1 Thursday, 19 October 2017 2 (9.30 am) 3 CHAIR OF THE INQUIRY: Good morning. Yes, Mr Lake. 4 MR LAKE: My Lord, the first witness today is Mark Hamill. 5 MR MARK HAMILL (sworn) 6 CHAIR OF THE INQUIRY: You are going to be asked some 7 questions by Mr Lake, who is the Counsel to the Inquiry. 8 If you just listen to the question and answer it as 9 directly as possible. If there are any explanations, 10 you can add them on. 11 Will you speak clearly into the microphone and 12 relatively slowly, or at a steady pace, so that the 13 shorthand writers can keep up with you. 14 Examination by MR LAKE 15 MR LAKE: Mr Hamill, will you state your full name, please. 16 A. Mark Hamill. 17 Q. What is your present occupation? 18 A. I'm Project Director with Turner & Townsend. 19 Q. Could you pull the microphone towards you very slightly. 20 A. Which one? 21 Q. That one. 22 A. This one. 23 Q. You're being picked up now. 24 I think you were risk manager with tie for the tram 25 project from May 2007 to December 2010? 1 1 A. Yes, that's right. 2 Q. I would like you to look at a document with me. You 3 will see it on screen. It's TRI00000042_C. You should 4 have a paper copy of this in front of you as well. It 5 should be the same document. This is a copy of a set of 6 questions with answers that you provided? 7 A. Yes. 8 Q. I think if you look at the last page of the paper copy, 9 it will have been signed by you? 10 A. Yes. 11 Q. Are you content that this be adopted as your evidence to 12 this Inquiry? 13 A. Yes. 14 Q. I would like to ask you a few additional questions or 15 perhaps clarification of matters arising in the 16 statement. 17 It we look first please at page 8 in the statement. 18 If we look at question 16 and the answer that you have 19 given to it. You were asked a question about your 20 impression of the state of risk management when you 21 arrived. We see your answer to that is: 22 "At the time of my arrival my impression of the risk 23 management process was that it was adequate. My 24 approach was to conduct risk management in 25 a collaborative way with the project team. I focused on 2 1 facilitating workshops and meetings to gain the "buy-in" 2 from the project teams, as I believe this is an 3 effective approach for risk management." 4 I just want to ask you, when you use the word 5 "adequate", is that intended to denote you felt it was 6 just enough but should be better, or did you think 7 everything was fine the way things stood? 8 A. I felt there was room for improvement. There was -- 9 various risk managers had different ways of conducting 10 the risk management process. I just felt I could 11 improve upon the work that had been done already. 12 Q. When you say risk managers, that's people within the 13 team that you were heading? 14 A. No, no, sorry, risk managers in general. 15 Q. I see. So individual risk managers in different 16 companies? 17 A. Yes. 18 Q. Might do things differently? 19 A. Yes. 20 Q. Therefore you felt there was room for improvement within 21 tie? 22 A. Yes. 23 Q. What were the particular areas where you considered 24 there was room for improvement? 25 A. Well, the consultant who had been filling the role prior 3 1 to me focused more on using emails as means of 2 communication, sending risk registers out to project 3 managers, asking for updates, rather than face-to-face 4 conversations or workshops, and I felt that because of 5 that the project managers didn't really buy into the 6 process. I think for risk management to work, you 7 need -- you know, you need collaboration and buy-in from 8 the project team. 9 I didn't feel that that was there, and I felt one of 10 the reasons it wasn't there was because receiving things 11 by email doesn't really help with building relationships 12 or collaboration. So that was one aspect which I didn't 13 think was very good and that was something that 14 I changed. 15 Q. What did you do? You just had meetings with the people, 16 rather than emails? 17 A. Yes, well, restarted the process essentially. We had 18 a workshop with various different teams, 19 cross-disciplinary teams. Focused much more on 20 face-to-face engagement with project managers, and less 21 sending out emails and emailing instructions. 22 Q. Can you explain what you mean by the fact: 23 "We had a workshop with various different teams, 24 cross-disciplinary teams." 25 What was that about? 4 1 A. So, for example, if you were having a risk workshop 2 on -- regards construction, element of construction, you 3 would have the construction project manager there, you 4 would maybe have the cost manager there. Perhaps 5 somebody from finance. Somebody from the scheduling 6 team. So what I mean is the various disciplines within 7 the tie project team, to ensure everybody was buying 8 into the risk management process. 9 Q. What was the intended outcome of those meetings? What 10 did you seek? 11 A. Well, initially to understand what were the risks 12 relevant to the particular area we were talking about. 13 What were we doing about them. And how -- you know, how 14 critical were they. So you've got that the process 15 really, which is the risk identification, risk 16 assessment, and then, you know, risk mitigation. And 17 then the fourth step is the review, is the mitigation 18 working. 19 So the meetings would have been focusing on one of 20 or all of those areas. 21 Q. Was that a matter of -- did you use the existing risk 22 register as a framework for starting that -- 23 A. Yes. Because there was a risk management tool already 24 in place which is referred to in the statement. Yes. 25 So we just -- we updated what was already there. 5 1 Q. Just looking then at those four stages that you have 2 mentioned there, looking at the first stage of 3 identification of risks, did you -- have I understood 4 this correctly, that you carried out a review to check 5 that all risks were properly identified or see if there 6 were any others? 7 A. The review wasn't purely for that. 8 Q. No, is that one of the things the review was intended 9 for? 10 A. Yes. That's one of the things. The idea is have I got 11 a grip of all the risks relating to whatever topic we 12 were discussing. 13 Q. Can you recall whether there were any particular risks 14 that you identified as a result of your exercise that 15 hadn't been there before? 16 A. I can't recall specific risk at that point. 17 CHAIR OF THE INQUIRY: Can I ask you to be quite clear. Did 18 you go through each of the disciplines on the existing 19 risk register and have a meeting with -- about that 20 risk? 21 A. Yes, my Lord. 22 MR LAKE: What's the process to try and ensure that no risk 23 is inadvertently missed from the register and from 24 assessing it? 25 A. Regular risk reviews with the right people and by the 6 1 right people, I mean not just sitting with the project 2 manager, because if you sit with the project manager you 3 might get only his view of the risk and he might not 4 understand the implications of that or you might have to 5 guess what the cost is. So it's regular reviews and 6 meetings with the right people. 7 Q. Essentially you are asking people to try and identify 8 what they haven't thought of. 9 A. Yes. Exactly. I mean, the role of the risk manager is 10 to facilitate that process. It's a facilitation role. 11 That's exactly what it is. You know, it's -- you know, 12 there's a word, "triangulation", gets used sometimes. 13 It's about getting the views of different people, trying 14 to have at least three people in the room. So you are 15 getting the views of different people to come to an 16 agreed -- collaborative agreement. 17 Q. Then the assessment of the risk, that's -- is that -- in 18 terms of the likelihood and its consequence? 19 A. Yes. Yes. So -- yes. 20 Q. What is the process for determining that? 21 A. We would have a -- we had an impact assessment criteria. 22 So you would score the risk against various elements, 23 cost, schedule, et cetera. And again, it would be the 24 same group of people. Because to get an agreement 25 amongst the team over what the right range was. 7 1 Q. So would you have the person, the risk manager -- sorry, 2 the person within the project to whom the risk had been 3 assigned? 4 A. Yes. 5 Q. That would be involved with it? 6 A. Yes. 7 Q. Who else is brought into that exercise of trying to 8 assess, quantify the risk? 9 A. It's the same, you would have somebody from your cost 10 team. So a cost manager, QS. The project manager would 11 be there. Sometimes a commercial manager if it's 12 a contractual issue. So you might have a -- the 13 planning manager there, because if it's a time-related 14 risk, a risk which is -- where the impact is time, 15 rather than safety or money, for example. You would 16 have that person there. 17 And if you couldn't get the people to attend that 18 particular meeting, you might agree that you would then 19 meet with others individually, just to get their view on 20 something. 21 Q. So is it a matter of arriving at a consensus, or is it 22 that the presence of the various other people helps 23 inform the view of the person who is the owner of the 24 risk? 25 A. No, no, it was one of a gaining consensus, gaining 8 1 consensus on that. 2 Q. And then mitigation. What's the process for arriving at 3 measures which might be appropriate to mitigate the 4 risk? 5 A. The same process again. Same people. You know, okay, 6 so you've done the first part of the risk register, the 7 risk and the cause and the effect. You've done the 8 assessment part. And then you say: okay, so now what -- 9 that's the hard part. What are we going to do about it 10 now to try and reduce this, reduce the likelihood or 11 reduce the impact. So it would be the same people 12 there. 13 Q. What's done to test or assess whether or not a suggested 14 mitigation will be effective, whether it will actually 15 work? 16 A. Before it's been done? 17 Q. Yes. 18 A. Nothing. 19 Q. If the risk owner suggests that he thinks a certain 20 course of action would tend to mitigate the risk, is 21 that subject to any scrutiny or testing to see -- 22 A. Yes. Yes. Yes. That would be done as part of the 23 workshop process. So how will that impact, are you 24 trying to reduce the likelihood, are you trying to 25 reduce one of the -- the severity of one of the impacts. 9 1 That would be discussed during that. 2 Q. Because if the risk -- someone is designated as the risk 3 owner and that person is also responsible for 4 identifying the mitigation measures, one could see that 5 there might be quite a lot of pressure on that person to 6 reach the conclusion, that: yes, I have fully mitigated 7 that risk. 8 A. Yes, but the mitigation measures would have an owner and 9 a due by date. So -- and remember that the risk 10 mitigation owner isn't necessarily the risk owner. So 11 you could have three or four different people required 12 to do something to mitigate the risk. So it doesn't 13 read exactly that the risk owner must be the person who 14 has to do the mitigation as well. 15 Q. Then the fourth aspect you mentioned was the review of 16 risk. The fourth stage. How is that conducted? 