution. 10 Q. Thank you. I would like, please, then to go into 11 February 2008 and if we go to page 121 of your 12 statement, please. If we can look at paragraph 495, 13 please, and just note in passing the reference to an 14 email exchange in February 2008 about reviewing the 15 impact of the current design status for the Infraco 16 construction programme. It was, I think, an email 17 exchange between Damian Sharp of tie and Steven -- I 18 forget his second name. Steven Sharp. I'm not sure 19 that's correct. There were two Sharps. Over the page, 20 please, page 122, paragraph 496, it's really the last 21 sentence, the second last sentence you say: 22 "Unless there was a step change or a total change in 23 approach from all parties, we were not going to achieve 24 that programme." 25 So it's really just looking at events around this 43 1 time. So around February 2008, and you've explained the 2 approach of CEC of requiring every last detail to be in 3 place. 4 What was your view at that time on whether the 5 design programme in place at around that time was likely 6 to be met? 7 A. We had several meetings with Susan Clark of tie who was 8 trying to resolve the programme to completion. And we 9 identified opportunities and a method to deliver the 10 outstanding design at that point. 11 We thought it was very onerous, but we also thought 12 from our perspective it was achievable if there was 13 a changing approach to the review and the approval of 14 that design. 15 What I want to make sure -- what we weren't looking 16 for was an acceptance of a lesser quality design. It 17 was not that we were trying to put in a substandard 18 design in any way. It was just the likes of the 19 resolution of comments needed to be more collaborative. 20 We needed to understand what the requirements were in 21 order for us to achieve those approvals. 22 So rather than just saying: your design isn't 23 suitable, and it isn't acceptable; and giving, you know, 24 comments as to why it wasn't acceptable; what we were 25 looking for was to understand how we could make it 44 1 acceptable to the approvals bodies. 2 Q. If someone had come to you in February, March, April, 3 May 2008 and said: Mr Chandler, be honest, we know your 4 views on the approach of the Council over the last one 5 and a half years, do you think that's going to change 6 any time soon; what would you have said? 7 A. In hindsight, when it did change and we did get that 8 change in approach, we managed to clear the outstanding 9 comments incredibly quickly. It was a matter of weeks 10 to clear thousands of comments. 11 And it was almost a breath of fresh air. In talking 12 to our designers at the time, it was incredibly 13 satisfying to have that step change of engagement, and 14 that's what we were looking for at that point. 15 I know that I haven't answered your question 16 directly, and I'll answer your question directly. 17 In all honesty if somebody had asked me now, should 18 I have expected them to change, the answer was no. But 19 if they had, we could have cleared it as we did when 20 that step change came very, very quickly and we could 21 have met the programme. 22 Q. But at the time, of course, back in February, March, 23 April, May 2008, given there has been at least one and 24 a half years of a certain approach adopted by the 25 Council, was there any reasonable basis to think that 45 1 was going to change? 2 A. As I mentioned, the meetings that we were having with 3 tie, they clearly wanted to get the programme, the 4 design completed, and we were led to believe that there 5 would be a step change in the approval process. And we 6 reflected that in the Novation Agreement. We actually 7 wrote a schedule to say how we'd changed the programme, 8 and what the requirements were in order to achieve that 9 programme. So we'd reduced some of the Council's review 10 periods and that was all done through negotiation with 11 tie. 12 So we spelled out what we needed to achieve it, but 13 did I expect it to happen or could I have reasonably 14 expected it to happen at that point? Probably not. 15 Q. So it would have required a step change primarily on the 16 part of the Council; is that correct? 17 A. And tie in the leadership to resolve the issues. It 18 wasn't solely with the Council. It was tie and their 19 engagement with the Council as well that we really 20 needed for that step change to really happen. 21 Q. So tie required to step up and say to the Council: you 22 can't keep on making changes and making these comments, 23 or this will derail the procurement process? 24 A. It was the programme management element of it that we 25 all -- that we always felt was lacking. 46 1 So this is what happens if you don't do this, was 2 the approach. We expected sort of a more clear -- 3 a more clear direction to the Council of the urgency of 4 the requirements to clear all these comments and to have 5 that level of integration to complete the design. And 6 that wasn't forthcoming. 7 Q. Presumably what is within Parsons' control is actually 8 drawing up the design and handing it over. What you 9 can't control is what happens next. So you can't 10 control CEC, and what view they will take in relation to 11 granting approvals and consents? 12 A. I have already mentioned the amount of interface between 13 the various different elements. So if we receive a set 14 of comments on the roads issues, saying that we don't 15 accept this particular kerb alignment, if we go and 16 change that kerb alignment, what that might mean in many 17 cases is we might have to move the litter bin which was 18 positioned on the tram stop, because it needed to be 19 moved further away from that revised kerb alignment. 20 What that then means is we have got another approval 21 to secure, which is the relocation of the litter bins. 22 It was that interface and that requirement to secure 23 approvals across many different disciplines and on many 24 different sets of drawings that I don't think was ever 25 really appreciated by the leadership team on -- for tie 47 1 and CEC. 2 CHAIR OF THE INQUIRY: Is this essentially you going back to 3 the lack of experience and -- with a tram project? 4 A. Yes, it is. 5 CHAIR OF THE INQUIRY: Could I ask you something else. You 6 mentioned that the detailed design could have been much 7 further forward if the period of almost a year hadn't 8 been lost, if I can put it that way. 9 Is it possible for you to give any view as to the 10 likely state of the detailed design at contract close, 11 if that year had not been wasted? 12 A. We were entirely confident, even in June 2006, that we 13 could meet the detailed design phase programme. So at 14 that point we were -- yes, we absolutely believed that 15 we could have completed the detailed design up to the 16 point of component selection at the point of the 17 contract award to the contractor. 18 CHAIR OF THE INQUIRY: So that -- if that were the position, 19 then the contract would have taken a different form 20 altogether? It wouldn't have been -- we wouldn't have 21 had -- I don't know if you have seen the contract. 22 A. We only saw parts. 23 CHAIR OF THE INQUIRY: That would have saved a considerable 24 amount of money in the sense that the contractor would 25 not be able to make as many claims in respect of items 48 1 that had not been foreseen? 2 A. Possibly, but the other element that caused the 3 challenge was the contractor putting forwards an offer 4 that wasn't based entirely on our design. 5 So we would have still have had to have coped with 6 that, but it would have been in a much better position 7 to have understood and to be certain where they had 8 deviated or where they'd put in an alternative offer to 9 what was actually completed in terms of the design. 10 So if they proposed to put in a different form of 11 structure for Edinburgh Park Bridge, for example, we 12 could have had a -- we could have compared it much more 13 easily with the approved version of the design as it 14 stood at that point, and you could say that for the 15 whole infrastructure throughout Edinburgh. There would 16 have been a much better baseline in order to assess what 17 the contractor was actually putting forward. 18 MR MACKENZIE: Thank you. I would like to move on, please, 19 to the question of the Employer's Requirements. And the 20 misalignment between the SDS design and the Employer's 21 Requirements. 22 I think you say in your statement -- I won't go 23 through it -- at page 114 and 115, that initially 24 Parsons had concern that the design misaligned with the 25 Employer's Requirements, and that Parsons had developed 49 1 the detailed design and sought the approvals and the 2 consents on the basis of that design. 3 But then if I go, please, to page 119 of your 4 statement, in paragraph 486, you say: 5 "We did a review of the ERs and that is when we 6 identified that, rather than our design not conforming 7 to the ERs, we actually concluded that what we had 8 delivered met the revised set of employer's 9 requirements. The previous ERs were far more onerous in 10 terms of the performance requirements to achieve the 11 solution. So we felt that the ERs had been relaxed; the 12 employer's requirements were not as onerous as they 13 previously were. This opened the opportunity for 14 bidders to provide different solutions that otherwise 15 may not have been acceptable under the previous set of 16 Employer's Requirements." 17 Could you explain that last sentence, please, if 18 possible with examples? 19 A. The Employer's Requirements weren't just written in 20 order to give a guidance for us to develop a design. We 21 almost see them almost as the -- sort of our conscience 22 for the tram system. 23 The Employer's Requirements give details for exactly 24 how the system should perform and various elements of 25 that system. So in developing those ERs, we tried to 50 1 protect the system, not just for the initial 2 construction or the initial operation, but also for the 3 future. 4 So if things like the tram -- the tram and the 5 details of the tram, what we try and do is make sure 6 that in the ERs we don't -- we don't be so prescriptive 7 that there's only one tram that could be procured, one 8 manufacturer's tram, but we also need to make sure that 9 the infrastructure that gets delivered and gets built 10 can suit not just the current tram on offer or trams on 11 offer, but any future trams. 12 So if the fleet changes in 20 years' time, that that 13 can be done safely and other versions of the trams might 14 be able to run on the system. 15 What we found was that some of the ERs had been 16 changed so that they were much more generic. The 17 Employer's Requirements were more generic. They weren't 18 as tightly controlled as we had originally put forward. 19 So the performance of the tram, for example, wasn't as 20 prescribed as we had originally intended. 21 Q. Thank you. When you say that this opened the 22 opportunity for bidders to provide different solutions, 23 would those -- to implement those different solutions, 24 would that have required a change in the SDS design? 25 A. Yes, and that was one of the main misalignments that we 51 1 had at the point of the contractor being appointed on 2 the scheme. 3 CHAIR OF THE INQUIRY: You say they might otherwise not have 4 been acceptable under the previous set of Employer's 5 Requirements. Does that suggest -- are you suggesting 6 that they were inferior? 7 A. I would have to do a -- we certainly felt at the time 8 that the integrity of the system had -- wasn't as robust 9 as it was with the previous set of Employer's 10 Requirements. We thought that that set a very good 11 benchmark, not just for this construction phase, and 12 initial operation, but for the future of the tram. 13 I think, yes, we were concerned that it was no 14 longer as robust a set of requirements, and we'd been 15 delivering a design to try and deliver that very highly 16 and well specified set of requirements that were very, 17 very robust. 18 CHAIR OF THE INQUIRY: Is this a convenient time? 19 MR MACKENZIE: Perhaps two more questions, so I could finish 20 off Employer's Requirements. Thank you. 21 Page 127 of your statement, if I may. In 22 paragraph 523 you explain that: 23 "TIE decided to stick with the Employer's 24 Requirements as they had written them and instruct us to 25 modify the design, if required, as a further stage of 52 1 design development post novation. So we did iterations 2 of a review of the ERs and then we were to pick up any 3 changes post novation." 4 Last point, please. When we go to page 135 of your 5 statement, in paragraph 550, commencing in the second 6 line: 7 "What we were really concerned about, was we became 8 aware that BSC had priced and, through negotiation with 9 TIE, had removed the systems integration element of 10 their offer which ensured that the BBS systems design 11 worked with the SDS design. So typically we designed 12 the civils infrastructure to a point and then Siemens in 13 particular were responsible for introducing their 14 detailed components/selection." 15 A few lines down: 16 "What concerned us was the systems integration that 17 you would normally do, and that the contractors were 18 responsible for, had been eliminated from their scope 19 and that GBP9 million (from memory) had been reduced 20 from their fee that was associated with systems 21 integration. We were concerned now that we were going 22 to be expected to undertake that work on their behalf, 23 which was a significant undertaking." 24 Do you recall, were the Employer's Requirements 25 amended to remove this requirement? 53 1 A. I don't believe they were, but I couldn't be 2 100 per cent sure. 3 Q. But in any event this item was removed from the 4 consortium's offer through negotiation. Obviously 5 Parsons' view was that this item was an item of work 6 that was required; is that correct? 7 A. Yes. 8 Q. Do you know, was that work actually carried out? 9 A. The comments that I've made here were verbal. We 10 obviously weren't party to those detailed negotiations 11 between tie and BSC. 12 The integration work was carried out during the 13 delivery of -- on the finalisation of the design and the 14 introduction of the component selection by a combination 15 of SDS and BSC. So it was done rather more as the 16 design was finalised, and not as we had originally 17 intended, which was to manage the interfaces as a single 18 activity. So it was done more as a progressive 19 activity, rather than -- an emerging activity, rather 20 than as a sort of standalone piece of work, as we 21 thought it probably should have done. 22 CHAIR OF THE INQUIRY: Would that be paid as an extra, then, 23 for SDS and the contractor, would take that as an extra 24 if it had been excluded from the contractor's bid? 25 A. No, we did provide additional services at the point -- 54 1 during the construction phase. And some of that work 2 was associated with the integration of the system 3 components as selected by BSC. 4 But it wasn't identified as a package of work for us 5 to deliver as SDS, no. 6 CHAIR OF THE INQUIRY: When you speak about additional 7 services, would they be above -- over and above what you 8 had contracted to do? 9 A. They would if we had been asked to do them on their 10 behalf. We were never specifically asked to undertake 11 systems integration as an activity post contract award. 