1 Thursday, 2 November 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 Allan Jackson. 5 MR ALLAN JACKSON (sworn) 6 CHAIR OF THE INQUIRY: You will be asked some questions by 7 Counsel to the Inquiry, Mr Lake. If you just listen to 8 them and answer them as directly as possible. If you 9 lean forward into the microphone so that the other 10 people can pick up your answers, and if you also speak 11 at a measured pace so that the shorthand writers can 12 keep up with you. 13 A. Thank you very much. 14 Examination by MR LAKE 15 MR LAKE: Mr Jackson, could you state your full name, 16 please. 17 A. Allan George Jackson. 18 Q. The Inquiry has details of your address, and I think you 19 were a councillor with the Edinburgh City Council until 20 May of this year? 21 A. May of this year. 22 Q. I would like you to look at a document. It will be 23 shown on screen, but you also have a paper copy in front 24 of you. It's TRI00000106_C. That should be the same 25 document as the paper copy? 1 1 A. Yes, indeed. 2 Q. If you look at the last page in the paper copy, you will 3 see you have your signature on it? 4 A. Yes. 5 Q. Do you have that? 6 A. Yes, indeed. 7 Q. This is the statement or the question and answer 8 statement that you gave for the purposes of this 9 Inquiry? 10 A. Yes. 11 Q. Are you happy that we take that as your evidence for the 12 purposes of this Inquiry? 13 A. Yes. 14 Q. There are a few additional questions I would just like 15 to ask you to go through matters. You say in these 16 questions and answers that you were a member of the 17 tie Board and the TEL Board. If you could look, please, 18 I think it's page 167 of the statement. If we look at 19 paragraph d) towards the top of the page there, you 20 were asked a question about: 21 "To whom did the TPB formally report." 22 You say you were not a member of the TPB when those 23 matters were being decided. We can go to the previous 24 page perhaps and see which matters we're looking at. 25 It doesn't precisely say which matters there. 2 1 I think we were dealing with the matters relating to the 2 tram project as a whole? 3 A. Yes. 4 Q. Are you sure that you weren't a member of the Tram 5 Project Board; is that your recollection? 6 A. As I recall, and I can't remember the exact time, the 7 Tram Project Board itself was completely meant only for 8 the tie officials, and what we would do, we would go 9 along as Board members a bit later and the transport -- 10 tie -- the TPB would report back to us actually what had 11 happened at it. 12 Eventually that was cut back to make it all the 13 same, and tie Board members were amalgamated with the 14 TPB. I can't remember the exact date when they decided 15 to put it all together. 16 Q. Just to help you with these things, could you look at 17 a document with me. It's CEC01015023. These are papers 18 for -- it was the mixture of the Tram Project Board, the 19 tie Board and the TEL Board, the meeting that was taking 20 place on 23 January 2008. We can see that you were 21 included there on the distribution list. 22 If we look at one more document -- you see that 23 there -- 24 A. I have it here, yes. 25 Q. If you look at another document, please, it's reference 3 1 CEC01246826. This time these are the papers for 2 a meeting on 13 February, and it's solely the Tram 3 Project Board. 4 A. Yes. 5 Q. We see you're not included on the distribution for 6 those; is that correct? 7 A. That is correct. 8 Q. Is this the difference, you were there for a joint 9 meeting but not for some of the other meetings? 10 A. Indeed. What happened -- as it has there, the Tram 11 Project Board was really meant for Council officials and 12 tie officials. And when it was over, and the full 13 tie Board arrived, it would be really known to us what 14 had happened at the TPB. 15 Eventually that was done away with. I'm sorry, 16 again, I can't remember when. But it all amalgamated 17 simply into tie Board, became also the Tram Project 18 Board, all amalgamated together to save the senior 19 officials at tie having to go through things twice. 20 Q. If I could ask you to look at another document, please. 21 This is reference CEC01021587. I'm jumping forward in 22 time here. We have now got a pack of papers for 23 a meeting of the Tram Project Board on 3 June 2009. 24 Again, we can see in the middle of the three columns, 25 towards the foot of the page, you're named as one of the 4 1 people, either member or attendee of the Tram Project 2 Board? 3 A. Indeed. 4 Q. If we could complete this, just to go to the fifth page 5 of this, and this is the minutes of meeting of the Tram 6 Project Board meeting that took place on 9 May 2009. 7 Can we see that you are named as someone who was in 8 attendance at the Tram Project Board? 9 A. Correct. 