17 A. Again, they are all done in the sort of workshop 18 environment with the same people as I have described 19 already. And then that then becomes part of your -- 20 once you've got your risk register and you've built it 21 and you think it's in a position to -- you have done the 22 three other steps, then you would have like a monthly 23 review or two or three weekly review of that. So you 24 take how is that going, is that mitigation working, have 25 you done it, have you not done it, why not? 10 1 That was the review process. 2 Q. What if the mitigation isn't working? What's done -- is 3 there a change in the assessment of the likelihood of 4 the original risk or its consequence? 5 A. Potentially. Yes, potentially. So one of the things 6 might be: okay, well, if that mitigation is not working, 7 are there new mitigations we have to do? Okay; or if 8 that's not working, is the likelihood, do we have to 9 increase the likelihood now? And the assessment 10 criteria, because we're finding that we can't reduce 11 that. 12 Q. Once the mitigation for risk has been considered, is the 13 risk quantified post mitigation in terms of its 14 likelihood and its consequence and a value put on it? 15 A. No. That can be done. It wasn't done in the tram 16 project. 17 Q. Because we have heard about a quantitative risk 18 analysis. That was carried out within the tram project? 19 A. Yes, that's right, yes. 20 Q. If the mitigation for risk is not being effective, what 21 effect would that have on quantitative risk analysis? 22 A. Well, the QRA -- the QRA relies upon the input which is 23 the likelihood. 24 Q. Yes? 25 A. And then you have the cost. There's the three cost 11 1 impacts, minimum, most likely and maximum. So if during 2 the risk review it appeared that, for example, a risk 3 was -- the likelihood of that risk was increasing, so 4 you were increasing it in the risk register, you would 5 then have to cross-reference that with the QRA model. 6 Q. When you say cross-reference, does that mean you would 7 in effect have to update the figures in the QRA? 8 A. Yes, because they are two separate documents. The QRA 9 is a separate document from the risk register. It's 10 linked, but it's a separate document. 11 Q. If you are then having a review where you go through the 12 risk register and assess the effectiveness of 13 mitigation, is that likely to have a knock-on effect on 14 the QRA? 15 A. Dependent upon the effectiveness of the mitigation, 16 I suppose, yes. Yes, it would. Yes. 17 Q. If the mitigation is becoming less effective, or has 18 been found to be less effective, that would tend to 19 increase the residual risk; is that correct? 20 A. Yes. 21 Q. That would, as a consequence, result generally in an 22 increase in the QRA figures? 23 A. I'm not sure what connection you are making with the 24 residual risk, sorry. I don't understand. 25 Q. What I am saying really is that if mitigation is 12 1 ineffective, was found -- assessed to be ineffective, 2 one would expect overall the risk to increase. 3 A. Agreed. 4 Q. If that risk is to be quantified, one would expect an 5 increase in the quantification of that risk? 6 A. Correct. Yes. So the four inputs I mentioned regarding 7 the QRA, they would be changed in some way. 8 Q. Now, prior to the project -- prior to the contract 9 close, and the project commencing, that will have an 10 impact on the figure that has to be allowed for risk at 11 contract close; is that correct? 12 A. Sorry, can you repeat the question? 13 Q. If mitigation is found to be ineffective and the risk 14 increases, the consequences of that, prior to contract 15 close, will be an increase in the allowance that is made 16 for risk at the outset? 17 A. If the risk is increased, then the assessment criteria 18 would have been changed and that was reflected in an 19 increase in the QRA output. 20 Q. If the risk -- if mitigation is found to be ineffective 21 while the contract is running, after it's been 22 concluded, is there still an increase in the 23 quantification of risk? 24 A. Yes, because you don't just do the QRA at financial 25 close. The QRA would then be updated periodically 13 1 through the life cycle of a project. Not as regularly 2 as it was during the negotiation and procurement phase 3 and contract close phase, but once it's locked 4 essentially, if you like, you've got a baseline to work 5 from. 6 Q. Is that -- once it's locked at contract close, you get 7 a risk baseline and allowance might be made for, say, 8 GBP10 million? 9 A. Yes. 10 Q. But if the risk increases during the contract, say to 11 GBP11 million, what is done with that? What is the 12 benefit of knowing that? Is it simply that the employer 13 has to make a greater allowance, greater funds might be 14 required? 15 A. Yes. That's essentially your exposure, because if you 16 have, sticking with your numbers for an example, if you 17 have a risk allowance of 10 million, and three months 18 into the project, you're in a QRA and you've now got 19 11 million, you've got a potential 1 million exposure. 20 It's not necessarily mean that's definitely going to 21 happen because you might run a QRA in six months' time 22 again and it might be at 9.5 million. But it informs 23 your potential exposure. 24 Q. So it's -- even while the contract is in place, it can 25 be seen as a forward planning tool? 14 1 A. Yes. 2 Q. In your experience, what is the -- when risk registers 3 are prepared, what is the intended use of these by the 4 project managers, by the project directors? 5 A. Well, there's -- there's probably different uses for 6 different people. The overall purpose of it is to help 7 inform the decision-making process. So when project 8 directors are making decisions, you understand what the 9 risks are within those decisions. They are aware of 10 what the risks are in the project. From a project 11 management perspective, if you're a project manager, and 12 your role is to successfully deliver a particular 13 project, or section of a project, understanding what the 14 risks are and understanding what would prevent you from 15 successfully delivering that project is useful 16 information to have. 17 So it might be used as more of a day-to-day tool by 18 a project manager. 19 Q. What use in your experience might be made of the risk 20 registers by the board of the company undertaking 21 a project such as the tram? 22 A. Well, in my experience most boards want to understand 23 what the key risks are to the company or the project. 24 So it's -- part of the benefit there is informing the 25 board, so the board is aware, because they will want to 15 1 do that as part of their own governance. But there 2 might also be instances where the board is required to 3 take an action of some kind, to mitigate or to do 4 something in order to reduce, if a project is unable 5 to -- has been hindered by a particular risk and it 6 requires a board decision, then perhaps they are able to 7 help with that. 8 Q. What is it that the board will be able to look at then? 9 Is it essentially just the final number, the output of 10 the quantified risk analysis or do they commonly get 11 involved in more of the details of the risk? 12 A. No, it's not -- the QRA is just a numerical part. 13 There's a qualitative part of risk management itself, 14 which is the risk itself and its impact, whether it's 15 high, medium or low, and what is being done about it. 16 So the board will want some kind of assurance that risks 17 are being managed. So they are not just interested in 18 what the number is. 19 Q. Did you have any understanding or knowledge of how the 20 risk registers and risk information was being used by 21 the Tram Project Board at tie? 22 A. No. 23 Q. Could I ask you to look at a document, please. It's 24 CEC0022? 25 A. On the desk? 16 1 Q. It will be shown on the screen. CEC00223543. We can 2 see these are Tram Project Board papers for a meeting 3 due to take place on 30 June 2010. Could we go to 4 page 22, please. Could we rotate that. Could we 5 enlarge from where we see 1077 at the left-hand side of 6 the screen down to the bottom of the page. 7 Is this readable for you? 8 A. It's more my eyesight than on the screen itself. 9 Can I pull this forward? 10 Q. Yes, by all means. 11 CHAIR OF THE INQUIRY: Can it be enlarged? 12 A. It's okay. Can you hear me? I can read it. 13 MR LAKE: We have got the risk. The reference I have given 14 is 1077. What it describes is: 15 "Base date design information to issued for 16 constructions (BDDI-IFC). Lack of visibility of design 17 changes between November 2007 and May 2008." 18 Do you recall this risk arising? 19 A. I recall the existence of this risk, yes. 20 Q. It became a risk of some significance; is that fair to 21 say? 22 A. Yes. 23 Q. What is said to the right of that is the way it takes 24 effect is: 25 "Tramworks price based on a design which may have 17 1 been altered. Unclear who [authorised] said design change." 2 You can see that also. 3 A. "who authorised", I think it's "who authorised", I think 4 it says. 5 Q. Yes, sorry. My eyesight is perhaps even not as good as 6 yours. 7 Who provided the information to make that -- to 8 represent the risk in that way? That was the issue? 9 A. I can't recall the individual who highlighted that. 10 I know -- I remember there being discussion at length 11 about it with Steven Bell. I don't -- to answer your 12 question, I don't know who raised it or highlighted it. 13 Q. If something like this happened in the course of 14 a project, that a problem became apparent, what was the 15 channel for getting the information to you about the 16 risk, so that it could be included and assessed? 17 A. There was more than one channel. So there would have 18 been the regular reviews with the project managers which 19 took place on a monthly basis, in order to inform the 20 monthly project report. However, when -- there was also 21 risk reviews held with the management team. By that, 22 I mean the project directors. 23 So risks would also materialise during the course of 24 that meeting as well. 25 Q. We can see that the effect of the risk is said to be 18 1 additional cost and programme delay. The risk owner is 2 Steve Bell. 3 Then to the right of it, we have got a number of 4 different proposed or actual treatment strategies? 