12 CHAIR OF THE INQUIRY: Thank you. 13 MR MACKENZIE: Thank you. 14 It sound as though work was, however, done, albeit 15 under a different guise. 16 A. The important thing with -- taking probably the best 17 example is the telecoms and the systems. The system 18 itself as a tram system, the important bit isn't the 19 development of the structures or the track or the power 20 supplies or the telecoms or the signalling or the 21 traffic modelling. It's how it all works together, and 22 it's how it all performs a system that is really, really 23 difficult. 24 We were concerned that without specific and 25 dedicated resource at the level that we would have 55 1 expected -- not been doing that, it would have caused 2 potential problems later on down, particularly in the 3 testing and commissioning phase. 4 As it happened, sufficient work was done because 5 I don't believe there were any significant issues 6 regarding the testing and commissioning. But it was 7 certainly something that we thought needed -- could have 8 had more attention during the final selection of 9 components and the final stages of construction. 10 MR MACKENZIE: Thank you. That would be a suitable point, 11 my Lord. 12 CHAIR OF THE INQUIRY: We will have a 15-minute break for 13 the shorthand writers. So we'll resume again just 14 after -- we will say 11.25. 15 (11.07 am) 16 (A short break) 17 (11.25 am) 18 CHAIR OF THE INQUIRY: You're still under oath, Mr Chandler. 19 MR MACKENZIE: Thank you, my Lord. Mr Chandler. I would 20 like to move on the subject of the Infraco proposals. 21 We have touched on this already. 22 If I could go to your statement at page 130. At 23 paragraph 536, I won't read it out loud, if you take 24 a minute to read what's said there, before we move on to 25 the other paragraphs. 56 1 In paragraph 537 you say: 2 "What concerned us was the wording of the INFRACO 3 proposals suggested that the design was going to be 4 changed to include what had been offered from the 5 contractor, rather than the other way around ... What 6 was becoming evident was that the design would be 7 modified to suit their components. A good example is 8 the track form." 9 What was the issue there? 10 A. The trackform, if I can just talk about Princes Street 11 as a typical location, we were extremely concerned that 12 there were voids under the existing road pavement on 13 Princes Street. So we'd always maintained that 14 a stage 1 reinforced thick concrete slab should be 15 installed to form the basis for the trackform. 16 The tram, as it progresses over the trackform, is 17 a high load, and it transmits vibration through the 18 trackform into the pavement underneath. 19 In reviewing the BBS offer, they were looking to put 20 a very thin trackform, shave the existing road pavement 21 and put a very thin trackform over the top. 22 We were extremely concerned that that trackform 23 would fail under the load of the tram. Maybe not in the 24 first few months or even years, but in subsequent years, 25 due to the presence of voids underneath it that you 57 1 wouldn't expose by just shaving off the top few layers 2 of the road pavement. 3 That became a major point for discussion over 4 numerous months to try and resolve that. We maintained 5 a firm stance on that. 6 Q. Now, on that point, you have explained that Parsons were 7 extremely concerned that there may be unknown voids 8 underneath Princes Street which would require this 9 reinforced concrete block. So that was very clearly 10 Parsons' view? 11 A. Yes. 12 Q. What was that based on? 13 A. That was based on experience, and it was based on the 14 knowledge of the road pavement in other cities and very 15 high likelihood in Edinburgh. 16 The voids are caused by things like broken drains 17 historically. So they might be okay now, but 18 historically a drain might have failed or a service 19 connection, high pressure water connection or even a low 20 pressure one. 21 Then over the course of time, the materials around 22 that broken service start to become washed away, leaving 23 a void underneath. 24 So we strongly suspected that that was likely in 25 Edinburgh. We were deeply concerned that left 58 1 undetected, they might cause a future failure of the 2 trackform. 3 Q. So from what you are saying, tie essentially ignored 4 that advice; is that correct? 5 A. It took a lot of convincing. We maintained a very firm 6 stance, and that was brought into question, and we were 7 put under pressure to change that stance over a long 8 period of time, and we absolutely maintained that we 9 wouldn't change our opinion on that. 10 Q. Who were you put under pressure by? 11 A. From the Project Director through his representatives. 12 I think just a lot of the team members of tie were -- 13 asked us to change our opinion on that particular issue. 14 Q. So the Project Director at that stage was Mr Crosse; is 15 that correct? 16 A. Yes. 17 Q. Other team members; who else? 18 A. There was Bob Bell who was -- he was, I think, managing 19 the risk side of things for tie at the time. Mr Rush, 20 Tony Rush, he was one of the strong advocates for 21 changing the stance to allow a thinner trackform to be 22 used. 23 Q. Are you sure he was involved before financial close? 24 A. No, sorry. Sorry, this was -- that was later. That was 25 later in the process. 59 1 Q. I see. Sticking with before financial close, before 2 financial close was the design as you have described it? 3 A. The SDS design was based on reinforced concrete slab. 4 We'd always had that as our fundamental assumption that 5 that would be required. 6 Q. I see. So what obviously happened was that even at 7 financial close, that remained the design. However, 8 Bilfinger's proposals proposed something different and 9 that was accepted at the time of financial close? 10 A. Yes. 11 Q. That's the misalignment that required to be sorted out 12 later? 13 A. One of the really important points of that misalignment 14 is that SDS took responsibility for the formation up to 15 the underside of trackform. 16 So we still had a significant risk that if that 17 formation failed, and we considered that should look 18 like a reinforced concrete slab, obviously if that 19 failed subsequently, Parsons Brinckerhoff would have 20 been at risk for that failure. We would have been 21 liable for that failure. 22 But irrespective of that, we were offered the 23 opportunity to waive that if we went -- that 24 responsibility, but we refused. We were absolutely 25 adamant that it needed to be a reinforced concrete slab. 60 1 Q. But at the time of financial close, someone in tie must 2 have decided that it was acceptable to accept the 3 contractor's proposals; is that correct? 4 A. I really -- I assume. So I really don't know. But we 5 were adamant that that shouldn't be accepted. 6 CHAIR OF THE INQUIRY: Speaking about financial close, is 7 that right? Financial close as opposed to contract 8 close? 9 MR MACKENZIE: I use the terms interchangeably, my Lord. 10 I mean the close as at 14/15 May 2008. So the same time 11 as SDS Novation, I think I have referred variously to 12 perhaps financial close or contract close or SDS 13 Novation. I mean events in May 2008. 14 At that time, in May 2008, the view very clearly of 15 Parsons was that you were extremely concerned about 16 unknown voids in Princes Street requiring this 17 reinforced concrete block for the trackform. So your 18 view would have been that any price from the contractor 19 should have allowed for that? 20 A. Absolutely. 21 Q. Now, do you consider there was any reasonable basis for 22 having a different view on that matter? 23 A. There had been works undertaken by MUDFA on 24 Princes Street, where they had dug up the road to have 25 a look to see -- to make the changes to the utilities, 61 1 and during those works we went and inspected the 2 excavations to look for evidence of voids, to try and 3 inform the design. 4 We couldn't dig up the whole of Princes Street, 5 which was the only way to really understand exactly what 6 the position was, but based on those excavations that 7 were done by MUDFA, that was the only really intrusive 8 investigation that was undertaken on Princes Street, 9 because of the fact it was such a busy part of 10 Edinburgh. So to close it off to undertake extensive 11 ground investigation would have been very difficult, and 12 also, in order to really be sure that there weren't any 13 voids, you would have to dig all of it up, because it 14 would only take one void to cause a problem with the 15 trackform later down the line. 16 Q. But you'd started there by saying that there had been 17 works undertaken by MUDFA on Princes Street where they 18 had dug up the road to see, and what did they see when 19 these -- 20 A. We found no evidence of voids at that time in those 21 excavations and that reinforced the view from tie in 22 particular, and probably the contractor, that a shallow 23 depth trackform could be used. We never accepted that 24 view. 25 CHAIR OF THE INQUIRY: Did I understand you to say that you 62 1 were offered the option or the opportunity to pass the 2 risk of subsequent collapse to the contractor or to tie 3 itself? 4 A. Yes. It was verbal, but during discussions on this 5 issue we were -- the discussion was along the lines 6 of: if you weren't responsible, if you weren't liable 7 for this, would your stance change? And our answer was 8 always no. We were absolutely adamant that we would not 9 stand by and watch that happen. 10 CHAIR OF THE INQUIRY: Was that because of the possible 11 reputational damage that a tram being derailed in 12 Princes Street and what have you would cause? 13 A. No, it was more about being the conscience of the 14 business. We are very -- we were very conscious that we 15 were the tram experts. We were the ones that had 16 introduced trams into other cities. So it wasn't about 17 the reputational damage. It was more about the risk and 18 our conscience as an engineering team, and as leaders of 19 an engineering team, that we wouldn't have accepted 20 that. 21 It would have caused us reputational damage, but 22 that wasn't our driving force. That wasn't our reason. 23 If we'd have passed the risk and said we want 24 nothing to do with this, and others had done that 25 design, we would still have maintained that that was not 63 1 the right solution. 2 CHAIR OF THE INQUIRY: So it would be a concern about public 3 safety? 4 A. Exactly. And we worked very closely with HMRI, the 5 railway inspectorate, the competent person, and we have 6 got a -- we had a great deal -- we have got a great deal 7 of experience in similar circumstances and we've seen 8 very similar issues before. So we were very -- very 9 confident that this was the right answer. 10 CHAIR OF THE INQUIRY: You've spoken about the lack of 11 experience in tie of a light rail project. Do you know 12 whether Bilfinger had any experience of tram light rail 13 projects? 14 A. The Bilfinger team itself were largely responsible for 15 the Civils elements of the works. Certainly Siemens for 16 their part in the tram track and infrastructure had 17 expertise with tram systems. 18 I'm not so sure that Bilfinger Berger had tram 19 experts on the team, but the structures and the works 20 that they were undertaking were largely in line with 21 most Civils projects. 22 So I wouldn't necessarily have expected them to have 23 needed tram experts to build what -- they should just 24 literally be building what's on the drawings, and that 25 would have been -- as long as they have got the 64 1 experience on the project to do that, I think that would 2 have -- that would have been okay. That would have been 3 suitable. 4 CHAIR OF THE INQUIRY: I was just wondering from the point 5 of view of the risk of the inferior trackform, who would 6 be responsible for that? Would that be Siemens or 7 Bilfinger? 8 A. I really don't know how the risk profile was shared 9 between them going forwards, but if it was -- if the 10 trackform -- if the trackform had failed because of the 11 formation, that was SDS's responsibility. So we 12 designed everything up to the underside of the 13 trackform. So we maintained that that needed to be 14 a reinforced concrete slab up to the underside of the 15 trackform. 16 So it was our risk, if that failed. But that wasn't 17 the reason why we insisted upon it. 18 CHAIR OF THE INQUIRY: No. Thank you very much. 19 MR MACKENZIE: Thank you. Just to close off this point, 20 I fully understand your position, Mr Chandler. To the 21 extent that other parties may have derived comfort from 22 the MUDFA excavations which hadn't shown voids, I think 23 your position is that it would only take one void to 24 derail the tram, in short. 25 A. Potentially. Potentially. One unforeseen void, 65 1 particularly a large span of void that would have 2 caused -- could potentially have caused a problem. 3 Q. So in short, one couldn't reasonably derive comfort from 4 the MUDFA excavations because one would have required to 5 excavate the whole route to be absolutely sure there 6 were no voids anywhere before one could have accepted 7 what the contractor was proposing? 8 A. That's correct. 9 Q. Thank you. 10 Then at paragraph 538, please, you say there: 11 "Another good example, and this is a really 12 important point, is the formation." 13 Is this what we've been talking about or is this 14 something different again? 15 A. This is the same point, but in different -- across the 16 whole route. 17 In undertaking site investigation and ground 18 investigation, until you expose the formation along the 19 route entirely, it's very difficult to predict or 20 understand exactly what the ground conditions are like. 21 So even in the sections that weren't concrete 22 trackform, the ballasted track sections, we advocated 23 the use of a rolling programme of ground investigation 24 to ensure that what we predicted through the 25 interpretation of the SI and GI that we had done along 66 1 the route was actually what they encountered during the 2 construction of the trackform and the other various 3 elements of the tram infrastructure. 4 So we advocated this rolling programme of SI and GI 5 ahead of that -- ahead of the construction to ensure 6 that what we had proposed during the development of the 7 design was suitable. 8 Q. However, I think you also go on to say what was the 9 contractor's proposal on this point? 10 A. The contractor's proposal was a generic proposal of 11 a shallow depth trackform, shaving off the road pavement 12 surface, and the introduction of a standard approach. 