10 Q. Was it the case that you were someone who in fact was in 11 attendance at the Tram Project Board and were therefore 12 aware of the discussions that were taking place? 13 A. Yes. 14 Q. In terms of these -- 15 CHAIR OF THE INQUIRY: Mr Lake, I think for the record you 16 said the meeting was 9 May. It is in fact the 6th. 17 MR LAKE: I apologise. It's clearly the 6th. I read that 18 wrongly. 19 In terms of these three bodies, TEL, and tie and the 20 Tram Project Board, I just want to look a little bit at 21 what the role of each of them was. 22 In terms of responsibility for actually delivering 23 the trams, the construction of the trams, which of the 24 three bodies had the primary role? 25 A. I suppose really it was the Tram Project Board itself. 5 1 The tie Board were in attendance in this particular 2 case, as we can see. As I say, it was amalgamated. I'm 3 not quite sure when. It looks as if the Tram Project 4 Board was what it then became, or perhaps they -- those 5 who were in attendance eventually became part of the 6 Tram Project Board. It was all a bit complicated at the 7 time, but eventually it was all amalgamated. We used to 8 turn up at, let's say, 9.30, and the whole thing was 9 dealt with at once in the one meeting. 10 Q. Was there any clear differentiation or demarcation 11 between which board you were sitting on from time to 12 time? 13 A. Not that I can recall. 14 Q. Did you find it clear which role you were discharging 15 from time to time, which body you were on? 16 A. I didn't give it a great deal of thought at the time. 17 I assumed we were all amalgamated together by this 18 stage, and that was more or less it. Yes. 19 Q. So do you understand what the split of responsibilities 20 was then between TEL on the one hand and tie on the 21 other? 22 A. TEL was originally set up to run the trams when it ever 23 got going, but it seemed to gradually fade away and 24 wasn't mentioned much after a certain amount of time. 25 I'm sorry, I don't remember when that gradually 6 1 happened. 2 Q. In terms of giving advice to the Council about the 3 contracts and whether or not to enter into them, do you 4 know which of these three bodies took the responsibility 5 for that? 6 A. It should have been the tie Board itself. And of 7 course, as you can see there, senior Council officials 8 attended the Board meetings as well. So presumably they 9 reported back to the Council itself, and of course 10 Councillor Gordon MacKenzie, who was a lead member from 11 the ruling group, he would report back I guess as well. 12 Q. Could we go back to your statement, please, and look on 13 page 9. It's okay. I can come back to that another 14 time. Pardon me. 15 Returning to the various bodies, which one of them 16 was the ultimate decision-making body when it came to 17 deciding whether or not to go ahead with the tram 18 project? 19 A. Well, the decision to go ahead was taken by the Council 20 at the time. 21 Q. Mm-hm? 22 A. But of course the Tram Project Board were reporting back 23 to the Council at that stage with advice on what they 24 thought was the best way forward. And the Council was 25 in full Council meeting, would take the actual final 7 1 decision. 2 Q. The responsibility for reporting to the Council was that 3 of the Tram Project Board? 4 A. Yes. 5 Q. In terms of information you obtained in your capacity as 6 Director of -- in these various bodies or attending the 7 Tram Project Board, to what extent were you able to 8 share that with councillors, other councillors 9 generally? 10 A. Well, as I say, the other councillors, the other parties 11 were represented and presumably they reported back to 12 their own members. As I said, senior Council officials 13 were present and would have reported back to the Council 14 itself, to the Chief Executive and the various other 15 senior Council officials. 16 Q. When you say other parties reported back to their own 17 members -- 18 A. I assumed they did. 19 Q. Did that mean people of their own political grouping? 20 A. Yes, I guess that would be. They were all represented 21 apart from the SNP and the Greens. 22 Q. Is that what you were doing? You were able to report 23 back to members of your own group? 24 A. I was able to report back to senior members of our 25 group. Some things we were told at a Transport Board 8 1 were in confidence. I don't remember which now. So you 2 had to be careful with what you took back. 3 Q. If there was information there that you couldn't take 4 back, can you remember what sort of information that 5 was? 6 A. That I couldn't take back? 7 Q. Yes, the stuff that you couldn't pass on? 8 A. It would be -- I think they were concerned about perhaps 9 commercial confidentiality, would this leak out and such 10 like. I think that's something that dogged the tram 11 project for quite a while. You had to be selective in 12 what you went back with. I didn't sit in full group 13 meetings and tell them everything which had happened. 