5 A. Mm-hm. 6 Q. Now, some of those, five or six of them, are marked as 7 complete. Why are the strategies that are complete left 8 in there if they're over and past? 9 A. Well, this -- I think what Steven wanted was to show 10 things that had also been done. So it wasn't a case 11 of -- because if you took the complete ones off, 12 sometimes you may only be left with two and somebody 13 might say: did you not try this, or did you not try 14 that; so it was to show what had been done in the past 15 as well. 16 Q. But in terms of the effectiveness of any of these 17 treatments, there's no record put in here of how they've 18 been effective; is that correct? 19 A. That's correct. 20 Q. If we just go -- if we could go back to the broader 21 picture, we see there's a red box just to the area we've 22 looked at? 23 A. Yes. 24 Q. It's under the heading, "Significance", and we can just 25 make it out. It's: 19 1 "High 25". 2 A. Yes. 3 Q. What does that signify? 4 A. Under the scoring mechanism and the qualitative methods 5 of the impact assessment criteria, that was essentially 6 the highest the risk could be. So if we take it in very 7 simple terms, it is a 5 by 5 risk matrix. So you can 8 imagine the top right being the highest risk area, if 9 you understand what I mean? 10 Q. Yes. 11 A. 5 by 5 is 25 so ... 12 Q. If this risk was actually coming to light at the time, 13 that there were difficulties with additional cost in 14 programme delay as a result of these design changes, can 15 you explain why it is still felt appropriate to treat it 16 as a risk even though it's actually happening? 17 A. Because on a project you still have to report on these 18 things and quite often risks, even though they are 19 occurring, will still appear in the risk register while 20 they are live. This really is a matter of record, 21 because to remove it from the risk register essentially 22 there's -- where else would you put it? So it's -- it 23 would -- it will have been referred to in detail within 24 reports, I'm sure that were going. This wasn't the only 25 place where the risk was referred to. 20 1 But it's common. The risk is happening. There's a 2 number of things being done. Bear in mind this is 3 a board report. So the purpose here was to show the 4 board that this is a significant risk. But this is what 5 the management team are doing to try and -- try their 6 best to mitigate it. 7 Q. In terms of you trying to take that board and quantify 8 that risk, what would you do to try and -- sorry, the 9 effect we are talking about is additional cost and 10 programme delay. You would have to assess both the 11 likelihood of that and the magnitude of that, the extent 12 of that? 13 A. The potential cost impact, yes. 14 Q. Can you recall what was done to try and assess, first of 15 all, the likelihood of additional cost and programme 16 delay? 17 A. I can't recall specifically a meeting about that, but 18 what I do recall is that the numbers which fed into the 19 QRA model regarding these risks were being provided to 20 me by people who were closer -- who were close to -- who 21 were dealing with the risk. 22 Q. Dealing with the underlying problem? 23 A. Yes. 24 Q. Can you remember who was providing that information? 25 A. Well, it came -- it came in a number of forms. 21 1 Regarding the specific risk, I can't remember who 2 provided the information regarding that specific risk. 3 It may well have been any one of Steven Bell, 4 Stewart McGarrity, Susan Clark. I'm not sure who -- 5 I can't recall who specifically. Bear in mind I'm -- 6 I was having conversations about dozens of risks 7 every -- every day and every week. So it's hard to 8 remember precise details about individual risks. 9 Q. I appreciate -- 10 A. It would have been one -- it would have been one of the 11 project directors. One of that management team. 12 Q. This was quite a major risk, wasn't it, at the time? 13 The date on issue on the top right-hand corner is June 14 2010. 15 A. Yes. 16 Q. This must have been taking up a lot of your time, 17 I imagine, in terms of risk. 18 A. Yes. There was -- there was lots of risks though. So 19 there was -- there was a lot going on in terms of my 20 time. 21 Q. But in terms of trying to get the project under way, 22 there were huge delays in trying to get the on-street 23 works moving, even delays in getting the off-street 24 works moving? 25 A. Yes. 22 1 Q. A lot of it might have been thought to have been 2 attributable to this risk? 3 A. Yes. Yes, I mean, by the time you get to -- I can't see 4 the date, but I think you said June 2010. I think, you 5 know, at that point the project was obviously in 6 distress and there was DRPs. So there was a lot of 7 things going on which I wasn't involved in. 8 Yes, a lot of those issues could have been 9 attributed to this risk, yes. 10 Q. What information were you being provided to help you 11 quantify that risk? In terms of the cost and the delay? 12 A. The numbers that will have fed into the QRA, if that's 13 what you mean in terms of information, I think that's 14 what you are asking. 15 Q. Yes? 16 A. That was coming from -- the people -- the project 17 directors who were -- who were dealing with these 18 issues. 19 Q. As this risk -- this problem continued about design 20 changes, can you recall, were there changes in the 21 numbers that you were being provided as to the cost of 22 it, or even the likelihood of it eventuating? 23 A. I mean, the likelihood -- the risk was happening, 24 I think what -- by the time we reached this point, in 25 2010, I think the exercise was more around what do we 23 1 think -- if my memory serves me right, we were now 2 looking at what the final outturn cost was going to look 3 like. So it wasn't about, you know, just this 4 particular risk. It was okay, what else, what other 5 disputes is there, what else could materialise. 6 Q. That's really what I was interested in when I say the 7 fact this was actually happening. To what extent was 8 this really a matter of trying to assess the value of 9 this risk or -- and had it turned into a matter which 10 was really trying to work out what the final -- 11 anticipated final cost was? 12 A. Yes. That's pretty much what it had turned out. 13 I think there's a number of documents which I received 14 that were prepared by the commercial team, between the 15 commercial and the finance departments. And they gave 16 their view on what -- those numbers could potentially 17 look like. 18 Q. The anticipated final cost? 19 A. Yes, it fed into the whole anticipated final cost of the 20 project, but obviously part of that is risk. But 21 I think -- 22 Q. Which part of it is risk, just so I can be clear? 23 A. If you're trying to calculate a new -- let's call it 24 EFC, estimated final cost, you are going to have work 25 still to be done, other items of the project, and then 24 1 you are still going to have your risk element in that. 2 But by the time we got to this, we weren't really 3 looking at it from a risk point of view. I think what 4 was happening was the commercial team and the finance 5 team were working to prepare some kind of report or 6 information about what the ultimate estimated final cost 7 would look like. 8 Q. So it really wasn't by this stage being quantified as 9 a risk. It was being quantified as this is just part of 10 what the contract was in fact going to cost? 11 A. Yes. 12 Q. That is in a sense why I asked my initial question about 13 why was this still appearing in a risk register, to be 14 treated as something that was a risk, which suggested it 15 might or might not happen, whereas in terms of assessing 16 the financial impact, it was being valued as what is 17 happening? 18 A. Yes. 19 Q. Is that not slightly odd there is an inconsistency 20 between those two? 21 A. Yes. Bear in mind, the purpose of this document was to 22 update the board on key risks, issues, so, yes, you are 23 right. You could argue that: okay, it shouldn't have 24 been in the risk register. It should have been in the 25 body of the report. 25 1 Q. Could we slow down just a little bit to give the 2 shorthand writers a chance? 3 A. Sorry. 4 Q. What you were saying, bear in mind the purpose of this 5 document was to update the board on risks. You could 6 argue that it should be in the risk register and the 7 body of the report. 8 A. No, sorry. You could argue that if it's no longer 9 a risk, it's not a commercial issue. So you might 10 say: we will take it out of the risk register and put it 11 under the commercial section. 12 Q. Was there a discussion about whether or not that should 13 be done? 14 A. I don't remember there being a discussion about it. 15 I do remember querying why certain things were in the -- 16 in the EFC that was being prepared. I queried why we 17 had things in there that weren't risks. It seemed that 18 we were putting a lot of things under the banner of risk 19 as we tried to calculate the final cost. 20 Q. What sort of thing was going in as risk where you 21 thought -- 22 A. Things like this. You know, an estimate to -- I think 23 there was a document which spoke about settlement of 24 commercial disputes. My view was that should have been 25 a separate line item as part of the overall cost. But 26 1 instead it was under the risk banner. 2 Q. Are you able to say whether there's a benefit on the 3 commercial side in keeping things out of the commercial 4 assessment and pushing them across to risk? 5 A. I just think, because you end up having conversations 6 like this, because you could say, well, why was -- if 7 you look at the sheet and you say: why have you got that 8 under risk; because you know you are going to have to 9 make a payment of some kind. You know you've got 10 a range. Make it a separate item within the project 11 budget. 12 Q. Could we look in the upper part of this sheet. If you 13 enlarge the upper left-hand quarter, risk 343. The 14 cause of this risk is said to be: 15 "General delay to programme with various causes, for 16 example failure to obtain approvals on time, 17 contractor issues, access after completion of utility 18 diversions." 19 The event is: 20 "Delay to completion of project." 21 The effect is: 22 "Increased out-turn cost due to delay plus revenue 23 loss." 24 That initial wording of "general delay to programme" 25 sounds like it is very much a sweeper-up category. Is 27 1 that a fair comment? 2 A. It's a fair comment. I think most project risk 3 registers will have a risk relating to potential delay 4 costs from things that were unanticipated. And that's 5 what they referred to. It was a general programme delay 6 risk, I think. 