13 The key issue there is we knew the depth of the road 14 pavement, so shaving off the upper surfaces of that road 15 pavement wouldn't likely expose any issues that we were 16 concerned about underneath that road pavement. So you 17 wouldn't actually get to the point in the layers of that 18 road pavement where you would actually see the problems 19 that were likely to cause problems later down the line 20 for the performance of the tram. 21 Q. In terms of the SDS approach of this rolling programme 22 of SI and GI investigations, was that proposal for the 23 whole route or only the on-street section? 24 A. No, it was for the whole route. 25 Q. You've referred to the contractor's proposals as shaving 67 1 off the top of the road. What were the contractor's 2 proposals in that regard for the off-street section? 3 A. That was more of a standard solution. So ballasted 4 track. It wasn't anywhere near so much of a risk. 5 The road pavement sections were particularly risky 6 because the road pavement is a rigid pavement. And any 7 vibrations or loads transferred by the tram during 8 operation required that road pavement to be absolutely 9 firm and fixed. 10 On the ballasted track sections, if there are any 11 voids underneath the track that caused the track to 12 settle after the construction could be rectified by 13 routine maintenance, and they would be more visible and 14 less catastrophic, whereas with the road pavement, if 15 there were any void underneath the track, what was 16 likely to happen or potentially could happen is a sudden 17 failure, and one that would be deemed to be 18 catastrophic, where the road pavement would suddenly 19 collapse and the rail would suddenly be -- the alignment 20 of the rail would suddenly be compromised. 21 It's more likely, on ballasted track sections, to be 22 visible and maintainable. 23 Q. Thank you. Over the page, please, page 132, in 24 paragraph 540. You start by referring to 25 a misunderstanding, "a misalignment of where SDS were 68 1 and our knowledge of where we were". You go on to say 2 it wasn't your view, it was rather your knowledge of 3 matters. But then after the bit in italics, you say: 4 "We could see very little opportunity to plane off 5 the existing road, introduce the track, and reinstate 6 the road. This to us was not possible." 7 To pause there, you are, I think, saying that the 8 proposal accepted by tie in that regard was something 9 which SDS considered was simply not possible? 10 A. That's correct. 11 Q. Then I think as things turned out, SDS were proved 12 correct; is that right? 13 A. That's correct. 14 Q. Thank you. I would like now then to move on to the 15 question of contract close or financial close. 16 14/15 May 2008. 17 Could we start, please, by reminding ourselves of 18 the status of the deliverables and approvals at that 19 stage. We can do that shortly by looking at the 20 Novation Agreement which is CEC01370880. 21 If we can go to page 85, please. Do we see -- if we 22 blow up the three boxes, please. We see under 23 paragraph 5.1.2, the Detailed Design Packages status as 24 at 13 May 2008. We can see that 296 out of 329 packages 25 have been delivered. 69 1 To pause there, am I right in thinking that of the 2 296 delivered, not all of them would have received prior 3 approvals and technical approvals? 4 A. That's correct. 5 Q. Then we can read for ourselves in the two boxes beneath 6 that the outstanding -- the approvals and consents that 7 have been achieved and those which were outstanding. 8 Presumably, of the design delivered, some of that 9 design may change as a result of going through the 10 approvals and consents process? 11 A. Yes. 12 Q. And did that in fact happen? 13 A. Yes. 14 Q. Thank you. Then separately, we haven't yet looked, 15 I think, at the design programme in force at this time. 16 So if we can please go to CEC01311101. 17 If we could go to the box at the very top, please, 18 the top left-hand corner at the very top and blow that 19 up a little. Thank you. 20 We see a reference to "Edinburgh Tram Version 31, 21 Actual Progress to Data Date", and the top right-hand 22 corner, we can see the date, 25 April 2008; is that 23 correct? 24 A. Yes. 25 Q. If we go then to the very bottom of this page, I think 70 1 again we will see a reference to "SDS V31 Full Design 2 Programme". If we could then please go over the page, 3 I hope we will see the relevant dates. Go over to 4 page 2, please. Thank you. 5 We see four lines in pink, I think. If we can try 6 and zoom in on the first of those pink lines, if we may, 7 and blow that up as far as we can, please. 8 I think we can see there in the pink line: 9 "Detail Design Submittals to tie." 10 The date at the right is 20 February 2009. I can 11 confirm for my copy, at the top of that column is the 12 word "finish". So I think that's the date it had been 13 planned for SDS to -- we can see under the pink line, 14 "Complete All Detail Design Submittals to tie". We see 15 the date 20 February 2009; is that correct? 16 A. Yes. 17 Q. Thank you. Then zoom back out, please, and look at the 18 next pink line. If we blow that up, please: 19 "Detail Design Prior Approval Batch Submittals to 20 CEC." 21 That is to be done by 29 July 2008. 22 If we can then go to the next pink line, please: 23 "Detail Design Technical Approval Submittals to 24 CEC." 25 That's by 3 November 2008. Then the last pink line, 71 1 please: 2 "IDRs." 3 Is that interdisciplinary or intermediate design 4 review? 5 A. Interdisciplinary. 6 Q. That's to be done by 29 January 2009. 7 So I think we can see in short that the dates for 8 the detailed design prior approval batch submissions to 9 CEC, that was, I think, July 2008. And we have seen for 10 the Detail Design Technical Approvals Submittal to CEC, 11 that was November 2008. Presumably there would then be 12 time allowed for CEC to consider and approve these 13 applications. So if we could then go back, please, to 14 the first pink line and blow that up, so when we see 15 "Detail Design Submittals to tie Complete All Detail 16 Design Submittals to tie" by 20 February 2009, was that 17 with the intention of all design at that stage, all 18 design deliverables, would include all approvals and 19 consents? 20 A. Yes. The final submittal was a system-wide submittal 21 with all of the elements joined together. So yes. 22 Q. All the elements included all consents and approvals? 23 A. Yes. 24 Q. So for this programme to be met, would it be correct to 25 say that back to what we discussed earlier, there would 72 1 require to be a step change on the part of tie and the 2 Council? 3 A. Yes. 4 Q. Thank you. 5 I'll simply refer in passing, without going to it, 6 to a previous programme. Version 26 of the design 7 programme was the one which is referred to in the 8 Infraco Contract in Schedule 15(e). The reference is 9 USB00000083. And at page 2 of that document we will 10 see, I think, that the date for the final deliverables, 11 including approvals and consents, to tie was 12 3 December 2008. So there's a variation of perhaps 13 a couple of months between the two programmes, but we 14 don't have to go to that today. 15 Thank you. We can put that to one side. 16 I think you were sent or have seen a copy of the 17 Infraco Contract Schedule Part 4; is that correct? 18 A. Yes. 19 Q. I think you have seen reference in there to base date 20 design information as meaning design as at 21 25 November 2007; is that correct? 22 A. Yes. 23 Q. Now, if I had come to you in early May 2008, before 24 contract close, and said: we have this date of 25 25 November 2007 called our base date design 73 1 information, I'm trying to identify the different 2 reasons why the design as at that date may change 3 after contract close, can you help me; what would you 4 have said? 5 A. We still had the resolution of the technical issues with 6 the Council, which we weren't entirely confident would 7 not impact on the base date information. 8 We knew that there was misalignment between the 9 Bilfinger Berger Siemens and CAF offer compared to the 10 status of the design at the base date information. 11 We ourselves had been changing and finalising the 12 design and taking on board some of the changes requested 13 of us in the finalisation of those technical and prior 14 approvals, would also have had to have made changes to 15 the design. 16 So there were numerous reasons why that base date 17 information may have changed between the two stages of 18 the appointment of the contractor. 19 Q. We've heard earlier evidence that as at November 2007, 20 about two thirds of the deliverables had been delivered. 21 So that would be a reason, wouldn't it, as well why the 22 BDDI may change to deliver remaining approximately 23 third; is that correct? 24 A. Yes, that's correct. 25 Q. But even of the roughly two thirds that had been 74 1 delivered, I think you explained that that may change as 2 a result of requiring to obtain approvals and consents; 3 is that correct? 4 A. Yes. And to modify the design to reflect the decisions 5 made to resolve those critical issues. So we were still 6 working on the design after that -- after those 7 decisions were made or the direction was given upon 8 which to base our design going forward. So there was 9 a huge amount of design work going on at that point. 10 Q. So even between November 2007 and early May 2007, of the 11 roughly two thirds of design that had been delivered in 12 November 2007, even some of that may have been 13 redesigned? 14 A. Yes. 15 Q. Also I think there may have been a change required after 16 November 2007 to align with the Employer's Requirements; 17 is that correct? 18 A. Yes. 19 Q. Albeit that particular risk may have been lessened 20 because the Employer's Requirements had been loosened or 21 made more generic, is that correct? 22 A. Yes, but we weren't aware of that at that point. We 23 only became really aware of what the implications were 24 later when we did a review of the status of those 25 Employer's Requirements as agreed with -- between tie 75 1 and BSC. 2 Q. Thank you. Again, if any value engineering changes were 3 to be made after contract close, that may result in 4 a change to the November 2007 design? 5 A. Yes, it would. Yes. 6 Q. I think you say in your statement, and I'll come back to 7 this, that in any event there may have been little 8 change made there? 9 A. Sorry, what was the last ... 10 Q. I'll come back to value engineering later. Final 11 traffic modelling. Could that have resulted in a change 12 to the November 2007 design? 13 A. Yes. 14 Q. The question of the interdisciplinary co-ordination of 15 design. Could that have resulted in a change to the 16 November 2007 design? 17 A. Yes. 18 Q. I think we've heard that design is interdependent. So 19 a change to any one item of design may result in changes 20 to other items of design; is that correct? 21 A. That's correct. 22 Q. Are these all things ought to have been known by anybody 23 who has any experience in design, and in particular tram 24 design? 25 A. Yes. 76 1 Q. Would it also be correct to say that any of these 2 changes may affect the design programme? 3 A. Yes. 4 Q. Which in turn may affect the construction programme? 5 A. Yes. 6 Q. Thank you. 7 I would like now to go back to your statement, 8 please -- 9 CHAIR OF THE INQUIRY: Before leaving BDDI, there was also 10 reference in the contract to Schedule H, which was 11 supposed to include a list of the drawings as at the 12 relevant date. Were you aware in fact that the Schedule 13 was blank and that when the contract was signed, that 14 information was never included? Did you know that? 15 A. No. 16 CHAIR OF THE INQUIRY: If you had been asked to produce the 17 list of drawings as at a particular date, would you have 18 been able to do that? 19 A. Yes, and we did. We made several drops of information, 20 or we collated several drops of information for tie to 21 pass to the bidders at the time. So in Q4 of 2007, we 22 collated all of the drawings and we put them on to discs 23 and we labelled what was on those discs and passed those 24 across to tie to use with -- during the bid process and 25 the finalisation of the contractor's prices. 77 1 CHAIR OF THE INQUIRY: So it would have been possible for 2 someone to take the information off these discs and 3 complete Schedule H before the contract was signed? 4 A. Yes. 5 CHAIR OF THE INQUIRY: There would be no doubt as to what 6 drawings everybody was talking about? 7 A. Yes. 8 CHAIR OF THE INQUIRY: Thank you. 9 MR MACKENZIE: Thank you. Then back to your statement, 10 please, Mr Chandler, at page 122. In paragraph 497, 11 this had concerned minutes of a meeting in 12 February 2008, but about four lines up from the bottom 13 of this paragraph, you say: 14 "A position had just been taken by TIE to progress 15 the design. So, we were concerned that design changes 16 would result that would change the design after the 17 INFRACO were procured. That was highly likely." 18 Was that your view at the time or with the benefit 19 of hindsight? 20 A. It was -- it was our view at the time also. We were 21 concerned that with the progress and the experience to 22 date at that point, that we'd had in trying to finalise 23 the design, secure all the relevant approvals, we were 24 extremely concerned that the experience to date was all 25 of a sudden going to change, and that we would be able 78 1 indeed to complete that design in line with those 2 programmes. 3 Q. Thank you. The next paragraph, please, paragraph 498. 4 You say: 5 "The final design packages were not expected until 6 late 2008 that is correct. They would be reviewing 7 a design on the drawings that they received that was 8 potentially going to change, and BSC might not know 9 that, or what was likely to change and how significant 10 those changes were. The due diligence would be based on 11 something that was going to be superseded and their 12 price would be based on something that was going to 13 change. BSC were not actually going to build what they 14 were reviewing during the due diligence process. 15 Critical issues still had to be resolved with 16 stakeholders. We were never sure whether that was 17 expressed to BSC or not." 18 The reference to critical issues still having to be 19 resolved, is that what we discussed earlier this 20 morning? 21 A. It is. Those critical issues, a decision had been made 22 on tie and directed us how to proceed, but we were very 23 conscious that securing the approvals and consents by 24 the stakeholders associated with those decisions was not 25 at that point secure. 79 1 Q. Thank you. On to page 129, please. In paragraph 530 2 you see reference to Schedule Part 4 of the Infraco 3 contract and you say: 4 "I can firstly say that PB needed to see Schedule 4 5 before agreeing the novation agreement because we were 6 aware that the offer had been based on a set of drawings 7 that were actually in many cases likely to be 8 superseded …" 9 Were tie aware that the offer had been based on 10 a set of drawings that were actually in many cases 11 likely to be superseded? 12 A. They were certainly part of the experience. We were 13 co-located with tie at this point. And with CEC. So 14 they were absolutely aware of all of the issues to date, 15 and I fail to see how they could have been concerned 16 that that was all going to change in the space of 17 a very -- two or three weeks. 