14 What I did from time to time was ask perhaps 15 Richard Jeffrey or officials to come along in the 16 meeting and speak to the Board members, and he could 17 tell them what he wished to tell them, other Council 18 groups. Sorry, our political group. 19 Q. If that created a situation where you had knowledge that 20 the other members of your group and other councillors 21 generally didn't have, did that cause difficulties? 22 A. I don't think it did, to be perfectly honest. Anything 23 which was cogent, I did take back. 24 Q. You said anything that was cogent you took back? 25 A. Anything which I considered to be important, very 9 1 relevant to what was going on, I would take back to my 2 political group. 3 Q. But what if the things that were important were the 4 things that related to items of commercial 5 confidentiality and you had been told that you shouldn't 6 take them back, what happened then? 7 A. Anything I couldn't take back would have come up in 8 Council meetings. The Full Council which is held in 9 public as we will be aware, at that stage, that's when 10 Council officials reported back in a full document to 11 Council, and councillors in full Council meetings can 12 discuss and decide where to go from there. So that 13 would be -- they would be the items which were 14 completely open for the public. 15 Q. Did situations arise where decision -- matters came up 16 for decision in the Council or its committees, and you 17 felt you had knowledge which you couldn't tell the 18 others which was relevant to the decisions being made? 19 A. Nothing that -- nothing that I can recall now. 20 Q. Did you feel any discomfort at the time about this 21 situation that you might know more than other people? 22 A. It was perhaps slightly discomforting, but overall 23 I didn't think it was a major problem. 24 CHAIR OF THE INQUIRY: Can I just clarify, you said that 25 anything that you couldn't take back would have come up 10 1 in the Full Council meeting. Is that right? 2 A. No, I'm sorry, your Honour. I didn't mean that. 3 Anything which I -- anything which could be taken back 4 would have come up at Full Council meetings, reported by 5 the officials in Council papers. 6 CHAIR OF THE INQUIRY: I think you were being asked then 7 about things that you couldn't take back. 8 A. Couldn't take back. Yes. Anything which apparently 9 I couldn't take back was for me. I could take it back 10 perhaps to the senior members of my own group, perhaps. 11 The group leader. But there weren't a large number of 12 items that I recall in that category. 13 MR LAKE: I'm just a bit puzzled by that answer. You 14 say: anything which you couldn't take back, I could take 15 back to the senior members of my own group. Does 16 that -- 17 A. I may well have discussed it with the group leader, 18 complete trust. 19 Q. Right. So there was a difficulty then that you were 20 required to speak to people within your own group on 21 matters which, as far as the companies were concerned, 22 they wanted to keep confidential? 23 A. There would have been items, yes. 24 Q. Why was it that you felt it necessary to raise certain 25 items with your group leader? 11 1 A. I think it was ongoing. I think the group leader was 2 entitled to know what was going on. I'm quite sure that 3 the other political parties would go back to their 4 groups and decide for themselves what to -- what they 5 would do. But no, I considered that fair enough, to go 6 back to my own group leader and discuss these things 7 confidentially. 8 Q. What you are saying there is it was -- I think you said 9 fair enough that -- "I think the group leader was 10 entitled to know what was going on". 11 A. I considered that I should share these things with him. 12 Complete trust in the group leader to discuss these 13 things in confidence. 14 But from memory, I don't recall any -- a large 15 number of these matters. 16 Q. So there does seem to be a tension then which on the one 17 hand, the companies and the boards are saying they want 18 matters kept confidential, but you felt it was 19 appropriate that at least the group leader know about 20 them? 21 A. Yes. 22 Q. What about the other members? You were then in a 23 situation where you and the group leader and anyone else 24 on the companies would know of a certain matter and the 25 councillors generally wouldn't. Did you expect the 12 1 other councillors simply to follow the lead given by the 2 group leader and yourself? 3 A. They would be following from the Council papers which 4 came forward from meetings. As I think I mentioned, 5 I would from time to time ask along, I think, 6 Richard Jeffrey at the time to speak to perhaps 7 a meeting over the group, and he could relay on to them 8 the matter which he thought could be discussed openly. 