7 Q. We have finished with that document now, thank you. 8 I'm going to ask you some questions now about how 9 the risk allowance was utilised when the contract is 10 under way. 11 Could we look back at your statement, please, at 12 page 6. And enlarge paragraph 13. What we can see is 13 the question asked was as to your understanding as to 14 how the risk allowance would be used, once the contract 15 was awarded. And the Tram Project Board approved risk 16 drawdown. What option was there but to approve it? 17 What would have happened if the request was being 18 refused? 19 I'm not quite sure from your answer there, 20 I understand the responses to these questions. If there 21 was a risk allowance there at the outset, how is it 22 drawn down or used as the contract proceeds? 23 A. Well, the mechanics of drawing down follow the change 24 control process. So on any project you will have 25 a change control process. And that meeting was held, 28 1 I think, every couple of weeks, I can't remember. And 2 there was a risk drawdown form, and if in the course of 3 the period between change boards, there was a desire to 4 draw down the risk allowance, then the form had to be 5 completed, explanation given as to why you were -- what 6 risk you were drawing down from, et cetera, what you 7 were -- why it had to happen, justification, supporting 8 paperwork, and then it would go to that meeting, and 9 a decision may be made at that meeting. 10 Q. The change control process under the contract would be 11 a means of identifying when additional sums become due 12 to the contractor? 13 A. No, this isn't the change control process under the 14 contract. This is the change control process inside 15 tie. So how would tie draw down on that. The 16 contractor wasn't going to draw down the risk allowance. 17 It was how did somebody in tie draw down on that risk 18 allowance, is what I'm describing. 19 Q. When a problem arises, and it's thought there's going to 20 be delay or additional cost, what choice is there but to 21 make the allowance to draw down and pay out the money 22 where appropriate? 23 A. Well, if it's -- if under the contract the contractor 24 was entitled to it, then why -- it was up to -- the 25 commercial manager would present the changes. And he 29 1 would explain why. If you think the commercial manager 2 was essentially the first gatekeeper. He would only 3 bring something to the change meeting that he believed 4 was an actual change. So he may well have been 5 receiving change requests from a contractor and 6 rejecting them. And that would have been captured in 7 correspondence. 8 At the time it came here, he would then explain why 9 we had to draw down on it. 10 Q. I can see the drawing down process -- 11 A. Yes. 12 Q. -- if it is done at board level -- 13 A. Yes. 14 Q. -- means that the board will be aware of how much of the 15 risk allowance that is essentially gone and how much is 16 left. 17 A. Yes, it wasn't done at the board. It was done in the -- 18 the meeting was chaired by Steven Bell. I think he had 19 a delegated authority up to a certain figure. I can't 20 remember what the figure was. So not every change had 21 to go to the board. You wouldn't set a project up like 22 that, because you would be constantly having board 23 meetings. 24 So I think changes up to a certain value, he was -- 25 he was able to authorise under the DOA. 30 1 Q. Is this process one really of bringing to either the 2 tram project directors or the board's attention how much 3 of the risk allowance has essentially gone? 4 A. Yes. 5 Q. And how much is left? 6 A. Yes. I mean, the board were updated on that, I think, 7 as part of the board meetings. It definitely went into 8 the monthly reports. 9 Q. If we just look at a board report by way of illustration 10 of that, please. If we look at CEC00843272. Go, 11 please, within that to page 19. 12 I think this is a risk drawdown paper; is that ... 13 A. So this wasn't the form we used. We had an actual form 14 which we used for the project. This is -- this has been 15 drafted into a memo format for the purpose of the Board. 16 I think if you look at the value -- sorry, yes. 17 Q. I was going to say, why is this prepared? Why is this 18 sent to the Board? 19 A. Because of the value. As I say, I'm not sure what 20 Steven's delegated authority was. I think it might have 21 been GBP1 million. I'm not sure. But this was over 22 the -- this was over his authority level. So therefore 23 it had to go to the Board. 24 Q. If we look up towards the top of the screen, the first 25 paragraph there, we can see this is seeking to draw down 31 1 GBP2 million, because it's cost of works that had been 2 carried out under the Princes Street Supplemental 3 Agreement. 4 There will be evidence to the Inquiry that that was 5 something being entered into in early 2009, after the 6 contract had been concluded. You will have been aware 7 of that? 8 A. Yes. 9 Q. So when an agreement like that is entered into, was 10 there specific allowance made for the possibility that 11 additional costs would arise under that agreement? 12 A. I don't recall there being additional risk monies set 13 aside relating to the Princes Street Supplemental 14 Agreement. 15 Q. So when something like this happens and you have 16 suddenly got to find an additional GBP2 million, but 17 there's nothing in the risk -- there has been no risk 18 allowance made for it, does there have to be some 19 further allowance in the risk allowance made so that you 20 can draw, or do you just simply draw from the money set 21 aside for other risks? 22 A. In this instance I'm not sure which risk it drew down 23 from. If you can give me a second. 24 Yes. So there was a risk allowance. Sorry, it says 25 here, it is to be withdrawn from a risk allowance 32 1 allocated to Infraco. So I don't know which -- there 2 was obviously an Infraco risk allowance as part of the 3 overall QRA risk allowance, and that's where that is 4 coming from. 5 Q. I want to just ask you some questions about -- briefly 6 about the Office of Government Commerce. If we go to 7 page 3 of your statement. In the very last paragraph 8 above paragraph 6, it begins, "The City of Edinburgh 9 Council". You note there that the risk registers were 10 also externally audited by the Office of Government 11 Commerce. I want to understand what you meant by the 12 fact that the risk registers were audited by OGC. 13 A. Well, it involves me sitting, spending time with them, 14 going into the risk registers in detail. Discussing the 15 risks. The process, scores, and then them reporting 16 on -- providing findings or a report on that. 17 Q. We have heard that the OGC did what were termed Gateway 18 Reviews, the last of which was in the later part of 19 2007. 20 A. Yes. 21 Q. Was that the time that they did that audit? 22 A. I dealt with them more than once. So I don't know 23 which -- and it was the same both times. So they came 24 twice in my time there. 25 Q. You started in 2007? 33 1 A. Yes. May. 2 Q. Do you have any idea of how long after it was you 3 started they came the second time? 4 A. No, it must have been quite early the first time because 5 Matthew Crosse was still there. I remember 6 Matthew Crosse being at the kick-off meeting and he left 7 in 2008. So I think it would have been in -- I can't 8 remember. 9 Q. Is that both visits were while Matthew Crosse was still 10 there? 11 A. No, I think he had gone by the second time. 12 Q. Just in terms of what they did, they looked at the risk 13 registers and discussed them with you; is that correct? 14 A. And others. 15 Q. And others. 16 A. Yes. 17 Q. Did they do any potential verification or testing of the 18 quantification and the assessment of mitigation? 19 A. They asked me to explain the rationale behind the 20 numbers. So when I was preparing the QRA, obviously the 21 numbers that were going into it needed to be 22 substantiated. And they would ask me. They didn't do 23 it with every single one. That would have been too 24 time-consuming, I imagine, but they focused on the 25 higher risks, the more major risks, and asked for 34 1 substantiation and where we got the numbers from. 2 So what we would have to do is then go away and 3 prepare some work and come back and explain it to them. 4 Q. Can you remember who it was who came from Office of 5 Government Commerce and had these discussions with you? 6 A. I remember there was a guy called Mike Heath. A guy 7 called Willie Gillan, I think is his name. 8 The second time it was -- that's the only two names 9 I can remember of the people who were there. 10 Q. I want to turn now to look at some issues concerning the 11 design risk within the project. The Inquiry has heard 12 some evidence that it was in the Draft Final Business 13 Case, the design would be 100 per cent complete by the 14 time the contract was let. That's the Infraco contract. 15 But in fact that wasn't the case. And you will be aware 16 of those factors, were you? 17 A. I remember being informed that as far as the procurement 18 team were concerned, the commercial team, that that 19 would be complete. 20 Q. One of the reasons in the Draft Final Business Case for 21 having that design complete was that it would de-risk, 22 serve to de-risk the procurement process. 23 A. Agreed. 24 Q. Now, inasmuch as the design wasn't complete, that would 25 tend to suggest that there was an increased risk when 35 1 the contract was entered into. Were you involved in 2 discussions as to that risk and how it could be or 3 should be quantified? 4 A. No. 5 Q. Were you aware whether it was in fact quantified and 6 inserted into the risk register under any heading at 7 close? 8 A. I don't think there was a new risk inserted. The 9 negotiations with the Infraco contractor regarding SDS, 10 I wasn't party to them. So I didn't -- I wasn't aware 11 of what was being agreed or discussed. And therefore 12 I was reliant upon others to inform me if there needed 13 to be a risk number associated with that risk. 14 Q. By the time the contract was entered into in mid-May 15 2008, do you recall receiving any communication to 16 indicate that there were additional risks retained by 17 tie that would have to be priced? 18 A. I don't recall receiving an email telling me that, to 19 include risks. What was happening was during that 20 process leading up to contract award and financial close 21 was that I was being given information by those doing 22 the negotiations. 23 Q. What information were you given? 24 A. So, for example, if there was a risk within the QRA and 25 we had -- there was numbers against it, if -- sometimes 36 1 that risk would be reduced, based upon what happened in 2 the meetings with the bidders. 3 Q. Can I ask you about that. Can we look at a production, 4 please, CEC01489953. You will see there's a short email 5 chain here. If we start looking at the lower half of 6 the screen first, you can see there's an email from 7 Stewart McGarrity to various people within tie, it was 8 copied to you. 9 A. Yes, yes, I have seen -- 10 Q. Dated 11 February 2008? 