18 Q. What do you mean by that: 19 "... I fail to see how they could have been 20 concerned that that was all going to change in the space 21 of ... two or three weeks." 22 Do you mean that there would be a closure on these 23 critical issues in particular? 24 A. Yes. They knew that we had to get the approvals and 25 consents, mainly from CEC, and the behaviour in the 80 1 review process wasn't collaborative. It wasn't one of 2 trying to resolve the comments, complete the design, 3 such that the contractor could go and build that design. 4 It was still a largely iterative process of us 5 submitting designs, receiving comments back, us then 6 addressing those comments, resubmitting the designs. So 7 we haven't seen any evidence of a change in the process 8 of review and approval. So we were -- we had several 9 meetings on the programme, and we were reassured that 10 those changes were going to be made, but we never saw -- 11 we hadn't got any confidence that that was going to be 12 the case. 13 Q. Just to be quite clear, we are talking still in the 14 period before contract close on 14/15 May 2008? 15 A. Yes. 16 Q. Thank you. Another page, please. Page 138. In 17 paragraph 561, it starts with a reference to an email 18 chain in April 2008. About six lines from the bottom of 19 the page, a sentence to the right-hand column says: 20 "We saw potential significant changes to the design 21 coming as opposed to just BSC introducing their elements 22 of componentry such as their preferred tram shelter, for 23 example." 24 Now, is that a reference back to what we discussed 25 earlier this morning between the original intention of 81 1 the contractor to introduce certain components, to 2 something having changed now, to where you saw 3 potentially significant changes to design coming? 4 A. Yes, that's correct. 5 Q. I understand. 6 Again, do you consider tie were aware of the risk of 7 significant changes to design coming after contract 8 close? 9 A. Yes, because BSC had included within their proposal some 10 of those changes as a fundamental basis of their -- of 11 their offer. So we weren't aware of all of the 12 potential changes, but we were starting to become aware 13 through the discussions. 14 Q. Then at page 140, please. In paragraph 567 there's 15 a reference to minutes of the Tram Project Board in 16 May 2008, 7 May 2008. You go on to say: 17 "… I would say we shared the view that it was a high 18 risk strategy to enter into an agreement based on 19 a design that was incomplete." 20 Again, is that a view you held at the time or with 21 the benefit of hindsight? 22 A. No, that was a view that was held at the time. 23 Q. Why do you consider it was a high risk strategy? 24 A. Because the design wasn't complete. We knew that 25 Bilfinger Berger had based their prices on design from 82 1 Q4 of the year before. We knew things had changed. We 2 knew that the design at the point of contract signing 3 hadn't progressed in the way that -- the programme that 4 had been included within the final agreement with BSC. 5 We'd slipped further back. So we knew that there were 6 issues around the status of the design. 7 We also knew that the contractor had proposed 8 changes and there was the value engineering proposals. 9 We had spent by this point two or three years 10 negotiating the solutions around the likes of the 11 structures, the trackform, the tram stops, with the 12 various different stakeholders, both statutory and the 13 non-statutory ones. So we were extremely concerned that 14 proposing changes, fundamental changes to those, to 15 deviate away from the design that we had developed to 16 that point was particularly risky. 17 So accepting a price based upon those changes, we 18 saw as particularly onerous. 19 Q. Thank you. Back, please, to page 125. In paragraph 513 20 you say: 21 "We were also concerned that the tempo of the 22 approvals and consents was not what it needed to be due 23 to the very onerous level of detail the CEC were 24 insisting upon to achieve those consents." 25 Is that back to the point you have discussed 83 1 earlier? 2 A. It was throughout. But up to the point of the Mar Hall 3 discussions. That level of detail was -- was -- it was 4 very detailed. 5 Q. Thank you. You also refer to traffic modelling and you 6 say that was -- CEC had always labelled a showstopper, 7 et cetera. 8 Then paragraph 514, please. You say: 9 "There was a conflict between the construction 10 programme and the procurement of BSC and their 11 timescales for commencement of onsite works, versus the 12 actual status of the completion of the design and all of 13 the associated approvals and consents, which we raised 14 on numerous occasions." 15 Is that a reference back to the issue we discussed 16 about the design programme requiring a step change on 17 the part of tie and the Council to achieve the dates? 18 A. It was, and we weren't familiar with the construction 19 mobilisation that BSC planned to do at this point. So 20 we were extremely concerned that they would attempt to 21 mobilise and then not have an issue for construction and 22 approved set of drawings upon which to base their 23 mobilisation and the start of the construction works. 24 Q. Thank you. Now, I would like now to actually pass over 25 the line of contract close and look at events 84 1 afterwards. 2 My main question is: why did it after financial 3 close take so long to complete design and obtain all 4 approvals and consents? 5 A. For the reasons we have already discussed. We had the 6 alignment of the Employer's Requirements. Bilfinger 7 Berger and Siemens had based their offer on a design 8 that we hadn't delivered at that point. They'd also 9 based their offer on the assumption that some of that 10 design and the principles of the design would change. 11 And that they would be able to introduce value 12 engineering opportunities, particularly with the 13 structural elements and the trackform, that we at that 14 point weren't familiar with, and we had grave doubts 15 that that -- they would be acceptable to the various 16 different approvals bodies, or even technically possible 17 in some cases, because of the detailed knowledge we had 18 about the infrastructure. So we had to address all of 19 those VE options. 20 We had our own design to complete by this point, 21 because we still weren't complete at that stage. And 22 the interdisciplinary design checks that I spoke about 23 earlier weren't at this point complete. 24 The traffic modelling had always been a major issue 25 for us, and CEC were very protective over the approval 85 1 for that -- the traffic modelling and the flow of the 2 traffic around the city centre. 3 We were extremely concerned about that, and the 4 possibility, and that took a huge amount of time to 5 resolve, because it's not just demonstrating the traffic 6 model. Every time we made a change to the traffic 7 junctions or the sequencing or even the layouts of the 8 junction, the lane configuration, it impacts on the 9 traffic modelling. So all of these things, it's the 10 system rather than individual components or individual 11 parts of that system that took the time. The thing as 12 it all worked together. That's really what took the 13 next couple of years to resolve. 14 Q. Thank you. Now, you mentioned that -- I think you said 15 you had grave doubts, or SDS had grave doubts about the 16 value engineering opportunities in relation to 17 structures and trackform; is that correct? 18 A. Yes. 19 Q. Did you have those grave doubts before contract close? 20 A. I don't think we were aware of exactly what those VE 21 proposals were at that point. We certainly hadn't done 22 any significant amounts of review. We weren't asked to 23 qualify whether they were acceptable or could be adopted 24 or not at this point. It became an issue for resolution 25 after contract award in the misalignment workshops that 86 1 took place afterwards. 2 Q. So before contract close, are you aware whether tie had 3 any reasonable basis for believing the value engineering 4 proposed savings and structures and trackform were 5 realistic? 6 A. I wasn't involved in their detailed review of them. So 7 I think it would be unfair of me to comment. 8 Q. Could I also ask, please, we know that an important and 9 fundamental dispute arose between tie on the one hand 10 and the contractor on the other. You're aware of that 11 dispute, I take it? 12 A. Yes. 13 Q. To what extent, if at all, did that dispute affect the 14 completion of design and obtaining approvals and 15 consents? 16 A. It was -- it was significant. tie had obviously 17 accepted an offer from BSC, which was based on their 18 proposed changes to the design, and when we got involved 19 with the detail of those proposed changes, they were at 20 conflict with the basic assumptions in some instances of 21 our design development to date. 22 So those prices all of a sudden became at risk, and 23 obviously there was a lot of resolution required to 24 understand how much of the offer that had been put 25 forward by BSC could actually be constructed and how 87 1 much of it was not suitable for various reasons. 2 Q. Is it that that then had an impact on you getting on and 3 completing design? 4 A. Yes. 5 Q. Were you essentially awaiting instructions on what 6 design you were to do? 7 A. Yes, we went into the misalignment workshops after 8 contract award. And the intention -- our intention to 9 that point, in the programmes you have already referred 10 to, was just to complete the design process and the 11 works that we had visibility of, and by this point we'd 12 had lots of discussion with all of the various different 13 approvals bodies as well as tie, and the likes of BAA 14 and SRU, the parties directly impacted. 15 So our view at that point was to get that work 16 completed. 17 We recognised and we knew that the proposals had 18 been made to change those, but we didn't anticipate that 19 it was going to get so bogged down, and it became very 20 difficult to get the final approval, because CEC were 21 also aware of the potential changes and the assumptions 22 made by BSC in their offer to change that -- the design 23 that we'd delivered to date. 24 Q. On the question of the misalignment workshops, did you 25 have any understanding just before contract close as to 88 1 when these workshops would take place? 2 A. Yes, they were scheduled to take place in the first 3 eight weeks, and we were pleased at that. This is 4 another -- a good -- in one respect, we took this as 5 an indication that that step change in the approach to 6 the resolution of the issues and the finalisation of the 7 design, we recognised that there was going to be more 8 work to do, but we also anticipated that this would 9 finally drive a change in approach, and that's what we 10 hoped in the programmes that we put forward at those 11 points. 12 Q. When did the workshops take place, approximately? 13 A. They didn't achieve the eight weeks. Some of them took 14 place. Some of them took a lot longer. The reports -- 15 I think it was more like four or five months, rather 16 than eight weeks for all the workshops to take place, 17 and I'm not even sure that all of them did actually take 18 place. 19 Q. I'll come on to some documentation in that regard very 20 shortly, but I think a trackform workshop took place on 21 19 November 2008. That didn't result in a letter of 22 instruction, I think, until March 2009. I think an OLE 23 workshop took place on 3 April 2009. And I think there 24 may have been others we will come to. There was 25 a development workshop, I think, on 5 January 2009. Do 89 1 these dates seem correct? 2 A. Yes. 3 Q. So why was there a delay in these workshops taking 4 place? 5 A. I think it was a collective -- I think it was tie's 6 responsibility as the programme manager for the scheme 7 to drive them and implement them, and that just didn't 8 happen with the level of urgency that it needed to get 9 the issues resolved. 10 Q. Without going to it, I think you say in your statement 11 that there were several areas where there were major 12 deviations but lots of minor ones as well, but the 13 structural design and the trackform ones were the 14 largest of the deviations; is that correct? 15 A. Yes. 16 Q. Could we go then, please, to your statement at page 143. 17 In paragraph 579, halfway down, you say: 18 "What actually happened was, taking the structural 19 design as an example, BSC agreed at the workshop that 20 they would build what was shown on the SDS design as 21 opposed to the value engineered options included in 22 their bid. That concluded what the approach was going 23 to be and we proceeded with the designs, but we could 24 not understand how this impacted contractually between 25 TIE and BSC." 90 1 In the next paragraph: 2 "We knew that the value engineering opportunity had 3 not been realised and had not even been reviewed through 4 those workshops. It was closed-out. We did not know if 5 the decision was going to cost TIE or BSC more money." 6 So in respect of those structures, are you saying 7 that there wasn't even discussion as to whether a value 8 engineering opportunity could be realised? 9 A. Yes. Certainly in the context of those misalignment 10 workshops, I went to the meeting that was held to review 11 the misalignments, and it was a very short meeting. I 12 was expecting it to last several days or take several 13 sessions to resolve. 14 But it didn't. BSC just confirmed at the alignment 15 workshop that they would build the SDS design. And 16 Steven Bell just accepted their stance on that, and that 17 was the end of the misalignment workshop. 18 Q. So that had the benefit, at least, that the SDS design 19 wouldn't require to be changed; is that correct? 20 A. That's correct. 21 Q. But it had the disadvantage that no value engineering 22 opportunity would be obtained; is that correct? 23 A. As far as we knew at that point. We were expecting 24 a lot of change, or certainly a lot of review, or to be 25 asked to review the structures to change the foundation 91 1 types or the bridge decks or the form of the structure. 2 But that certainly didn't happen as part of that 3 misalignment workshop. 4 CHAIR OF THE INQUIRY: If the contract had proceeded on the 5 basis of tie's -- I beg your pardon, on the basis of 6 BSC's approach to include value engineering, and really 7 a different design from the one that you had -- SDS had 8 provided, and then they changed very quickly as a result 9 of a fairly short meeting to abandon that and to go back 10 to the SDS drawing, would that be a notified change if 11 it came about because tie were suggesting it or because 12 you were suggesting it? 13 A. We -- we really were bemused by the approach and -- I'm 14 trying to answer your question directly. We didn't 15 really know. We couldn't understand who would just -- 16 as I say, lost the opportunity. We were totally bemused 17 by the whole thing, and it -- we couldn't work out if 18 all of a sudden BSC had lost the VE money that they'd 19 identified during the process, or if tie had. 20 We weren't -- we were expecting to understand 21 through the misalignment workshops what work was 22 expected of us to redesign those structures, for 23 example. But we didn't really know how that was going 24 to be -- we knew that tie were going to instruct the 25 changes, and we expected them to be based upon the 92 1 solutions that had been put forward by BSC during their 2 bid submission. But as to how contractually that was 3 going to get resolved between BSC and tie, we were 4 really, really bemused. 