9 Q. But what if you thought that there were other matters 10 which should be discussed and should be passed on to 11 your group leader that Richard Jeffrey thought 12 shouldn't? 13 A. I don't recall matters like that. I don't recall 14 a great number of items which were given to us which 15 I couldn't take back. 16 Q. Could I ask about something in concrete. I'll return to 17 the adjudications and the adjudication decision later, 18 but there's been a suggestion in evidence so far that 19 the outcomes of the adjudication decisions were not 20 being reported to councillors generally. But you would 21 have known about them from sitting on the company 22 boards; is that correct? 23 A. Yes, that's correct. Yes. 24 Q. Were you aware where there was any interest within your 25 group of knowing what these decisions were and how 13 1 they'd been reached? 2 A. I don't recall. I think that they would be going along 3 with Council reports. The public ones which went to 4 Council meetings. 5 Q. So did you have any discussion with anyone in your 6 group, including the group leader, about these -- the 7 outcome of these decisions? 8 A. Not as I can recall. 9 Q. You can't remember any requests for information about 10 that? 11 A. No. 12 Q. Turning back to the councillors on the various boards 13 more generally, why did you -- firstly, did you think it 14 was appropriate that councillors sit on the boards of 15 these companies and entities? 16 A. It has been normal over a very long period of time if 17 any of these boards are set up, then the Council would 18 put some members on to them. In retrospect, and I think 19 now, they don't do it. I think they have decided in the 20 Council, not that I'm there now, I think they have 21 decided to stop doing that, and simply to have perhaps 22 outside industry experts put on them as board members. 23 At the time it was a normal thing to do, up until 24 comparatively recently, I think, that councillors would 25 go on to these boards. 14 1 Q. Did you think while councillors were on the boards in 2 the period where you were there, that it caused 3 difficulties for the councillor in the sense of having 4 a conflict between the Board's interests on the one hand 5 and possibly the Council's on another? 6 A. I don't really think so in retrospect. I don't really 7 think it was a major problem there. The ones we 8 discussed there briefly before, I suppose, items which 9 were considered confidential would only be given to 10 Board members. But I think that was the way it should 11 be. Probably that's why the Council has decided now not 12 to do that. Over many years I have been appointed to 13 various things. None quite as important as the tram 14 project. But it was the norm, and I didn't feel any 15 conflict of interest over all these years. 16 Q. You have explained how, when you were faced with the 17 desire for confidentiality on the one hand and the 18 consideration that the councillors or your group leader 19 at least should know, you favoured informing the 20 Council. Do you know what other people did when faced 21 with that conflict? 22 A. No, I don't know what others did. 23 Q. Did you ever encounter a conflict where one of the 24 companies or a board wanted to do something and you 25 thought it might not be in the Council's best interests 15 1 for them to do it? 2 A. No. 3 Q. What advantages do you think, or do you think any 4 advantages come from having councillors on the Board? 5 A. In retrospect, I don't think it was a particular 6 advantage. It just seemed to be the norm, and 7 councillors were quite keen to go on these things from 8 time to time. 9 I don't think there was a great advantage for the 10 Council now. 11 Q. I want to turn now to the movement up to the awards of 12 the contract in 2007. You had been obviously with tie 13 and TEL throughout a large part of 2007 and had seen 14 events unfolding. 15 A. Mm-hm. 16 Q. In terms of the strategy for the procurement of the 17 infrastructure contracts for the tram, what was your 18 understanding of how far advanced the design should be 19 by the time the contracts were awarded? 20 A. It was -- well, it was hoped very much the design would 21 be ready. Apparently now in retrospect, it looks as if 22 it wasn't. 23 Q. Why was it hoped that the design would be ready? 24 A. Well, it was a large contract. So perhaps you wouldn't 25 have expected the entire thing to be ready. But it was 16 1 assumed that the bulk of it would be ready, for the 2 contracts to go ahead, because it wouldn't -- the 3 contract wouldn't have happened in the entire length of 4 the proposed route. 