11 A. Yes. 12 Q. What Mr McGarrity says is: 13 "The attached spreadsheet has the numbers which 14 I intend presenting to Tram Project Board on Wednesday 15 as showing where we will stand on our budget at 16 financial close. I propose issuing the first three tabs 17 of the spreadsheet as handouts with appropriate 18 supplementary notes. Please can you look carefully at 19 the numbers (which reflect the latest negotiation 20 concluded with BBS last week)." 21 He does make a note that there are still a couple of 22 things not reflected, and the third bullet point is: 23 "Update to QRA based on risk allowance at final 24 close." 25 A. Mm-hm. 37 1 Q. Did you understand that he would be taking a final view 2 on risk allocation at financial close? 3 A. No. 4 Q. What did you understand that reference to the final 5 bullet point -- what did you understand it to be 6 referring to? 7 A. Well, it's referring to -- it's referring to the updated 8 numbers in the spreadsheet that was attached. 9 Q. What would generate the need for an update of those 10 numbers at financial close? 11 A. What the position is with regard to risk. So -- 12 Q. So is that understood that in the course of financial 13 close, there might be changes to risk? 14 A. Yes. As you reach the point of contract award, there 15 can be some -- for want of a better phrase, horse 16 trading between the contractor and the client. So you 17 may decide to transfer risk to the contractor and for 18 that reason, take money out of your risk allowance and 19 stick it in the contract. 20 Q. That's really what I was getting to -- 21 A. That could happen. 22 Q. -- that there might be changes in risk allocation, 23 contractual changes in risk allocation, and they have to 24 be reflected in the QRA? 25 A. Yes. 38 1 Q. But if we look at the upper half of the screen for 2 a moment, we can see it's your reply, also dated 3 11 February, to Mr McGarrity, copied to Steven Bell. 4 You say: 5 "Stewart, the sheet which is titled 'Summary P11' 6 contains information relating to the risk allowance 7 which I'm not aware of. 8 You are more involved in the negotiations than me. 9 Therefore I assume that where you have reduced the risk 10 allowance you are content or have been assured that this 11 is correct? I reviewed those risks which are included 12 in the QRA on Friday and input will be required from 13 others before we can amend these risks. 14 I've attached the QRA with my comments and you'll 15 notice at the end a number of queries regarding 16 potential 'new risks'. Again, I would prefer someone to 17 let me know if these issues need to be catered for in 18 the risk allowance. 19 Stewart, my main concerns here are that (a) we are 20 reducing the risk allowance while the risk has not 21 actually been transferred or closed and (b) the new risk 22 allocation is not sufficient for the risks which tie 23 will retain. I cannot overstate how anxious I am to 24 ensure that the final QRA truly reflects the actual risk 25 profile at financial close. 39 1 Perhaps you have the information required to deal 2 with the points raised above. If you want to meet to 3 discuss then please let me know. I believe you, Steven, 4 and I (as a minimum) must fully understand what we are 5 entering into at financial close." 6 That email, the tone of it, seems to be reflecting 7 some quite serious concerns in the contents of the 8 spreadsheet that's being put forward. 9 A. Yes, that's correct. I was very concerned. 10 Q. The risk has been reduced without any apparent 11 justification for that risk being -- that reduction 12 being made? 13 A. Yes. If you look at the Excel spreadsheet, there's 14 a number which tallies with my cost QRA, and you see 15 a number of reductions against some of the line items, 16 and I had no idea where those numbers came from, and 17 I was obviously very concerned as to why it was being 18 changed without any apparent justification. 19 That's why I have said you're part of the 20 negotiations, perhaps there's a reason for it, but we 21 need to understand. 22 Q. You also say that you would expect information from 23 others before amending those risks. Which others did 24 you have in mind? That's in the first -- the second 25 paragraph there: 40 1 "I reviewed those risks which are included in the 2 QRA on Friday and input will be required from others 3 before we can amend these risks." 4 A. Sorry, I think this is talking about -- sorry. 5 The others would have just been the people involved 6 as part of the negotiations to check that the numbers 7 within the QRA were still correct. There was -- it was 8 a moving feast and it was changing almost on a daily 9 basis, dependent upon what was being discussed with -- 10 as part of the negotiations. 11 Q. If you look at the fourth paragraph there, when you 12 state in the last sentence: 13 "I cannot overstate how anxious I am to ensure that 14 the final QRA truly reflects the actual risk profile..." 15 The clear inference from that is that you consider 16 at that time that you do not consider that the QRA which 17 Mr McGarrity proposed sending truly reflects the actual 18 risk profile. 19 A. Well, it didn't reflect the risk profile as I understood 20 it, because in the spreadsheet there is -- there are my 21 numbers, if you like, from the QRA, which I believed 22 reflected the risk profile. 23 There had then been some significant reductions, and 24 without any explanation or evidence as to why those 25 numbers had been reduced. 41 1 Q. When this question is put to you in your statement, you 2 respond by saying that you don't recall receiving 3 a response by email. Did Mr McGarrity speak to you 4 about this? 5 A. Yes. 6 Q. Was he happy about your query being put to him? 7 A. No. 8 Q. What did he say to you? 9 A. The gist of what was said was that my role here was to 10 follow what was -- the instructions I was being given, 11 and there were people involved in the negotiations who 12 had more knowledge than me. 13 Q. Was he angry that you had queried the QRA? 14 A. He wasn't happy. No, he wasn't happy at all. 15 Q. Was he angry? 16 A. Yes. 17 Q. Did he provide you with any justification for the change 18 or did he just tell you that it was to be made? 19 A. I don't recall ever receiving justification. That's why 20 I have said it in my statement. If there was an email 21 out there that I'm not aware of -- but I don't recall 22 ever receiving justification. 23 Q. Were you happy being put in a position where, as the 24 risk manager, you were being told that a QRA would be 25 put up which you thought was unjustified? 42 1 A. No, I was very unhappy. 2 Q. Were you able to do anything about it? 3 A. Well, I'd raised it with Stewart. I think there was 4 also subsequent conversations with other members of the 5 management team, but Geoff Gilbert was involved. But 6 no, ultimately, no. I was -- I mean, it became -- 7 basically told for want of a better phrase: get back in 8 your box. You know, there's -- I was in danger of … 9 become an irritant by challenge, by challenging, and, 10 you know, a colleague at one point, another colleague 11 said to me to be careful because you're going to be in 12 danger of losing your job if you keep going back and 13 challenging. 14 Q. Was that -- 15 A. This kind of information. 16 Q. Was the threat of actually losing your job made to you? 17 A. It wasn't made to me. But it got to the point -- bear 18 in mind these guys were all -- they were the senior 19 management team and I think there's only so much -- 20 I felt I'd pushed and pushed as far as I could. 21 Q. When you say these guys, you mentioned Stewart McGarrity 22 and Geoff Gilbert. Was there anyone else involved in 23 essentially telling you to shut up? 24 A. No. I mean, Geoff was -- Geoff was leading the 25 procurement. And he was -- when he used to -- when he 43 1 handed me a sheet which very often happened with 2 scribbles on it, on the cost QRA, when I challenged him 3 as to why we were changing the numbers, he would -- 4 frustrated. 5 Q. He was frustrated? 6 A. Yes, at me challenging them, as to why we were changing 7 it. 8 If you imagine there was a -- the QRA, as you've 9 seen them, people were taking them into meetings, in 10 hard copy. And then what would quite often happen is 11 Geoff, for example, would hand it back to me with 12 scribbles on the sheet as to what the numbers were to be 13 amended to. 14 Q. I'll come back to that in a moment. Just to understand, 15 if the QRA is changed so that the total risk allowance 16 is reduced, that will have the effect of lowering the 17 overall project cost? 18 A. Correct. 19 Q. So it would possibly enable a project to be brought in 20 under a specified budget on paper? 21 A. On paper. 22 Q. But it would mean that you were doing that at the 23 expense of ignoring a risk which had been thrown up by 24 the processes that had been put in place by your 25 predecessor and you? 44 1 A. On paper that's right, yes. 2 Q. When you say on paper, that's what's happening, isn't 3 it? It's a matter of burying or ignoring risks that had 4 been thrown up by the risk process? 5 A. Yes. I had no evidence to suggest that somebody was 6 simply reducing the number to make it fit in an 7 envelope. 8 Q. You had been given, as you say, a marked-up spreadsheet? 9 A. Yes. 10 Q. And told that is to be the risk number? 11 A. Yes. Based upon -- sorry. 12 Q. What were you going to say? 13 A. Based upon discussion they'd had with the contractor 14 that day. 15 Q. Commercial negotiations? 16 A. Yes. So, for example, one of the questions I would ask 17 is: what's changed in this risk that means we can lower 18 the number? What does the contract now say? Can I see 19 the contract? Can I see what's happening. 20 Q. What were you told in response to that? 21 A. No, just change the number. 22 Q. You described how the risk is built up through a mixture 23 of your meetings -- 24 A. Correct. 25 Q. -- and then a constant risk analysis? 45 1 A. Yes. 2 Q. That's supposed to produce a final number? 3 A. Yes. 4 Q. What you're describing now is the result of commercial 5 negotiations coming out and saying: that's the final 6 number, fix it. 7 A. It wasn't quite the overall number. They were changing 8 the numbers within -- against individual risks, which 9 obviously has an impact on the overall final number for 10 the risk. 11 Q. If we could look just at another email for the moment. 12 It's CEC01423172. 13 What we can actually see is that is the first email 14 in the chain we looked at just a second ago. 15 A. Yes, yes, that's right. 16 Q. What I would like you to do is doing that just so we can 17 identify this time the attachment to it, to look at the 18 spreadsheet that was sent to you by Stewart McGarrity. 