5 I remember the discussions that we had as SDS. 6 Mr Reynolds gave evidence yesterday, and we couldn't 7 work out between us, you know, what was happening at the 8 point. It was such a strange turn of events. 9 MR MACKENZIE: Thank you. I would like now to turn to four 10 documents on the question of the misalignment workshops, 11 without trying to take up too much time on any of them. 12 The first one is CEC00999080. I think we see this 13 is a letter dated 27 February 2009 from Mr Brady, the 14 Project Director of the Consortium. It's for the 15 attention of Mr Bell. We see the subject heading is 16 "Development Workshop Report: Roads". If we then please 17 go to page 8 to see the conclusions, we can see in 18 paragraph 3 the conclusions. Just take a minute to read 19 that, Mr Chandler. 20 It refers to a design solution being required to 21 allow most economical road construction, et cetera. So 22 this was an instruction to, I think, change the SDS 23 design. 24 Do you know roughly how long it took to comply with 25 this instruction? Was it a significant amount of work? 93 1 Was it a minor amount of work or what? 2 A. It was pretty much in line with the proposal that we'd 3 had to date, which was to have a menu of options. So if 4 the road -- if we excavated the road and it was -- and 5 it was found that the sub-surface or the substrate was 6 poor, there would be a particular solution. 7 It was -- it was a matter of weeks rather than years 8 to produce that. It really was a fairly quick thing to 9 do. 10 Q. So did the menu of options allow for different options, 11 depending on what was found when the road was dug up? 12 A. Yes. But it was only -- sorry. It was only the roads. 13 It wasn't the trackform. So it was the associated 14 highway works. So where we had to remodel a junction to 15 introduce the tram infrastructure, this provided the 16 menu of options for that -- for the associated highway 17 works. 18 Q. Thank you. If we go, please, to page 10, just to see 19 the date of the workshop in passing. 20 I think we can see in the middle of the page: 21 "Meeting held as follow-up to Roads Development 22 Workshop on 25/11/09." 23 Can we scroll to the top. Yes, we see also 24 a reference there to 5 January 2009, in the left-hand 25 corner, towards the top. 94 1 Then on, please, to page 18. So we can see a BSC 2 letter with a Change Order to SDS at page 18. We see in 3 the text, in the middle paragraph saying: 4 "We hereby authorise you to proceed with the design 5 works as detailed in the SDS Design Change Estimate and 6 enclose our Design (Client) Change Order ..." 7 By that stage BSC are the client. 8 Could we also then, please, go on to page 21. We 9 see here a letter from tie, from Mr Bell dated 10 13 February 2009, again with a reference to a change 11 order. 12 So in short, what was the process? Was it that once 13 agreement had been reached on what required to be done 14 in respect of misalignment, tie would issue a change 15 order to the consortium, who would in turn issue 16 a change order to SDS? 17 A. Yes. They were -- so BSC were our client by this point. 18 So we received the change -- the change process was via 19 that route. 20 Q. Thank you. 21 Leave that document, please, and briefly look at 22 another similar document, please, at CEC00771984. This 23 one is to do with trackform. We can see this again is 24 sent from Mr Foerder on behalf of the Consortium, dated 25 11 March 2009, a letter to tie, enclosing the 95 1 Development Workshop Report on trackform. 2 If we can go to page 10, please, to see the 3 conclusion. 4 Could we blow up that page, perhaps. What I was 5 a little puzzled by under paragraph 3.2, for example, 6 "Misalignment No 1, Rail Sections: 7 Confirmation of no objection to the use of the 8 proposed rail sections ..." 9 What was the main outcome or outcomes or conclusion 10 of the workshop in relation to trackform? 11 A. I'm sorry, I can't remember how the trackform concluded. 12 I'm not even sure that we were invited to that one 13 because the completion of the trackform design was the 14 responsibility of BSC, rather than Parsons Brinckerhoff. 15 So I can't recall how that one concluded. 16 I apologise. 17 Q. Not at all. If we go then, please, to page 13, I think 18 this is a record of the meeting note. Let's look at 19 that, page 13. We can spin it round, please. 20 Now, we can see this is issued by BSC. Date of 21 comments, 19 November 2008. It doesn't seem to be in 22 the form of a meeting note, does it? 23 A. No. 24 Q. Which may be consistent with what you have just told us. 25 Then let's go to the letter of instruction, please, 96 1 page 27. This is the instruction dated 18 December 2008 2 from Bilfinger -- tie to Bilfinger. 3 Is this page 27? It is, thank you. 4 In the event I think the trackform did change; is 5 that correct? 6 A. The trackform was selected by Siemens, and it was 7 implemented. So yes, we'd only produced a generic 8 trackform by this point. So it was for them to finalise 9 their component selection, and that was their component 10 selection. 11 Q. So what changed, for example we know in Princes Street 12 that voids were discovered, and I assume that the 13 reinforced concrete bed was put in; is that correct? 14 A. Yes, it was. 15 Q. So that was changed, but on top of that concrete bed, 16 Siemens were able to lay on their choice of trackform? 17 A. That's correct. 18 Q. I understand. Thank you. 19 Then another letter, please, another document to do 20 with OLE, is CEC00971086. We don't have to take up much 21 time with this. We can see this is a letter dated 22 9 April 2009 from BSC to tie. 23 If we go to page 12, please, we'll see the 24 conclusions. We don't have to read them out. I think 25 they also go on to page 13. It does result in various 97 1 instructions. We see reference to various 2 misalignments, and go to page 20, please. 3 We can see this is a meeting note. We can see the 4 date is 3 April 2009. I think we can see certainly 5 Alan Dolan of SDS and two others are present at that 6 one. I think that did result in a Change Order; is that 7 correct? The OLE? 8 A. Yes. 9 Q. Yes. Thank you. 10 On the question of any other misalignment workshops, 11 were there other misalignment workshops? 12 A. I can't recall there being one for the systems and 13 comms, albeit I think it was originally intended to have 14 a systems and comms alignment workshop. 15 There was one for OLE track, roads. I can't recall 16 there being any other misalignment workshops. 17 Q. Could we go then, please, to a document which may help. 18 It's BFB00095823. We can see from the top of the page 19 it's an email from yourself, Mr Chandler, dated 20 8 March 2011, sent to Kevin Russell and Martin Foerder 21 of BB. 22 I think in short this is at the time of the Mar Hall 23 mediation and you had been asked to provide certain 24 additional information. 25 If we go over the page, please, to page 2, in 98 1 item 5, in the second half of the page, you had attached 2 the schedule of the Changes that have arisen as a result 3 of the Misalignment Workshops post Novation: if we could 4 then please go to that Schedule, which is BFB00095824, 5 I'm not sure to what extent we can blow this up. 6 Is that the maximum we can blow it up? 7 Particularly the -- it's first five columns, 8 approximately. Five or six columns. Thank you, that's 9 helpful. 10 So I think we can see in the third column in from 11 the left, the title or the item of the misalignment. We 12 can read them for ourselves. There's then a column 13 telling us the full description, and then two columns 14 on, we can see from BBS the change notification date. 15 Are all these items of misalignment? 16 A. Yes. 17 Q. So that would be a complete list of the misalignments 18 and the misalignment workshops; is that correct? 19 A. Yes. 20 Q. And we can see, I think, from the far right-hand -- 21 the -- towards the right-hand of the page, from BBS, 22 change notification, the dates column, we can see dates 23 ranging from January 2009, April 2009, September 2009, 24 January 2010, March 2010, April 2010. So even at these 25 relatively late dates, there are still misalignment 99 1 workshops taking place and having to be resolved? 2 A. Yes. 3 Q. Thank you. We can put that document to one side, 4 please. 5 Go back, please, to your statement at page 155. At 6 paragraph 629, forgive me for repeating what we've gone 7 over already, you say: 8 "BSC inherited SDS and they inherited a design at 9 a point of completion. The inclusion of the BSC design 10 components changed the design. We also received 11 instructions from TIE and changes from TIE. There were 12 changes required to the design as a result of third 13 party issues which had to be explained to BSC, including 14 the reasons why these issues had arisen. It was quite 15 a complex process." 16 So what you're referring to there, I think, are 17 these the critical issues you referred to earlier still 18 being present and requiring to be resolved? 19 A. Yes. 20 Q. That's in addition to any misalignment with the 21 contractor's proposals that we've discussed as well? 22 A. Yes. 23 Q. Thank you. 24 On a separate question, please, on the question of 25 BSC supervising the production of design by SDS in 100 1 obtaining the remaining approvals and consents, and just 2 standing back, before obviously contract close, you were 3 co-located with tie in their offices and producing 4 design. After contract close I think you then were 5 located in the consortium's offices, is that correct? 6 A. That's correct. 7 Q. As far as -- and you had two different clients. You 8 obviously had tie as the client before contract close 9 and the consortium as client after contract close. Was 10 there any change in the production of design or in the 11 supervision by the client of the production of design 12 before and after contract close? 13 A. When you say the client, are you talking about tie or 14 BSC? 15 Q. Well, both. Was there a change between before contract 16 close, tie as the client supervising the production of 17 design, and then after contract close, the consortium as 18 the client, supervising the production of design? 19 A. Sorry. Yes, BSC were -- were very strong in their 20 leadership of the completion of the design. I think 21 they were surprised at the level of uncertainty post 22 contract award, and signing of the documents. They 23 drove the completion very hard. 24 So the leadership that -- in that sense definitely 25 ramped up. 101 1 Unfortunately the management and the completion of 2 the design by tie and CEC didn't match that of BSC. So 3 we didn't see the determination to complete, make all of 4 the decisions, resolve the misalignment workshops and 5 then complete the design such that we could issue the 6 final issue for construction drawings, and BSC were 7 incredibly frustrated by that. 8 Q. The reason I ask is that I won't take you to it, but tie 9 produced a Design Audit Report in April 2010 which 10 concluded that there was little evidence that the 11 consortium had properly managed the design process in 12 a timely manner. Do you have any comments on that 13 suggestion? 14 A. I would disagree with that. We were -- we were pushed, 15 very professionally, very hard to complete the design, 16 and to get that done in a timely manner by BSC. 17 So I would challenge that view. 18 Q. It sounds as though, Mr Chandler, and correct me if I am 19 wrong, that coming back to my initial question about why 20 was there such a delay in completing design, et cetera, 21 after financial close, that you have mentioned, 22 obviously the problems with incomplete design and 23 misaligned design and the need to resolve that. Also 24 the outstanding critical issues rumbling and grumbling 25 on, but also you've referred to tie and the Council not 102 1 making the step change that you had earlier identified 2 was required. 3 Is that a fair summary? 4 A. Yes, it is. 5 Q. Thank you. 6 Moving on to a different matter, please, the 7 question of the incentivisation payment received by 8 Parsons. 9 Can we go, please, to page 144 of your statement in 10 that regard. We discussed this a little with 11 Mr Reynolds yesterday. At paragraph 585, please, you 12 explain that: 13 "There were 112 deliverables still outstanding and 14 if SDS achieved all of them we got the GBP1 million. 15 For every one we failed to achieve, a 112th of the 16 GBP1 million was reduced." 17 Now, to pause there, the question of there being 112 18 deliverables, when we looked at the SDS Novation 19 Agreement, which told us how many deliverables were 20 outstanding, it was much less than that. 21 I just wondered where did the 112 come from? 22 A. It was in the review of the programme that we did with 23 tie upon the approach to the signing of the contracts. 24 They were identified as the packages and -- that they 25 wanted to see to get the contractor into a position 103 1 where they could construct the works. 2 I can't remember exactly how they were identified, 3 but we had a list of them and they were very clear what 4 the dates were. We programmed them on our version 31 5 programme. So we knew exactly which ones they were. 6 I can't remember exactly how they were identified. 7 Q. I understand. But in short, the answer would be in the 8 programme? 9 A. Yes. 10 Q. Thank you. Now, look to see what happened in that 11 regard. Document BFB00095830. We can see this is 12 a letter from yourself. If we go to the bottom of the 13 page. Thank you. Towards the top of the page, please, 14 dated 20 October 2010. 15 We can see the heading for ourselves. The second 16 last paragraph states: 17 "We therefore enclose for your scrutiny and 18 agreement SDS Application for Payment for 19 Incentivisation ..." 20 If we then please go to the attachment, it's 21 BFB00095829. Go to page 3, please. If we can blow up 22 the table, please. 23 We can see this application, bottom right-hand 24 corner, is for GBP973,214.29. We can see then 25 a breakdown of how that is comprised. We can see it 104 1 delivered on time, 57, delivered at no fault of SDS, 52, 2 and delayed due to SDS, 3. 