5 So it was always thought it would perhaps start at 6 the airport end and work its way forward towards 7 Newhaven. So the design down to Newhaven, for example, 8 didn't seem quite so important at that time. 9 Q. Was that your understanding or was that your view of 10 what the Board view was at the time? 11 A. That was my understanding. I don't recall now whether 12 it was the entire Board went along with that. That was 13 what I was -- my view was at the time. 14 Q. What about the position in relation to the utility 15 works? How were they to be -- what stage were they to 16 be at when the contracts for infrastructure were let? 17 A. It was very much hoped that they would be quite far 18 progressed. As it turned out, of course, that wasn't 19 the case, but nobody thought the entire thing would have 20 been done by the time the works started on-street. As 21 again, they would have worked gradually towards 22 Newhaven. 23 Q. Starting at the airport end -- 24 A. Starting at the airport end, yes. 25 Q. Were you aware of how the design was progressing during 17 1 2007? 2 A. As far as I was aware, it was going as we would have 3 expected it to be. In retrospect, it probably wasn't. 4 Q. What about the utility works, the MUDFA works? How were 5 they getting on in 2007? 6 A. Slowly. But we were of the view it was going forward. 7 Everybody knew it was going to be a bit of a problem, one 8 of the more difficult things, but I don't think anyone 9 expected it to be very far on because there weren't so 10 many required at the airport end. It was once it was on 11 street where the problems with utilities started. 12 Q. Once you got to the stage of contract close, was there 13 either within tie, TEL or the Tram Project Board, do you 14 recall any discussion about whether or not the utilities 15 works and the design were sufficiently far advanced to 16 proceed to award the contract? 17 A. I don't recall any particular discussion. It may well 18 have been, but it's a long time ago now. I'm afraid 19 I can't remember the detail of that. 20 Q. Do you recall any consideration of whether or not the 21 design in particular was sufficiently far advanced? To 22 make it appropriate to move forward? 23 A. No. 24 Q. Do you recall any discussion taking place about whether 25 or not to award the contract at that time would be 18 1 a departure from the procurement strategy? 2 A. No. 3 Q. Did you get any advice from lawyers or the technical 4 engineering experts at that time, December, about 5 whether or not it would now be prudent or appropriate to 6 move forward with the contract? 7 A. Not as I can recall. 8 Q. In particular, did you get any advice from the legal 9 advisers that you should stop the procurement process 10 and pause for a while to allow other things to be put 11 into place or be advanced? 12 A. I'm fairly sure I can say no to that one. 13 Q. Were you given any legal advice at that time regarding 14 the set-up of the contracts? 15 A. No. 16 Q. What did you understand was to happen to the -- what was 17 termed the design risk in concluding the contract? Who 18 was to bear the risk of any development of design? 19 A. Eventually I suppose if you work your way up it was tie. 20 And presumably that was passed on to the Council. It 21 wasn't something which was gone into great detail, that 22 I can recall. 23 Q. Once the decision had been taken in December 2007 that 24 the contract should be awarded, what further involvement 25 did you as a councillor have in any of the boards or of 19 1 the Council in making a further decision as to whether 2 or not the contract should proceed? 3 A. I think the decision was taken, and that was that. 4 I don't recall any discussion at any stage and with 5 anybody as to the fact that it may -- the possibility of 6 it being cancelled or postponed. 7 Q. Once again, just looking forward from December 2007 to 8 May 2008, were you aware of any consideration about 9 whether or not there should be a pause before the 10 contract was actually signed? 11 A. Not as I can recall, no. 12 Q. Or any legal advice that it would not be safe to sign 13 the contract at that time? 14 A. No, I don't recall having any legal advice on that. 15 Q. Could I ask, please, to look at some documents that will 16 be shown on the screen. If you firstly look at 17 CEC01515189. We can see that this is a draft resolution 18 headed "TRAM PROJECT BOARD". It's a resolution of the 19 members of the Tram Project Board at a meeting on 20 23 January 2008, held jointly with the Boards of tie Ltd 21 and Transport Edinburgh Limited. 22 We can see it considers various things, and then in 23 paragraph 4, approves delegated authority arrangements. 24 Do you recognise this, just from looking at it? 25 A. It's a case of re-reading it. It was quite a while ago, 20 1 ten years ago. So I don't necessarily recognise it at 2 that time. But I'll have seen it before. 