19 It's got the next sequential number, CEC01423173. 20 This is a spreadsheet, I don't know if it has to be 21 shown differently. 22 If we look -- yes, that's actually fine just where 23 we are at the moment. 24 We can see this is a spreadsheet with the slightly 25 truncated heading, phase 1a budget at final close. 46 1 If we look at the lower line, T999, totals, we can 2 see that the budget, first of all, at AFC, the P11 3 report, was GBP498 million. 4 A. Mm-hm. 5 Q. Do you know what's meant by AFC P11 report? 6 A. I can't see -- sorry, at the top. 7 Q. Yes. 8 A. I'm guessing it's anticipated final cost. I'm not sure. 9 But that's what it might be. And P11 would have been 10 period 11. So there was -- we reported in terms of 11 four-week periods. 12 Q. Then we can see two columns to the right, FBC. I take 13 it that would be the Final Business Case cost? 14 A. Yes. 15 Q. It's brought out at exactly the same? 16 A. Yes. 17 Q. Then we can see columns headed "Infraco Award", "Tramco 18 Award" and "Other Costs"? 19 A. Mm-hm. 20 Q. Before fin close or final close -- 21 A. Financial close. 22 Q. -- being stated in the column far to the right. We can 23 see the effect of that is it comes out at exactly the 24 same total cost of 498 million. 25 A. Yes. I can see that. 47 1 Q. We can see there's a line a row or two above that, in 2 the left-hand line, T44, and then the title, "Total 3 Risk", and there are -- quite substantial reductions 4 have been made in the risk? 5 A. Yes. 6 Q. Were these the risks -- the reductions in risk that gave 7 you concern, or some of these in part were risks that 8 gave you concern? 9 A. That's exactly what I was responding to. When I seen 10 that, and I had seen that that number -- the 48974 11 number, yes? You can see that. 12 Q. Yes, that's under the heading "FBC" on the line total -- 13 A. So that tied in with the cost QRA which we had, and now 14 I received this spreadsheet, and that number is reduced 15 to 30 million, or 30.3, if you look across at the fin 16 close column. So you can see where there's been 17 a reduction. Across those areas. Infraco, Tramco and 18 others. 19 Bear in mind I had received this out of the blue, 20 with no explanation as to how these numbers had been 21 derived. 22 Q. You don't recall ever having received any explanation 23 for that reduction? 24 A. No. I don't recall receiving an explanation, no. 25 Q. We have finished with that document now. 48 1 I want to ask you about some other documents now. 2 Could we have production, please, CEC01295328. You can 3 see it's an email chain. If we start looking at the 4 lower email. 5 A. Yes. 6 Q. You will recognise this email; yes? 7 A. Yes. I received it from the Inquiry team, yes. 8 Q. We can see it's from Graeme Bissett to Steven Bell and 9 others, including yourself, dated 15 May 2008? 10 A. Yes. 11 Q. That was actually the day, I think, that the Infraco 12 Contract was concluded? 13 A. Okay. 14 Q. Were you aware of that? 15 A. I knew it was -- I can't remember the precise date, but 16 I knew it was on or around that date. 17 Q. I think we have heard that information continued to be 18 provided to the Council about the contracts even after 19 financial close. Were you aware of that? 20 A. Yes, because if you look at what happens to this email, 21 we are talking about the end -- 27/28 May and we are 22 still preparing numbers. 23 Q. We see that what Mr Bissett says here is: 24 "After all the twists and turns of the last 25 fortnight, we need to arrive at a final form settled 49 1 base cost and risk contingency. I think it's important 2 that the baseline is crystal before change orders start 3 to appear from all quarters. 4 I suggest a discussion on Monday with Stewart back, 5 commando knife between the teeth. Say 11.30 for an hour 6 if that suits. 7 There are two groups of information relevant to 8 this: 9 The final deal terms paper, copy attached, contains 10 the details of how we dealt with the BB gouge. 11 The subsequent SDS deal involved confirmed numbers 12 on accumulated change controls and ER's alignment plus 13 their gouge. Steven and/or Dennis know the details." 14 In terms of referring to gouges, that's, I take it, 15 a reference to further demands for money that were made 16 by both Bilfinger and SDS? 17 A. I'm assuming so. Bear in mind I wasn't part of any of 18 those meetings. So this is sort of coming out of the 19 blue for me. We are aware there's been things 20 happening, but yes, I took it to mean that. 21 Q. At the time, that is 15 May 2008, were you aware that 22 deals had been done, particularly with Bilfinger, where 23 they were to be paid additional costs as a result of 24 last minute discussions? 25 A. I hadn't been formally told, but there was rumours 50 1 within the office circulating to that effect. 2 Q. If we look at the email at the upper part of the screen, 3 please, we can see this is from Stewart McGarrity. 4 A. Mm-hm. 5 Q. And once again to a number of people on the last email, 6 and again including yourself. It's dated 19 May which 7 I think would have been after the Monday referred to. 8 It says: 9 "Following our meeting today, the attached wee 10 summary lays out a simple recon of how I think we get 11 from the last reported estimate (GBP508 million) to our 12 final control budget (GBP512 million) including the SDS 13 increases. This is consistent with Graeme's paper in 14 respect of Infraco except that the risk allowance is 15 reduced by GBP1.1 million to fund the SDS increases. 16 Mark will adjust the QRA accordingly." 17 Do you understand what was meant -- I should ask 18 firstly, were you at the meeting that took place on that 19 day? 20 A. I must have been. He's put "following our meeting 21 today". I can't recall the meeting, but I'm assuming 22 I was there if he's addressed the email in that fashion. 23 Q. Do you understand what was being done when he talks 24 about reducing the risk allowance by GBP1.1 million to 25 fund the SDS increases? 51 1 A. No. 2 Q. We've seen in the lower -- first email we looked at, 3 there was to be additional payment to SDS? 4 A. Yes. 5 Q. If we understand the Inquiry has also heard evidence 6 from meetings taking place before the Council that they 7 had agreed a final budget. It would be necessary then 8 to keep the costs of the contract within that final 9 budget. That would be an understanding? 10 A. I wasn't -- sorry, what meeting are you talking about, 11 sorry? 12 Q. Were you aware that meetings had taken place at the 13 Council by this time to agree the final budget for and 14 give approval for the project? 15 A. I knew meetings were taking place regarding budgets. 16 When I seen this email and seen final control budget at 17 512, that was the first time I had seen that. I didn't 18 know that was the approved final control budget. 19 Q. If you were going to pay an additional sum of money to 20 SDS, and still stay within that budget, that money would 21 have to be taken from somewhere else. 22 Was your understanding that that money was to come 23 out of the risk allowance? 24 A. No. I think there's a follow-up email to me 25 saying: Stewart, can I speak to you, please. 52 1 Q. We will come to that. 2 A. So I read this email and I wasn't quite sure. I didn't 3 understand what was being asked of me. I know it says: 4 "Mark will adjust the QRA accordingly." 5 I didn't know what that meant. 6 CHAIR OF THE INQUIRY: I think, Mr Hamill, there may be 7 other subsequent emails that you sent, but you were 8 being asked about this one that was sent to you: what 9 did you understand? 10 A. Okay. 11 CHAIR OF THE INQUIRY: Was the idea in this email, I'm not 12 suggesting you're part of it, but was the idea to find 13 the GBP1.1 million for SDS increases by reducing the 14 QRA, which would then keep the figure within the overall 15 cost? 16 A. Well, my Lord, I think, if you look at the last 17 sentence, the sentence says: 18 "... in respect of Infraco except that the risk 19 allowance is reduced by GBP1.1 million to fund the 20 SDS..." 21 CHAIR OF THE INQUIRY: Yes. 22 A. So reading that, it looks -- yes, I read that as we are 23 taking 1.1 from that risk section, and giving it to SDS. 24 MR LAKE: You're being told you're going to adjust the QRA. 25 Had there been any discussion about -- or provision of 53 1 information to justify change the risks or was it simply 2 that it was done for commercial purposes? 3 A. I don't recall having any conversation about this. 4 I mean, I know it says "following our meeting today". 5 I don't recall that meeting taking place. I think 6 that's why -- I don't want to refer to a future email, 7 but I think that's why I then queried exactly what was 8 expected. 9 Q. Had you been provided -- do you recall having been 10 provided with any information to justify the reduction 11 of the risk allowance at this stage? 12 A. Not at that point. 13 Q. If we look at the attachment to this, the email, it's 14 document reference CEC01295329. 15 This is the spreadsheet attached to Mr McGarrity's 16 email. And if we look AFC period 1, at that column, we 17 can see the total brought out of 508 million. Do you 18 see that? 19 A. Yes. 20 Q. And then PCB, the coloured column? 21 A. Yes. 22 Q. Brings out a total there of GBP512 million. Would PCB 23 be project control budget? 24 A. That is what he has referred to in the email when he 25 says we have to reconcile the 508 with the -- 54 1 Q. And then we see delta, which is essentially the 2 difference between the AFC column and the PCB column. 3 Do you see that? 4 A. Yes, yes. 5 Q. So we can see there's a difference that's gone up by 6 GBP4 million. 7 But if we look at the column above that, the deltas 8 of the various components of the total cost, we can see 9 that the total design cost has in fact gone up by 10 a little under GBP2.5 million. The Infraco cost has 11 also gone up by a little under GBP3.5 million. Do you 12 see that? 13 A. Yes. 14 Q. It brings out a total increase there of GBP5.9 million. 15 A. Yes. 16 Q. Now, in order to keep that increase just to 17 GBP4 million, we can see the risk has been reduced by 18 GBP1.9 million? 19 A. Yes. 20 Q. In the table to the right, we can see that that 21 reduction of GBP1.9 million has been split partly to 22 Infraco in the sum of GBP800,000 and partly SDS in the 23 sum of GBP1.1 million. 24 A. Yes. 25 Q. Now, had you been provided, do you recall having been 55 1 provided with any information to justify reductions of 2 that magnitude in the risk at that stage? 3 A. No, I hadn't received any information as to why it would 4 be reduced. I was surprised we were changing it at this 5 stage. 6 Q. Why were you surprised? 