3 Now, in short was that payment made? 4 A. We received payment. It wasn't quite as high as that. 5 I think it was -- I think it was 800,000. There was 6 some debate around the delayed no fault of SDS and could 7 we have done more, but the vast majority of them were 8 accepted and paid. 9 Q. Thank you. I would now like to move on to 2011. We've 10 heard about the Mar Hall mediation in March 2011. In 11 February 2011 we have heard that the consortium sent tie 12 a proposal called the Project Phoenix Proposal, which 13 included the consortium's various sums, including a sum 14 for SDS. 15 If I can go to that table, please, it's document 16 BFB00053258. So this is page 1. We can see it's 17 a letter from Mr Foerder of the consortium, dated 18 24 February to tie, saying: 19 "Please find attached our Project Phoenix 20 Proposal ... which is submitted in the ambit of the 21 forthcoming Mediation." 22 If we can go then, please, to page 33. We can blow 23 up the top, please, and blow it up. Appendix 1.4, SDS 24 PPP -- I think that's Project Phoenix price -- price 25 breakdown. 105 1 Over the page, please, we can see a table, and 2 I think if we look at the scope works, we can see 3 a column, original subcontract work. We had explored 4 yesterday with Mr Reynolds the figure at the bottom of 5 that column, can you see it, of about GBP4.983 million? 6 Can you see that? It's very much in the centre of the 7 page at the bottom. 8 A. Yes. 9 Q. We had explored with Mr Reynolds that that is the figure 10 which was anticipated at the time of contract close and 11 SDS Novation, of the sum that would be required to be 12 paid to SDS to complete all outstanding design work, and 13 we can see how that figure was broken down. 14 For example, at the top of that same column, do you 15 see the figure of just over 2.2 million? 16 A. Yes. 17 Q. So that I think was to complete the outstanding 18 deliverables under the SDS contract dated 19 September 2005. 20 Then there were further sums then, I think, 21 estimated in respect of SDS's work that would be 22 required post-novation. 23 So that was the contract close. What was 24 anticipated. 25 Then if we then compare that column with the very 106 1 far right column, we can see the actual sums which had 2 been incurred or built up by February 2011. So, for 3 example, under item 2, changes, nothing had been allowed 4 for that at SDS Novation. But we can then see a sum in 5 the far right-hand column of about GBP4.2 million in 6 that regard. 7 Are you able just to give an overview of what the 8 changes related to? 9 A. It was a condition -- it reflects the fact that when we 10 were pulling the scope together at the point of 11 novation, we had understood the design to be largely 12 complete, barring the closeout of the issues. We 13 thought there was going to be that step change in the 14 closeout of the issues. 15 What actually happened was there was a further 16 unravelling of the design, and far more work undertaken 17 to finalise that design, which resulted in us doing 18 a significant amount of more of both preliminary design 19 and final design in order to deliver the final IFC suite 20 of drawings. 21 We've got a very detailed log of what all those 22 changes were to substantiate that 4.234 million, but 23 there was a significant amount of additional work that 24 we had to do. 25 Q. Thank you. You mentioned there being a further 107 1 unravelling of the design. Why was that? 2 A. It's pretty much in line with what we've discussed. The 3 changes to suit Bilfinger Berger's offer. There was 4 some of that. There was still changes that came out of 5 the technical and prior approvals that occurred after 6 the point of novation that we thought had been resolved 7 by that point. 8 So there was revisits to a lot of the design that we 9 thought had been concluded, you know, at a preliminary 10 design stage, never mind a detailed design stage or 11 beyond novation. 12 Q. Thank you. Can we also see item 6, extended 13 construction support. I think at the time of SDS 14 Novation, that was an estimated sum of GBP1 million. We 15 can see the total then at February 2011 is about 16 3.9 million. 17 Do you know why that sum has increased so 18 significantly? 19 A. We'd intended and it was identified at the time of 20 novation, that having SDS expertise to support their 21 team, and to ensure that what was constructed was in 22 line with the design, that would be a very valuable 23 opportunity for not just BSC, but the whole project. 24 What we hadn't anticipated was the amount of design 25 change that would continue during the construction 108 1 phase, and I think that extended construction support 2 team also acted to react to that. 3 So as the construction proceeded, they were having 4 to react to interpret the design and to make sure that 5 the construction team had the level of design and IFC 6 that they needed in order to continue with that 7 construction. 8 So it went from being a sort of -- it used to be 9 an RE type role, just providing responses there and then 10 on site, to a more onerous or a more extensive support 11 process where we actually were acting as a site-based 12 engineer for the contractor. So it was a far more 13 in-depth role than we'd originally thought. 14 Q. We discussed earlier today the question of, before 15 financial close, the removal of systems integration 16 element in contractor's offer, which removed about 17 GBP9 million from their fee for the systems integration. 18 Would that work be shown in any of the figures we're 19 looking at in this page? 20 A. I think there would be an element of that within that 21 design support, and construction support, that certainly 22 the expectations of SDS during that part of the work 23 were more -- were more than we anticipated they would 24 be, and I think that partly was because of that removal 25 of that systems integration role. 109 1 Q. Thank you. 2 Now, we can put that document to one side. You have 3 mentioned that after Mar Hall, there suddenly was a step 4 change and it was possible to close out a number of 5 matters, in particular, I think, technical matters, very 6 quickly; is that correct? 7 A. Yes. 8 Q. So what in your view had changed? 9 A. It became far more collaborative. So we'd had thousands 10 of comments on the technical submissions that we'd made. 11 For example, to the Roads Authority. And what was -- 12 what we did after Mar Hall was sit the designer with the 13 technical officer from the Council who was reviewing the 14 design, and red line the drawings to solve the issues 15 that were concerning him at that point. 16 Then the agreement was if we made the changes, that 17 would be deemed to be acceptable. And that was the step 18 change that we were looking for all the way through; 19 because prior to that we would receive the comments. We 20 might have a meeting to review those comments, but then 21 we would go away and make the changes, to submit the 22 drawings again, only to get more requests for change. 23 So the cycle continued, and every time we made 24 a change to those drawings, or not every time, but quite 25 often, it impacted and forced another issue. 110 1 So after Mar Hall we had a collaboration that we'd 2 always been looking for, that if we made that change, or 3 the series of changes, that would be deemed acceptable, 4 and that was the step change that had been missing to 5 that point. 6 Q. Now, it has been suggested by another witness, Mr Sharp, 7 Damian Sharp, who I think was involved in this process, 8 that he says it was a tactical decision by the 9 consortium not to close these matters out while parties 10 were in dispute. 11 I think his basis for saying that is that during the 12 closing-out process that occurred after Mar Hall, he 13 says that in fact SDS and the consortium in fact did 14 have solutions to a number of these items and were 15 almost able to say: here is one we prepared earlier, so 16 we are able to close these matters out quickly. 17 Do you have any views on that suggestion? 18 A. I would totally disagree with that. 19 We had solutions to lots of the issues and we'd 20 tabled those solutions and tried to drive resolution for 21 a considerable period. We were incredibly frustrated by 22 the whole process. As an engineer and a design team, to 23 design something four, five, ten times is incredibly 24 frustrating and it's not something that we would elect 25 to do, and we certainly didn't do it to give anybody any 111 1 tactical advantage. 2 At several stages during this scheme, financially, 3 Parsons Brinckerhoff were in an incredibly poor 4 position. So to suggest that we would try and prolong 5 that even further with the risk of losing even more 6 money would not be something that we would have ever 7 done. 8 Q. I think to be fair to Mr Sharp, his suggestion was more 9 directed to the consortium, a tactic on their part, 10 rather than Parsons. 11 A. But even -- even in our role supporting Bilfinger Berger 12 and Siemens and CAF, or BSC, we were still financially 13 at risk, and no company wants to be in that position. 14 So we never colluded with Bilfinger Berger and 15 Siemens to do that. And we wouldn't have done, both 16 ethically we wouldn't have done that, and financially we 17 were struggling at that -- all the way through this 18 contract. 19 So to try and delay even more, or to hold back on 20 solutions that we somehow had in a bottom drawer 21 somewhere, would not be something that we would have 22 done. 23 Q. If there was a tactical decision by the consortium to do 24 that, is that something you're likely to have been aware 25 of? 112 1 A. Yes, because we were producing most of the design. So, 2 you know, they would have struggled to ask us not to 3 submit designs that we had already available and ready 4 to go. 5 I think the real proof is the meetings that took 6 place after Mar Hall to resolve all these issues were 7 very, very quick and effective. 8 But there was still a lot of change that had to be 9 made to those drawings to remove the comments. It was 10 more about the process of doing that, and it being 11 acceptable then to a level that we could move forwards 12 and that the Council would approve the drawings. 13 CHAIR OF THE INQUIRY: Could I just ask you about the 14 process after Mar Hall. You said that part of the 15 process was to sit down with an official from Edinburgh 16 who would agree once he or she was satisfied with the 17 change, so that consent would go through. 18 Were these officials highways officials or were they 19 planning officials? 20 A. Most of the comments related to roads, the technical 21 roads authority. 22 CHAIR OF THE INQUIRY: So these would be people, were they, 23 who had delegated authority to agree such issues? 24 A. Yes. 25 MR MACKENZIE: My Lord, two final matters, site 113 1 investigations and MUDFA, which will take, I think, half 2 an hour, but this may be a suitable time to stop. 3 CHAIR OF THE INQUIRY: We will adjourn for lunch, I think. 4 We will resume again at 2 o'clock. 5 (1.00 pm) 6 (The short adjournment) 7 (2.00 pm) 8 CHAIR OF THE INQUIRY: You're still under oath, Mr Chandler. 9 MR MACKENZIE: Thank you, my Lord. 10 Mr Chandler, two final matters, please. The first 11 relates to site investigations. I would like to clarify 12 one or two points in your statement, please, at page 61. 13 Starting at paragraph 231. 14 If we start to go over ground we've already covered, 15 please just stop and tell me. 16 Now, you say in paragraph 231 that: 17 "SDS had certain responsibilities regarding site 18 investigations. Unfortunately, we could not get access 19 to certain sections of the route at that time. A couple 20 of examples: Princes Street, we could not get access to 21 undertake site investigation at the preliminary design 22 stage. Similarly, I think Network Rail, the Haymarket 23 station; we could not get access to a particular plot of 24 land there to undertake site investigation. There were 25 several locations where we could not gain access to 114 1 undertake that investigation at the time when we would 2 have ideally liked to have done." 3 To pause there, were there any other locations where 4 you weren't able to get access to undertake site 5 investigations that later became of significance? 6 A. One that springs to mind was the -- there was a proposed 7 substation site at Picardy Place, where there were 8 a couple of options for the introduction of a substation 9 to provide the power to the tram network. One of those 10 options was in a basement or a -- a basement of an 11 existing building that was part of a future development, 12 and we couldn't get into that at the time. 13 We weren't overly concerned because there were other 14 options if that didn't turn out to be possible. 15 I think we satisfied ourselves the majority of the 16 route that we'd done enough SI and GI to inform the 17 design. 18 Q. Thank you. On to the next paragraph, please, 19 paragraph 232, you say: 20 "Under normal circumstances, if you need access, you 21 just de-risk the project and do what is required, 22 explaining whatever needs to be done." 23 I wasn't sure what you mean by "you just de-risk the 24 project"? 25 A. Sorry, that's -- I think there's a bit of a typo there. 115 1 In terms of the -- in -- what I was getting at then, 2 and I think I have deleted something by accident, but 3 under normal circumstances, what you do is enough site 4 investigation and ground investigation to de-risk the 5 project as much as possible. 6 We obviously can't do -- we can't dig the whole 7 route to understand what's under the ground ahead of the 8 contractor arriving on the job. So what we do is 9 selective SI and GI, to inform us and to satisfy 10 ourselves that by interpolation between those points, 11 that the ground that we're expecting to be uncovering is 12 pretty much what we expect it to be. 13 So we do enough to gain an overall view that we know 14 what's going on, and the design that we are putting 15 together is robust. 16 So that when the contractor does do the construction 17 work, as they proceed, providing they've got a suitable 18 review process in place, the rolling SI and GI programme 19 that I talked about earlier, then we should be able to 20 satisfy ourselves that what was intended through the 21 design is actually -- and what we saw during the SI and 22 GI that we undertake during the design process is 23 actually correct and that there's not any risk that -- 24 due to unforeseen ground conditions. 25 Q. Thank you. In the final sentence of this paragraph you 116 1 say: 2 "As a result there were some areas where site 3 investigation was very limited." 4 Do you include in that sentence Princes Street? 5 A. Princes Street and the on-street sections was the -- 6 were the main issues for us and they were the ones that 7 were giving us the most concern. 8 Q. Were tie aware of that? 9 A. Yes. 10 Q. If we then go back to paragraph 234, I think you've 11 mentioned there the Picardy Place item. In 12 paragraph 235, please, I think we are now starting to 13 repeat ourselves. So I won't dwell on this, but you 14 come back to Princes Street, and tie wanted SDS to have 15 a very shallow trackform. 16 Do you remember, when you say that, does that relate 17 to before or after contract close, that tie wanted SDS 18 to have a very shallow trackform? 19 A. Both. 20 Q. Was that triggered by the proposal from Bilfinger? 21 A. No, it was actually raised earlier than that, and we had 22 worked through what we thought was the right solution 23 from the very early stages of the project, even at 24 requirements definition phase. 