3 Q. If you look at paragraph 4, it's perhaps easier to look 4 at the whole thing. If you go back towards the start, 5 paragraph 1. It approves the terms of the Infraco 6 Contract Suite and all related agreements and documents: 7 "... as such documents were defined in the Board papers, 8 as a basis for commitment to the contractual agreements, 9 noting the main open areas and in the context of the 10 delegated authority to conclude the above agreements 11 approved under Resolution 2 below." 12 2 is: 13 "to recommend to the Board of Transport Edinburgh 14 Limited that the Board approve the terms of Infraco 15 Contract Suite and all related agreements ..." 16 3: 17 "to approve the terms of the Governance and 18 Delegations paper ..." 19 Again jumping forward to 4: 20 "to approve the proposed delegated authority 21 arrangements to be adopted in order to ensure an 22 efficient and properly controlled process ..." 23 Just before I go on to look at the delegated 24 authority arrangements, does that ring any bells with 25 you just now? 21 1 A. It's to the best of my memory, that's -- that's the way 2 it was. I accepted that at the time. 3 Q. Because it goes on to say the delegated authority is 4 this: 5 "The delegated authority arrangements proposed and 6 approved were: A Committee of the Boards of the Company, 7 the Tram Project Board and tie Limited, would be immediately 8 formed comprising Messrs Gallagher, Mackay and Renilson, 9 to whom authority is delegated to approve final 10 execution by the tie Chairman of Notification to Award, 11 the Infraco Contract Suite and any necessary related 12 agreements on condition that: 1. The final terms of the 13 contractual arrangements are within the terms of the 14 Final Business Case, subject to slippage of up to one 15 month in programmed revenue service in 2011; and 2. They 16 unanimously conclude that it is appropriate to do so; 17 and 3. Approval has been received from the CEC 18 Chief Executive to proceed to execution of the Infraco 19 Contract Suite." 20 Do you recall doing that, this sort of motion being 21 passed at the end of January 2008? 22 A. Yes. I mean, seeing it now, yes, I remember that is -- 23 that was what was accepted, yes. 24 Q. So this was the -- in this particular instance we have 25 looked at, the Tram Project Board passing over to this 22 1 sub-committee of the three named individuals' authority 2 thereafter to decide whether or not to enter into the 3 contract? 4 A. Mm-hm. Yes. 5 Q. If we look then at another document, CEC01515190, we can 6 see this time it's headed "TIE LIMITED". But it's got the 7 same wording, "RESOLUTION OF THE BOARD OF DIRECTORS OF 8 tie Limited", and the same date of 23 January, this time 9 held jointly with the Tram Project Board and the Board 10 of Transport Edinburgh Limited. 11 You see, if you look at that, it's broadly in the 12 same terms as the document we've just looked at? 13 A. Yes. 14 Q. Do you recall that being done within tie as well? 15 A. Yes. 16 Q. Just for completeness then, could we also look at 17 CEC01515192. This time to complete the three companies, 18 this is Transport Edinburgh Limited, a resolution of 19 them on the same date, and again, from looking at it, 20 it's broadly in the same terms as the previous one. 21 Were you aware that demands for additional money had 22 been made by the contractor consortium on the lead-up to 23 the award of the contract? 24 A. No, I don't recall being aware of that. 25 Q. Did you get any advice on the effect of the contract and 23 1 how it was anticipated it would operate? 2 A. No, not as I recall. 3 Q. Did you get any advice as to risks for the Council and 4 the contract, that they would be liable for additional 5 sums caused by changes in the contract? 6 A. No, I don't recall being given advice on that at all. 7 Q. Were you given any advice that there were Pricing 8 Assumptions in the contract which might not hold true, 9 with the result that there would be liabilities 10 generated for the Council? 11 A. No. 12 Q. Could we look at another document, please. It's 13 CEC01338847. We can see here a document. It's headed 14 "EDINBURGH TRAM PROJECT FINANCIAL CLOSE PROCESS AND 15 RECORD OF RECENT EVENTS". 16 Do you recall having seen this document before? 17 A. I can't recall now, but I'm fairly sure that I would 18 have, yes. 19 Q. You would have seen it. 20 Do you know in what context you saw that? 21 A. I don't recall if it was presented to a Board meeting. 22 Presumably it was. I don't know if the Inquiry knows 23 where this came from. Where it was presented. 24 Q. The Inquiry -- what I'm really trying to find out, 25 whether it was something that was presented to you and 24 1 whether or not you considered or placed any reliance on 2 it? 3 A. I don't recall seeing it. I don't recall now having 4 seen it. 5 Q. If I could ask you to look at another one, just to see 6 if that jogs your memory. It's CEC01338851. 