7 A. Because the QRA, which was -- if you look at AFC P1, 8 that number there, the 32,347,000, my understanding was, 9 and perhaps wrongly, my understanding was that that was 10 now locked, for want of a better phrase. The contract 11 had been signed or agreed, and this was the risk 12 allowance for the project. So I was surprised when 13 I seen it at this stage, we were now talking about 14 changing it again. 15 Q. You've referred to further emails following that first 16 one, and I would like to look at one of those now. It's 17 got document reference TIE00352326. 18 A. Yes. 19 Q. We can see towards the lower half of the screen, I don't 20 think we need to enlarge it, it's simply the -- 21 A. Yes. 22 Q. The email we have just seen, saying: 23 "Mark will adjust the QRA accordingly." 24 We can see the upper half of the screen, there is a 25 response from you on 20 May, the next day, to 56 1 Stewart McGarrity, saying: 2 "Can we please discuss the attached when you have 3 15 minutes?" 4 If we just look at what the attached is, it's 5 reference TIE00352327. 6 What is this that you have attached to your email? 7 A. That's the QRA model. 8 Q. Just in passing, could I ask you one question about 9 this. In the top left-hand corner, second cell down, we 10 see it's a P80 Risk Allocation Report. 11 We have heard sometimes earlier the risk was being 12 assessed at P90, 90 per cent probability. This was 13 obviously P80. Why was the change made from P90 to P80? 14 A. I can't recall the reason why. I know there was 15 discussion. I don't know who prompted it, whether it 16 was the Council or whether it was tie. I didn't propose 17 it. I know that. 18 Q. Do you know who proposed it? 19 A. I remember being contacted by Stewart and there was an 20 exchange of emails. We had a discussion about it. 21 About reducing it from P90 to P80. 22 Q. Again, the effect of reducing it from P90 to P80 is to 23 reduce the amount of allowance that has to be made for 24 risk in sum. 25 A. That would be the effect if you did that, yes. You 57 1 would have lessened your risk allowance. 2 Q. But you could be less certain that you wouldn't exceed 3 that sum? 4 A. Yes. Obviously the 80 refers to a confidence level in 5 terms of percentage. So you are essentially saying 6 instead of having a 90 per cent confidence level, you 7 reduced it to 80 per cent. 8 Q. Were you happy with that change from P90 to P80? 9 A. I think it was just -- from memory, I think it was just 10 an agreed: this is what we are doing now. 11 Most projects would have a P80 and a P50. That's 12 what you would expect to see in most large capital 13 projects. It's quite unusual to have a P90. 14 Q. Now, the email we have just looked at was you saying 15 that you wanted to discuss this with Stewart McGarrity. 16 This is the attachment to your email saying -- 17 A. Yes. 18 Q. What was it you wanted to discuss with him? 19 A. I'm not sure -- I can't recall what I wanted to discuss 20 about this attachment. I can look at the attachment in 21 a minute, if you give me a moment. 22 I recall having a conversation saying -- raising my 23 concern that we can't be changing the QRA again. We've 24 already -- we've already -- we have agreed all those 25 numbers with the Council. I was concerned that by 58 1 changing it again, it was going to put us back to square 2 1 in terms of having to almost start the whole process 3 again. It wasn't a simple case. You can't reduce this 4 by 1.3 million. That's not how the model works. 5 If you change a number on this and then run it, 6 every number will change. Okay. It's -- 7 Q. Is that because of the means by which a quantified risk 8 analysis is done on the Monte Carlo analysis? 9 A. Yes. So if you can recall the previous sheet, at the 10 risk allowance there was a breakdown where it says 11 Infraco, Tramco, et cetera. If you change one risk in 12 this and run it, all the numbers, they'll also change. 13 They will change marginally because we have not changed 14 the four inputs, but they will still change, and I was 15 saying you can't just reduce a QRA output by 16 US$1.3 million. You have to -- you would have to just 17 hard enter the number. It's not going to be possible to 18 do that without going into the whole QRA again, in which 19 case you are going to get a whole different set of 20 numbers. 21 Q. Were you concerned that once again you were being asked 22 to drop the risk allowance without any justification for 23 that being provided to you? 24 A. Yes. 25 Q. Did you express your concern? 59 1 A. Yes. 2 Q. Did it meet with a response any different from the one 3 you had previously got from Mr McGarrity? 4 A. No, it was that this is what's been agreed. 5 Q. Just do it? 6 A. Yes. 7 Q. Can we look at the next email following on from this, 8 please. It's reference CEC01288043. 9 We can see it's from you to Steven Bell, 10 Stewart McGarrity, Susan Clark and Dennis Murray, and 11 this time it's dated 27 May. So we have gone quite 12 a way past contract close here. 13 A. Yes. 14 Q. What you say in your email is: 15 "All, please see attached spreadsheet which I have 16 updated following our meeting last week. As agreed, 17 Risk ID 343 ..." 18 Which I think was the one we looked at earlier, 19 general delay: 20 "... which allows for delays has been reduced by 21 GBP1.3 million which means we now have GBP5.187 million 22 against this risk and, accordingly, the overall risk 23 allocation has reduced by GBP1.3 million to 24 GBP26.637 million." 25 You have actually expressed it in thousands. I have 60 1 converted that to millions there as I was reading. 2 A. Yes, I understand. 3 Q. "One thing which we all need to be aware of is that it 4 is not possible to reduce the value of one risk in the 5 QRA without affecting all the others." 6 Is that what you have just been describing to me? 7 A. Yes. 8 Q. "This is because the P80 allocation is driven by the 9 total mean sum. Therefore, in order to get round this 10 problem, I have basically 'pockled' the spreadsheet and 11 hard-entered some values. This solves the problem and 12 helps us get the final result past CEC as I doubt they 13 will notice what I have done." 14 What had you done here, when you say hard entered 15 some values? 16 A. Yes. So if you -- the risk 343 was one individual risk, 17 and against it there was a number of 6 million 18 something, okay, and I'd been told to reduce that by 19 1.3 million. So after explaining that you can't reduce 20 a QRA by 1.3 million and by doing it all, that we'd have 21 to just hard enter a number. That was the agreement 22 that was -- that was the instruction I'd received, that 23 we would have to make it -- just reduce that one number 24 by 1.3 million. 25 Q. So instead of having a formula in the cells, you would 61 1 just put a number in the cells, overwrite the formula 2 with a fixed number? 3 A. Yes. 4 Q. That would ensure it would reach the desired total? 5 A. Yes. 6 Q. And that's what you have done? 7 A. Yes. 8 Q. Is that what you mean when you say you pockled the 9 spreadsheet? 10 A. Yes. 11 Q. Reading on, you say: 12 "I will revert to normal practice for future QRAs. 13 However in this instance I think this is the best way to 14 do it in order to avoid unnecessary scrutiny from our 15 'colleagues' at CEC." 16 Why have you put the word 'colleagues' in inverted 17 commas? 18 A. I think it was reflective of the atmosphere and mood at 19 the time between tie and CEC personnel. 20 Q. How would you describe that mood? 21 A. Well, they certainly weren't aligned. So if you 22 think -- if you like, the tie employees obviously wanted 23 to -- it was in their interest for the project to go 24 ahead, and there was a general feeling that some of the 25 CEC employees were -- let's just say they wouldn't have 62 1 been unhappy if the project had been cancelled or it 2 hadn't got across the line. 3 So there was -- the relationship between some of the 4 tie and CEC people at that point wasn't -- wasn't very 5 harmonious. 6 MR LAKE: Thank you very much. 7 Questions by CHAIR OF THE INQUIRY 8 CHAIR OF THE INQUIRY: Could I ask you about this last email 9 that's on the thing. 10 A. Okay. 11 CHAIR OF THE INQUIRY: You use the word 'pockled' which is 12 an English word, but it's derived from the Scots, 13 and I looked at the Scottish National Dictionary for 14 'pauchle', spelt P-A-U-C-H-L-E, and there are many 15 meanings, but in this context it would mean to be guilty 16 of a minor dishonesty, to cheat, to work a wangle, to 17 twist, to manipulate something for dishonest ends, to 18 fiddle or to rig something. Is that what you were 19 doing? 20 A. That's not how I seen it, my Lord. 21 CHAIR OF THE INQUIRY: Well, were you rigging the figures, 22 fiddling the figures? 23 A. Well, no, if -- there's two parts to this, if I may. 24 There's one, should it have been reduced by 1.3 million, 25 and there's two, how we did it. 63 1 The reduction of 1.3 million had been instructed by 2 others that this had to happen. 3 CHAIR OF THE INQUIRY: But you thought that shouldn't have 4 happened? 5 A. I wasn't convinced by the explanation. I wasn't given 6 a satisfactory explanation as to why it should happen. 7 CHAIR OF THE INQUIRY: So you didn't think it should happen 8 without an explanation? 9 A. Yes. I queried, I think this email follows 10 a conversation, and the reason I sent the email was 11 because I wanted it as a matter of record that this is 12 what I'd had to do in order to satisfy the request that 13 had been made or the instruction that had been made. It 14 wasn't a simple case of just going away and changing the 15 QRA. This is how we had to do it. This was the only 16 way to do it. 17 CHAIR OF THE INQUIRY: So you had to fiddle the figures to 18 comply with this instruction? 19 A. Well, the question is if you're fiddling the figure, do 20 you think the figure was -- are we artificially reducing 21 it? I had been told that there wasn't an artificial 22 reduction because the reduction was reflected in the 23 transfer of risk in the contracts that had been placed. 24 So that's all I could -- that was the only answer 25 I could accept. That was the answer I'd been given. 64 1 CHAIR OF THE INQUIRY: Thank you. I don't think there are 2 any other questions. 3 Thank you very much. 4 MR DUNLOP QC: My Lord, I wonder, there's one matter that 5 I was expecting to be raised with this witness that 6 hasn't been. I wonder if my Lord would give me two 7 minutes to speak to Counsel for the Inquiry. I don't 8 know whether your Lordship wants to rise or whether 9 I just go and speak to my learned friend. I'm quite 10 happy either way. I would just like to query one thing 11 as to why it is it's not been raised. If it's not been 12 for an explanation that makes sense to me, then the 13 witness can simply go. But if not, then I may seek 14 leave to speak to the witness for five minutes. 