25 As I've mentioned earlier, I've worked on numerous 117 1 schemes in the UK, and what we were proposing for this 2 scheme was very similar to most of those. 3 So it was very early on, but we thought the pressure 4 to change that decision definitely ramped up towards the 5 appointment and the full-time selection of the Infraco. 6 Q. Thank you. Finally, over the page, please, at page 62, 7 in paragraph 236, you explain that when you eventually 8 got access to expose the formation on Princes Street 9 during construction ... 10 So when was that? Was that 2009? 11 A. It would have been, I think, around Q3 to 4 of 2008. It 12 was when the construction of Princes Street actually 13 started by the contractor. I can't remember exactly 14 when, but it was fairly early in their construction 15 programme. 16 Q. We will no doubt come on to hear evidence about the 17 Princes Street dispute. I think from recollection works 18 were planned in around February 2009, but it may be that 19 there were prior excavation works perhaps. Would that 20 be correct? 21 A. No, I don't believe they did any -- I stand corrected 22 that it was probably -- I have sort of lost track of 23 when they started that construction work. I don't 24 believe they did any advanced -- any more SI or GI work. 25 I think when they actually started installation of the 118 1 trackform was when they discovered the issues with the 2 formation. 3 Q. I understand. We will no doubt come back to that with 4 other witnesses. 5 Just very finally on this paragraph, you say: 6 "I would be almost certain that would have been 7 millions of pounds of additional cost to deliver the 8 deeper, two stage, track form." 9 Just for clarification, by two stage trackform, do 10 you mean by that the concrete foundation with the rails 11 on top? 12 A. Yes. 13 Q. Thank you. We can leave that point, please. 14 Then go back to the SDS Novation Agreement, please. 15 A point of clarification. The number is CEC01370880. 16 If we can go, please, to page 53. Can we blow up the 17 top bit. We can see this is Appendix Part 2, "CONSENTS 18 PROGRAMME AND DESIGN DELIVERY PROGRAMME PART A PROGRAMME 19 ASSUMPTIONS AND CONSTRAINTS". If we can go, please, to 20 page 58, towards the bottom, paragraph 2.3, surveys, it 21 is stated: 22 "Surveys are planned in order to fill gaps and 23 shortcomings in existing information and will be 24 scheduled in accordance with the critical areas and 25 production of detailed design." 119 1 We then see the sorts of surveys that are intended. 2 In short, was it intended to carry out a further 3 survey in Princes Street? 4 A. No, I don't believe it was. I think we'd gone as far as 5 we could with Princes Street, prior to the programme of 6 excavation and survey that we talked about on that 7 rolling programme that we'd mentioned earlier. 8 Q. Were the surveys referred to in this paragraph carried 9 out after contract close? 10 A. There were definitely some surveys carried out. 11 Network Rail is the good example at Haymarket that 12 I spoke of earlier. 13 Q. Do any of these surveys carried out after contract close 14 identify any areas or matters which became a significant 15 problem? 16 A. No, other than the ground investigation -- the actual 17 construction works that we spoke about earlier on 18 Princes Street and that continued. But no, there was 19 no -- there were no real surprises in terms of any gaps 20 in the survey that we'd done to date, and I think in the 21 areas where -- we identified what surveys we thought 22 should be undertaken to inform the design, and I really 23 can't think of anywhere that we found anything during 24 the construction that significantly changed our design. 25 Q. Thank you. I would like now to leave the question of 120 1 site investigations and move on finally to MUDFA. 2 I would like to start with a document I'm not sure 3 the Inquiry has sent you before. It's PBH00004904. 4 We can see, if we start at the bottom email, please, 5 email from David Simmons, the Halcrow Project Director, 6 to David Hutchison of PB, dated 11 April 2006, subject, 7 Utilities Strategy Document: 8 "Herewith the document previously issued for 9 discussion with your team. A formal issue will be made 10 in hard copy." 11 Then scroll up, please. We had an email from 12 David Hutchison of 19 April 2006 to yourself, 13 Mr Chandler, asking: 14 "Can you please look at the attached document and 15 give me your comments." 16 Just a little bit further up. There's a reminder 17 email of 12 May 2006. Does this ring any bells so far? 18 A. It doesn't, I'm afraid. 19 Q. Okay. Let's now look at the attached note. It's 20 PBH00004905. We can see the top right-hand corner 21 underneath the Halcrow logo, the date 4 April 2006. 22 Project Edinburgh Tram, note: 23 "Utilities Strategy". 24 Author William Wilson. 25 We can see in the introduction in paragraph 1.1: 121 1 "The purpose of this document is to advise on the 2 work undertaken to date together with planned future 3 work with regards to the design of the utilities' 4 apparatus diversion/protection work for the Edinburgh 5 Tram Project." 6 If we then go, please, to page 3, I will try not to 7 take it too quickly, given this may be the first time 8 you have seen it for perhaps a number of years. Can we 9 see it's headed at the top, "Design", and we can see in 10 paragraph 3.3: 11 "The design process is split into 3 main 12 elements which are linked to the design programme for 13 the whole of the works." 14 We can read for ourselves what's set out in (a), (b) 15 and (c). 16 In paragraph 3.4, please, we say it says: 17 "As referred to in the introduction, it was always 18 recognised that the utility diversion design is out of 19 sequence with the roads design work and will progress on 20 the basis of the most up to date information relating to 21 tram and road alignment, along with structure, OLE ... 22 at any specific time. Consequently, the utility 23 diversion design will be subject to potential 24 significant change as the tram and road alignment moves 25 towards a 'design freeze' stage. This interaction has 122 1 been accounted for within the design process." 2 Then on to page 6, please. This deals with surveys. 3 We can see this paragraph 4, towards the bottom, under 4 "Surveys", 4.1: 5 "A GPR survey of critical areas is currently 6 underway. Initially it was envisaged that the entire 7 on street section of the tram network would be surveyed 8 to minimise risk of encountering unidentified apparatus 9 during the MUDFA and INFRACO works. This, however, has 10 not been possible due to programme and budget 11 constraints." 12 Then 4.2, Scope Determination: 13 "Programme constraints - as survey works were to be 14 undertaken during night working it was assessed that 15 a survey of the entire site would take in the region of 16 9 months. This was not possible given the original 17 aspiration of tie with regard to the MUDFA procurement 18 timescale and delivery of the preliminary design." 19 Over the page, please, to page 7, 4.3, Budget 20 Constraints: 21 "A full utility mapping and detection survey would 22 have cost in excess of GBP2 million, the reduced scope 23 survey is currently estimated at approximately 24 GBP220,000 (the apparent limit of budget available for 25 survey works for utilities)." 123 1 4.4: 2 "As a consequence of the above the scope of the 3 survey was reduced to cover areas classified under the 4 following 3 criteria." 5 We can see they are set out as severe congestion, 6 major services and spatial constraints. 7 Then scrolling down a little under 4.5(a), we can 8 see: 9 "Category 1 was defined as the highest risk areas 10 and included such locations as Picardy Place and 11 St Andrew Square." 12 Under 4.6, survey method, we can see: 13 "When Adien carries out their work, they investigate 14 utilities with three different methods. The first 15 method is to identify the services from the combined 16 utility services drawings. The second method is to lift 17 the lids of the various services and induce a current 18 into the tables, this is then traced along the surface 19 and markings placed on the pavement indicating location 20 and depth. This is done for every single duct in each 21 chamber." 22 Then: 23 "The third method that is used is to use a GPR unit 24 that is passed over the ground 7 times, and each 25 successive pass carries out a GPR at a different depth, 124 1 this is then used to identify services that may not be 2 easily located or connected into the chambers." 3 Under 4.9 sets out the Survey Findings: 4 "Broadly, the water and gas main locations are 5 considered to be generally in the locations indicated. 6 There is a lot of additional telecommunications and 7 other services that are being identified, such as 8 traffic loops for light signals. The headlines are as 9 follows:" 10 Firstly: 11 "Water and gas apparatus is relatively accurate." 12 Secondly: 13 "Other utility apparatus showing high levels of 14 positioning inaccuracy between plans and survey." 15 Thirdly: 16 "All utilities - significant volume of additional 17 apparatus identified." 18 Lastly: 19 "High number of chambers, tunnels and other 20 underground structures identified." 21 Paragraph 4.11, Future Survey Work. 22 "It was envisaged that ad hoc surveys would be 23 required as the design progressed however the issue 24 of accuracy of the existing combined PU information has 25 arisen as a result of the initial findings from the 125 1 Adien survey." 2 4.12: 3 "The possibility of trial trenching is being 4 considered to verify the Adien utility mapping and 5 detection work and to allow further assessment of 6 critical locations." 7 4.13: 8 "As planned the procurement of a void survey by 9 specialists Aperio is currently under way." 10 If we pause there, does this document become 11 familiar now, Mr Chandler? 12 A. Vaguely, yes. 13 Q. What is set out, does that accord with your general 14 understanding of the facts at the time? 15 A. Yes. 16 Q. Could we then please come to the conclusion section, 17 page 9. Under paragraph 6.1, the first conclusion: 18 "It has been referred to previously that utility 19 diversion design has progressed on the basis of the stag 20 layouts and combined PU plans and consequently carries 21 a significant risk relating to abortive design work. 22 This abortive work also includes any specific 23 negotiations with SUCs and any checking work." 24 Now, to pause there, is that a reference to the fact 25 that the utility designs are having to be carried out 126 1 before the other design, and particularly the roads 2 design has been finalised? 3 A. It's a matter of timing. We produced the Civils and the 4 tram infrastructure design. 5 If I take the on-street section, what we were 6 looking to do was to create a swept path for the tram or 7 to develop the envelope for the tram and to divert all 8 of the utilities from underneath the tram tracks in 9 particular. So that any future maintenance or upgrade 10 works to be undertaken by the SUCs was possible, without 11 impacting on the performance or the service of the tram 12 system. 13 So what we were doing here was trying to identify 14 where the services were so that we could put those on to 15 drawings and then identify which ones needed to be 16 relocated in order to achieve that aim of minimal 17 disruption to tram through the maintenance or upgrade of 18 those services. 19 Q. Thank you. Paragraph 6.2 states: 20 "The utility mapping and detection surveys are 21 showing high level of inaccuracy in the combined utility 22 drawings. It should be noted that the volume of 23 apparatus not identified on the plans is significant. 24 This raises severe risk on the MUDFA scope of works and 25 programme." 127 1 I'll just also read the next paragraph. 6.3 states: 2 "Potentially, severe risks of the discovery by MUDFA 3 and Infraco of unknown utility apparatus are being 4 accepted by SDS by restricting the extent of the utility 5 mapping and detection surveys due to budget and 6 programme. This is supported by the findings of the 7 initial survey areas." 8 Now, the matters set out in paragraphs 6.2 and 6.3, 9 presumably these would have been matters that you would 10 have been aware of at the time; is that correct? 11 A. Yes. 12 Q. Would you have agreed with those conclusions at the 13 time? 14 A. I would. What's really important here is that this is 15 extremely common. This isn't something that would have 16 been particular to Edinburgh or -- this is an issue in 17 most cities because of the introduction of utilities 18 without the recording of the precise location of those 19 utilities. 20 Quite often they're just indicative lines on base 21 plans, rather than precise records of where those 22 utilities actually are. 23 Q. In relation to the question of whether it is better to 24 radar survey the whole route, particularly the on-street 25 section, rather than particular parts of it, perhaps 128 1 critical junctions, do you have any views on which is 2 the better course to follow? 3 A. Given the time and the access, the more survey that you 4 do, the more informed you would be going forwards in the 5 process. So it would always be advantageous to do more 6 survey rather than less. 7 Q. In relation to Edinburgh and the Edinburgh on-street 8 works, do you consider it was reasonable to decide not 9 to radar survey the whole route, but only parts of it? 10 A. We did it on a risk basis. And that risk basis was 11 around the complexity of the junctions and the need to 12 divert those services, but also the time we had 13 available to us to do it. 14 So in hindsight I think we should have done more 15 survey. So that's probably the right answer to the 16 question. 17 Q. Whose decision was it to only survey radar critical 18 parts of the route, rather than the whole on-street 19 section? 20 A. We discussed that with tie at the time. 21 Q. So tie were aware of and agreed with that matter? 22 A. Yes. 23 Q. Presumably that decision would have been in accordance 24 with Parsons' advice at the time; is that fair to say? 25 A. Yes. 129 1 Q. Thank you. Do you know whether a final version of this 2 report was sent to tie? 3 A. I don't know. 4 Q. We may require to follow that up with other witnesses 5 later. Thank you. 6 Could I also please, on the question of MUDFA, in 7 relation to trial holes, the Inquiry has seen documents 8 which suggest that shortly before the utility diversion 9 works were carried out by the contractor, a lot of trial 10 holes were dug in the on-street sections in late 2007 11 and early 2008. I think these trial holes were dug by 12 the MUDFA contractor. 13 Do you have any recollection of that happening? 14 A. Yes. 15 Q. Yes? 16 A. Yes. 17 Q. Why were these trial holes dug at that time? 18 A. To understand exactly which -- what services were -- it 19 was particularly at the complex junctions that those 20 trial holes were undertaken. 21 We used them for other things like understanding 22 what the ground conditions were, but they were done in 23 order to inform the utilities diversions. 24 Q. Were those trial holes instructed by Parsons or by tie 25 to the MUDFA contractor? 130 1 A. I honestly wouldn't be able to answer that. I just 2 can't remember. Sorry. 3 Q. But you are aware that the trial holes were dug, 4 I think, shortly before the commencement of the utility 5 diversion works in these sections. I'm just slightly 6 puzzled that the trial holes were dug -- (a) there were 7 so many of them and (b) that they were so shortly before 8 the commencement of the MUDFA works. 9 I wondered whether that was usual or whether these 10 trial holes ought to have been dug earlier. 11 A. What should have happened was greater use of the local 12 knowledge of the SUCs themselves. That was one of the 13 issues that SDS raised with tie throughout the process. 14 The reason why I paused on my answer before with 15 that final version of that -- the document, was I think 16 for a long time, the SUCs weren't asked to support the 17 project in the manner that we would normally expect them 18 to. 19 Specific contracts were put into place by tie with 20 the SUCs to secure their support, and we would have 21 expected the local knowledge of those SUCs to be brought 22 into the project because quite often they've got people 23 that have worked with their utilities for numerous years 24 and they know their regions and their patches very, very 25 well. Had that knowledge been brought to the scheme, we 131 1 could have significantly de-risked the project because 2 GPR and even the trialling trenching and most forms of 3 detection are only an indication of where those services 4 are likely to be. 5 With the bigger services, the higher voltage 6 services, they're very useful, but with the lower 7 voltage and the likes of the telecoms cables, the output 8 from those services searches is really an indicative 9 survey only, rather than any great level of detail. 10 So the thing that never happened was -- or certainly 11 didn't happen anywhere near to the extent that we would 12 have liked it to, was the SUCs provide their detailed 13 knowledge of the route to support this. 14 Q. What if they don't know, if they -- if there are many 15 historical records stretching back over a considerable 16 period of time? Presumably if the SUCs had 100 per cent 17 knowledge of their utilities, they would give that to 18 you pretty quickly. Is the problem not that no one 19 really knows what is underneath until you start breaking 20 the ground? 21 A. That's true, but as we all know, utilities companies 22 quite often make changes to their utilities, and just 23 pulling that local knowledge in addition to the surveys 24 that we had undertaken, would have supported us 25 tremendously in identifying where those services needed 132 1 to be relocated from, and more importantly, probably, 2 where we could locate them in future to avoid other 3 services that were already in those regions as well. 4 Q. So are you saying the SUCs did have knowledge they 5 weren't passing on to SDS? 6 A. Yes, and contracts were put into place by tie to try and 7 secure that support, and one of the things that caused 8 us great frustration was that tie didn't use those 9 contracts with the SUCs to secure that support, and we'd 10 helped them to write them at the requirements definition 11 phase, and yet they seemed -- they didn't really use 12 them in the manner that we'd expected them to during the 13 delivery of the project. 14 Q. Coming back to these trial holes that were dug in these 15 critical on-street sections in late 2007 and early 2008, 16 why were the trial holes dug? Was it because it was 17 thought the information was incomplete? 18 A. I can't honestly recall the exact discussions around it. 19 But I know that the -- as I mentioned, the GPR and the 20 non-intrusive testing that was done is never conclusive. 21 Certainly not with the lower voltage and the telecoms 22 type cables. So doing trial holes is a recognised way 23 of achieving that certainty, or certainly a lot more 24 certainty around the exact nature of the buried 25 services. 133 1 Q. In relation to the timing of trial holes, is it good 2 practice to carry them out shortly before the 3 commencement of the utility diversion works, or is it 4 good practice to carry them out some time in advance of 5 those works, to allow time for any discoveries to be 6 reflected in the design, et cetera? 7 A. It would have been beneficial to carry them out earlier, 8 but the balance with that is obviously the disruption to 9 the public in such a location and such -- particularly 10 such a busy location. You always try and minimise that. 11 So having streets closed for long periods of time to do 12 advanced survey work is always a challenge and quite 13 rightly, the public would see limited benefit in that, 14 albeit you're right, I think it would have been 15 beneficial. 16 But it is a balance of disruption versus knowledge. 17 The other thing to say, I suppose, is that diverting 18 those utilities on their own, on a service by service 19 basis, is not all that complicated. It's the sheer 20 number of them that makes it complicated. 21 So having more knowledge about exactly where they 22 were going from and to, if we could have done that by 23 doing a lot of trenching and intrusive surveys would 24 have definitely helped, but in saying that, it would 25 have been very, very disruptive and very, very 134 1 time-consuming to have secured that level of 2 information. 3 Q. Thank you. I have two final questions. At page 81 of 4 your statement, please, in paragraph 318 you say: 5 "Quite often the more complex utility relocation 6 were parked and where they were not for SDS to resolve, 7 the MUDFA contractor did not move the utilities and left 8 them for resolution at a later date. So when MUDFA 9 completed their works there was a huge number of 10 utilities still in the ground that needed to be moved 11 before the principal contractor could undertake their 12 work. SDS and TIE were aware of that. So the MUDFA 13 contractor quite often moved the simple utilities only, 14 leaving the ones that required more complex design 15 solutions." 16 To pause there, does that mean that some utility 17 works, more complex works, were left for the Bilfinger 18 Berger Siemens Consortium to deal with? 19 A. Yes. 20 Q. Now, that must be the case in relation to the on-street 21 section from Haymarket to York Place. Does it follow 22 from what you have said that there may still be 23 unresolved utilities issues on the remaining stretch 24 down Leith Walk to Newhaven? 25 A. That's correct, yes. 135 1 Q. Thank you. 2 Finally, please, at page 116, paragraph 476, I think 3 this might actually be on the same point: 4 "Quite often the complex solutions that we needed 5 the SUCs to give advice on were left in abeyance; they 6 were left for the INFRACO contractor to resolve because 7 the SUCs had not been asked for, or failed to provide, 8 their advice on what needed to be done to resolve those 9 particular issues, of which there were many." 10 I don't think that adds to the paragraph we have 11 just read, does it? 12 A. Yes. 13 MR MACKENZIE: Thank you, Mr Chandler. I have no further 14 questions. 15 Questions by CHAIR OF THE INQUIRY 16 CHAIR OF THE INQUIRY: Mr Chandler, could I ask you about 17 the document you have just been looking at. That's the 18 Halcrow Utilities Strategy. It refers to different 19 technical issues, including something called an Adien 20 survey. What is an Adien survey? 21 A. That was the company that were undertaking the ground 22 penetrating radar surveys for SDS at the time. 23 CHAIR OF THE INQUIRY: So that's the ground penetrating 24 radar survey. What about the Aperio? 25 A. I'm sorry, I can't quite remember. It should be an easy 136 1 thing to check, but I can't remember the various 2 different subcontractors that were involved. 3 CHAIR OF THE INQUIRY: It seems from that report that by one 4 or other of these surveys, it would be possible to 5 identify underground chambers, and one of the issues 6 that seem to have arisen is the number of underground 7 chambers that weren't anticipated. 8 Given the significance of Princes Street in the 9 context of a historic city in the middle of 10 a World Heritage site, would that tip the balance in 11 favour of specialist survey to identify underground 12 chambers before you set out to break ground? 13 A. Yes. The identification -- I think the -- overall more 14 effort could have been made in identifying the services, 15 the underground chambers. There was an underground 16 tunnel towards Picardy Place. There was an underground 17 substation, historic signs of that, and there were 18 underground -- from the original tram system. There 19 were underground workings. 20 So I think it would be right to say that more work 21 could have been undertaken to identify those issues and 22 to make more -- undertake more design to support the 23 diversion of those services and those chambers. 24 CHAIR OF THE INQUIRY: I think we have also heard that in 25 the proposed extension down Leith Walk to Newhaven, 137 1 there are approximately 1,200 unresolved conflicts in 2 the utilities. Would that surprise you? 3 A. No. 4 CHAIR OF THE INQUIRY: So if this extension were to go 5 ahead, and given that some diversion of utilities has 6 taken place, would it require a detailed survey to be 7 certain as to what was underground? 8 A. I think a detailed survey would help. I think 9 collaboration with the SUCs would be by far and away the 10 best way of identifying those services. And between 11 those two, I would start with the SUCs and get in their 12 local knowledge first, and from that, the red lining of 13 the drawings could progress a very significant way 14 forwards, leaving then a GPR survey or some form of 15 non-destructive survey to reinforce what the SUCs had 16 said about the locations of their survey -- of their 17 utilities, and then also to identify that they just 18 simply did not know where they were. 19 So I think that would be the way that I would 20 approach any future works in that area. 21 CHAIR OF THE INQUIRY: But the utilities that have been 22 diverted in the route from York Place to Newhaven, 23 presumably those diversions were based upon your or 24 SDS's drawings and design. 25 A. Yes. 138 1 CHAIR OF THE INQUIRY: So that any extension which didn't 2 use your design would require a different approach, 3 would it? 4 A. Yes, that's right. 5 CHAIR OF THE INQUIRY: Because you might be talking about 6 a different swept path? 7 A. If the alignment for the tram is changed, there's 8 a significant potential that the new alignment could 9 actually be overlapping where we've actually relocated 10 all of those services to. So it could actually be 11 worse. The number of utilities that have already been 12 diverted, you might be actually putting the tram path 13 into that zone that we've considered to be an exclusion 14 zone for the tram. 15 So yes, that is the case. 16 CHAIR OF THE INQUIRY: Do you know where the intellectual 17 property rests as regards your drawings? 18 A. All of those drawings become part of -- we do them on 19 behalf of the client. So they would have been issued to 20 the client. 21 CHAIR OF THE INQUIRY: So they're the client's property? 22 A. Yes. 23 CHAIR OF THE INQUIRY: Now, I think there's one other 24 matter. Were SDS involved in the design of the station 25 at Murrayfield Stadium? 139 1 A. Yes, we were. 2 CHAIR OF THE INQUIRY: I wonder if you could give your 3 comments on this. 4 There has been a submission from a member of the 5 public about the Murrayfield stop and the steps and 6 pedestrian access there. 7 It's fairly short, so I'll just read it out: 8 "I would raise the design and costs of the steps and 9 pedestrian access to the Murrayfield stop. Publicity 10 promoted it as suitable for Murrayfield Stadium crowds. 11 I as a lay observer saw it as a fatal crowd disaster 12 waiting to happen. Nowadays for any large Murrayfield 13 event, most of the stairway is blocked off at the foot 14 by plastic barriers in the interests of crowd safety. 15 A safe modest stairway would have sufficed. Who 16 designed and who approved of the design? There could 17 have been a saving of costs if the design had complied 18 with accepted and standard crowd safety features and not 19 funnelled potential crowds like the Ibrox disaster to 20 narrow access to the platform. Is this an issue of 21 design management or approval?" 22 Do you have any comments to make about that? 23 A. Yes. It's a good example of the collaboration required 24 in order to finalise the design. So that particular 25 detail was the subject of numerous iterations of design, 140 1 and collaboration with both the police and the fire 2 brigade, and also the blind -- I can't remember the name 3 of the consultee group, but we had a consultee group for 4 blind and disabled people. 5 But the primary consultees during the development of 6 that design would have been CEC, both technical and 7 planning. The fire brigade and the rest of the 8 emergency services. 9 So quite often the crowd control, we would take 10 advice from the emergency services as to how that crowd 11 control should be managed, and what they would want to 12 see in the management of that crowd control. 13 They know the area particularly well. We talked 14 them through the drawings. We showed them all of the 15 concepts, and we developed iterations of the design, and 16 that's a really good example of where I think value-add 17 in that consultation process was very good. 18 We knew we had to get the approval from the 19 emergency services for the design. We had to consult 20 with them on particular areas like that. 21 The challenges, there are always different ways of 22 producing a design, and people have got different views 23 about that. 24 That's why we consulted with the emergency services 25 and with CEC. 141 1 So it went through a very robust, and there were 2 numerous versions of that detail that were produced. 3 But there are always different views from different 4 people. 5 CHAIR OF THE INQUIRY: Did you anticipate that your design 6 would incorporate temporary Heras fencing whenever there 7 was an international at Murrayfield to channel the 8 public through that? 9 A. No, we wouldn't have done that. We wouldn't have 10 advocated the use of those types of measures. 11 CHAIR OF THE INQUIRY: Thank you very much. I don't think 12 anyone else has got any questions. 13 Thank you very much, Mr Chandler. Again, apologies 14 that we didn't get to you yesterday. But things took 15 a bit longer than anticipated. Thank you very much. 16 You're still subject to your citation, and technically 17 you could be recalled, but hopefully that won't be 18 necessary. Thank you very much. 19 A. Thank you. 20 (The witness withdrew) 21 (2.45 pm) 22 (The hearing adjourned until Tuesday 17 October 2017 at 23 9.30 am) 24 25 142 1 INDEX 2 PAGE 3 MR JASON CHANDLER (sworn) ............................1 4 5 Examination by MR MACKENZIE ...................1 6 7 Questions by CHAIR OF THE INQUIRY ...........136 8 9 10 11 143