15 CHAIR OF THE INQUIRY: Is this something that you've given 16 notice of? 17 MR DUNLOP QC: It's not, my Lord. It arises from documents 18 that were only uploaded on to Haymarket yesterday. 19 CHAIR OF THE INQUIRY: Yes. I think maybe we will adjourn 20 for five minutes. Will we have coffee? 21 MR LAKE: I don't know -- I have no idea what point my 22 learned friend is going to raise. 23 CHAIR OF THE INQUIRY: It's 11 o'clock. So we can have the 24 break and then we will bring the witness back if 25 necessary after the coffee break. 65 1 MR DUNLOP QC: My Lord, I don't know whether your Lordship 2 wants to provisionally discharge the witness with the 3 usual he may be recalled, or we just bring him back. 4 CHAIR OF THE INQUIRY: We will bring him back. 5 We normally have a break for the shorthand writers 6 anyway about this time. So we will resume at 11.15. 7 (11.00 am) 8 (A short break) 9 (11.19 am) 10 CHAIR OF THE INQUIRY: You're still under oath, Mr Hamill. 11 Further examination by MR LAKE 12 MR LAKE: I would like to ask you about one more email, 13 please. If we could have the document with reference 14 TIE00351419. 15 It we start with the lower half of the screen 16 please. We can see this is an email from you to 17 Stewart McGarrity, Susan Clark and Steven Bell, dated 18 28 February 2008 and the subject matter is QRA; do you 19 see that? 20 A. Yes. Yes, I can see. 21 Q. You say: 22 "Please see attached. I have tried to explain 23 through the various sheets how the risk profile has 24 changed." 25 Then you make a number of points: 66 1 "Let me know if anyone wants to discuss." 2 At the end you have in bold and underlined: 3 "Can I please ask that we don't forward any Excel 4 sheets on to CEC. If we need to give them anything can 5 we please PDF the document or give me a hard copy." 6 Why did you not want them seeing the Excel sheets? 7 A. Because what was happening was I had sent some Excel 8 sheets earlier and -- so obviously that sheet has got 9 a lot of formulas and information which is pulled from 10 other sheets in the background. And what was happening 11 was people were amending the sheet and sending it back 12 or sending it around and people were having -- inputting 13 different numbers and it was messing up the Excel 14 sheets. It was purely just a quality control thing, 15 because I had seen a few scenarios, people were sending 16 information back and the minute you start to overwrite 17 formulas in these, then the whole thing -- and I was 18 having to spend time trying to rectify and explain. So 19 that's why. 20 Q. One thing about using a PDF version of the spreadsheet 21 is that it wouldn't be possible, for example, to spot 22 what you described before the break of changing a 23 formula to a fixed number? 24 A. Yes. 25 Q. Had that happened before? 67 1 A. By CEC? 2 Q. CEC would not be able to spot that you had replaced the 3 formula with a fixed number? 4 A. Sorry, no, that's true as well, yes. 5 Q. But had that been happening before? 6 A. Sending it -- 7 Q. Had you been -- 8 A. Entering the number, do you mean? No. That was the 9 only time. 10 Q. If you look at the email on the upper half of the 11 screen. 12 A. Yes. 13 Q. It's the same day, 28 February 2008. 14 A. Yes. 15 Q. Again, it is from you, this time just to 16 Stewart McGarrity: 17 "Further to our discussion regarding P90 versus P80, 18 the information on tab "QRA output D054" shows a P90 19 figure of GBP34.4 million with the Phase 1A allocation 20 being GBP31 million. The P80 value is GBP31 million and 21 would give a Phase 1A value of GBP28 million." 22 I asked you a little bit before the break about the 23 difference between a P90 and a P80 figure? 24 A. Yes. 25 Q. This illustrates the difference. If you take a P80, it 68 1 drops the figure. 2 A. Yes. 3 Q. You continue: 4 "The P90 figure assumes a higher confidence level 5 (90%) and delivering within the capital costs 6 budget (including risk) ie GBP498 million. 7 Reverting to P80 would require us to convince CEC that 8 being 80% confident was satisfactory; however, 9 I suspect they would be uncomfortable about essentially 10 becoming 10% less confident about delivering to 11 budget. 12 From a starting point, making a case for P80 would 13 be quite easy as most people would accept a confidence 14 level of 80%. Moving from 90% to 15 80% would, in my opinion, be hard to justify. 16 The only justification I can think of would be that we 17 (tie) are so confident that we have secured a fixed 18 price deal that the risk has been minimised to the 19 extent that the higher monetary value associated with 20 the P90 figure is now unnecessary and therefore, as 21 a result of minimising so much risk through the 22 contract, we can reduce the risk allocation figure to 23 the P80 figure." 24 If I just pause there for a moment, you will be 25 aware at this time, at the end of February, that the 69 1 contract was still under negotiation, or were you aware 2 that the contract was still under negotiation? 3 A. Yes. Yes. 4 Q. So at the time of writing this, you wouldn't be in 5 a position to say that tie was so confident that they 6 had secured a fixed price deal that the risk would be 7 minimised? 8 A. I wasn't suggesting -- that wasn't a suggestion. What 9 I was saying was the only way you, Stewart, would be 10 able to go back and convince it is if you could say 11 that. 12 Q. If we then continue, you say: 13 "I fully appreciate the need to reduce costs where 14 possible in order to get the deal done. However, given 15 that we have reduced the figure by a considerable amount 16 so far, I recommend manipulating the current information 17 to an acceptable P90 figure rather than go through the 18 hassle of trying to persuade CEC of the 'benefits' of 19 a P80 figure." 20 Now, I think in fact you have seen from the table we 21 looked at before the break, you did in fact use P80 22 figures thereafter? 23 A. Mm-hm. 24 Q. Nonetheless, what you're suggesting would be the 25 preferred course of action there is that you would 70 1 instead manipulate the current information to an 2 acceptable P90 figure. That sounds like you are not 3 saying we could get an acceptable P90 figure. 4 Nonetheless, the information would in some sense be 5 distorted to get the outcome you desired. 6 A. Yes. I mean, I can see how that looks. What I was 7 actually saying was if you want to change the numbers, 8 I recommend that is what you do. This was 17 days after 9 I had sent the email on 11 February, where I'd raised my 10 concerns and we had had the subsequent discussions. Do 11 you remember, we discussed this earlier. 12 Q. Yes? 13 A. Yes. So this email follows a conversation where I was 14 approached regarding this P90/P80 debate, and what that 15 message was conveying to Stewart was I wasn't offering 16 to do that. I have not said I'll do that. I said: let 17 me know if you want to discuss. 18 What I said to him verbally at the same time as this 19 email was: if you want to manipulate the numbers, you 20 can manipulate them. You have done it already. 21 Q. Did he respond to that? 22 A. To this email? 23 Q. Yes. 24 A. Again, I don't recall receiving an email. I don't want 25 to say no, I didn't receive an email and you pull one 71 1 out, but I don't recall receiving an email. 2 Q. Is it fair to say at this time that the risk allowance 3 is being something that can be adjusted almost at will 4 in order to ensure that you get the right final number? 5 A. That's the point I was making. The point I was trying 6 to make in these emails and conversations was that you 7 can't do that, because it's not going to truly reflect 8 the risk profile at the point of contract award. That 9 was my obvious concern. 10 Q. Did it appear to you that that nonetheless was what was 11 happening at that time? 12 A. But each time I asked why something was being changed, 13 I was given an explanation. Nobody ever said we're 14 changing it to make the number fit. 15 CHAIR OF THE INQUIRY: I think the question was did it 16 appear to you. You have said that you told people about 17 your concerns, but did it appear to you that that's what 18 was being done? 19 A. I'm loath to say it appeared when I don't have any 20 actual evidence. I was anxious that -- I was anxious -- 21 I was anxious that that was being done. That was my 22 concern, that that was happening in the background. 23 Nobody told me they were doing that. I didn't have 24 any evidence as to that what was happening, but the 25 chain of events was leading me to believe that and be 72 1 concerned about it. 2 MR LAKE: In terms of the chain of events, you knew that you 3 were being asked or directed to make changes to the QRA 4 without information being provided to support or justify 5 those changes. 6 A. We have discussed that earlier. Yes, that was 7 happening, yes. 8 Q. So was there anything else that that would be, rather 9 than seeking to manipulate the risk allowance figures in 10 order to reach the final -- the appropriate or desired 11 final outcome figure? 12 A. Unless the people just -- those who were changing the 13 numbers believed it was the right thing to change and 14 just got on with it, they didn't feel the need to 15 explain it to me. You would have to ask the people who 16 were making the changes as to why they were doing that. 17 MR LAKE: My Lord, I think those are the only additional 18 questions I seek to ask in relation to this document. 19 Questions by CHAIR OF THE INQUIRY 20 CHAIR OF THE INQUIRY: Can I just ask one question or one 21 series of questions. 22 I'll be able to check your CV, but do you have 23 a professional qualification? 24 A. I've got a first class honours degree in risk 25 management. 73 1 CHAIR OF THE INQUIRY: In risk management. 2 A. Yes. 3 CHAIR OF THE INQUIRY: Are you a member of any professional 4 organisation? 5 A. I was a member of the Institute of Risk Management. I'm 6 not a member anymore. 7 CHAIR OF THE INQUIRY: As a member or a former member of 8 such a body, do you have professional obligations to act 9 independently of what other people want to do? 10 A. Not that I'm aware of. 11 CHAIR OF THE INQUIRY: Thank you very much. That's all that 12 Mr Hamill, you're still under citation. Technically 13 there's a possibility that you might be recalled. 14 Hopefully that won't be necessary. Thank you very much. 15 (The witness withdrew) 74 1 INDEX 2 PAGE 3 MR MARK HAMILL (sworn) ...............................1 4 5 1 Examination by MR LAKE 6 7 63 Questions by CHAIR OF THE INQUIRY 8 9 66 Further 10 examination by MR LAKE 11 12 73 Questions by CHAIR OF THE INQUIRY 13 14 MR GEOFF GILBERT (affirmed) .........................74 15 16 75 Examination by MR LAKE 17 18 19 20 21 22 23 24 25 224