7 This is titled "REPORT ON INFRACO CONTRACT SUITE". 8 Do you see that? 9 A. I see it, yes. 10 Q. Again, does it immediately ring any bells with you? 11 A. No. 12 Q. If I can just refer you to one particular paragraph to 13 ask whether it's something that rings any bells, could 14 we look at the second last paragraph on the page: 15 "In broad terms, the principal pillars of the ETN 16 contract suite in terms of scope and risk transfer have 17 not changed materially since the approval of the Final 18 Business Case in October 2007. The process of 19 negotiation and quality control has operated effectively 20 to ensure the final contract terms are robust and that 21 where risk allocation has altered this has been 22 adequately reflected in suitable commercial 23 compromises." 24 Does that ring any bells with you? 25 A. Not particularly at this time. If that was presented to 25 1 a Council meeting or to the tie Board, then I will 2 certainly have seen it before. If not, then I have not 3 seen it before. 4 Q. But is it something which is triggering any recollection 5 in you at all? 6 A. Not at this time, no. 7 Q. Just for completion then, if I could ask you also -- for 8 completeness, could I ask you to look at CEC01338853. 9 You can see this document is headed "EDINBURGH TRAM 10 PROJECT REPORT ON TERMS OF FINANCIAL CLOSE ('CLOSE 11 REPORT')". 12 It's the same question. Do you recall this at all? 13 A. Again, if it had been presented to the Tram Project 14 Board, if it had been presented to the Full Council, 15 I would have seen it before, but from looking at it, 16 I don't recall seeing it in any other context, no. 17 Q. We are finished with that document then. 18 Once the contracts were awarded in May 2008, I think 19 you continued to be on the boards of the various 20 companies and the Tram Project Board we have talked 21 about; is that correct? 22 A. Yes. 23 Q. Were you responsible for -- put it this way -- keeping 24 an eye on the works as they unfolded? 25 A. Yes, we would listen to -- sorry -- yes, we would -- we 26 1 would be advised, we would be discussed -- the senior 2 officials in tie would run through what was going on, 3 bring everybody up to speed. Everything would have been 4 discussed. So yes, we were aware of what was going on, 5 as -- should I say, everything that we were told by -- 6 that's something we knew about. There may have been 7 things that we didn't know about. I don't know. 8 I couldn't reply. I couldn't speak for the officials. 9 Q. You said: everything we were told by. Presumably you 10 mean everything you were told by people within the 11 companies? 12 A. Yes, when we were at Board meetings, as I suppose 13 virtually any board would be, then the officials working 14 full-time on it would bring forward, update the boards 15 on what was happening as they saw it at the time. 16 Q. Did the works unfold smoothly? 17 A. At first, I would say they unfolded smoothly, and then 18 it gradually became more difficult as time went on. 19 Q. When did things start to become difficult in your view? 20 A. I think it happened quite gradually. I think with 21 retrospect now it was regrettable that -- 22 Q. Could I ask you to speak quite slowly. 23 A. Yes, sorry. I think now, looking back, it's regrettable 24 that, for example, Transport Scotland withdrew, perhaps 25 it was becoming more obvious that the contractors got 27 1 themselves to be in a position to demand more and that 2 happened gradually. 3 However, the tie officials always defended the 4 contract as they saw it, and it was the general view 5 taken by Board members that tie was going properly and 6 that perhaps the difficulties were being caused by the 7 contractors at the time. Particularly the civil 8 engineering contractor. 9 Q. You say that the officials defended the contract as they 10 saw it, and that was the general view of Board members. 11 When did that -- the way you say that, did that change? 12 A. I don't think that it really did. Council officials and 13 tie officials had always assured councillors, and indeed 14 the Board members, that it was a good contract for the 15 Council. I think we now know that that wasn't the case. 16 And there were too many opportunities for the 17 contractors to come in and demand extra, demand more 18 money, suchlike. 19 Q. We will go on to the contract in a bit more -- but if we 20 can just step back a moment to look at what you said, 21 you were unhappy about the withdrawal of 22 Transport Scotland. Why did you think that was not 23 a good thing? 24 A. I think really the Council was a comparatively small 25 body in the overall scheme of things. 28 1 Transport Scotland, being a Scottish Government 2 organisation, would perhaps have had a bit more clout if 3 they had stayed on. I think that was perhaps -- 4 Q. I think we have lost your microphone for a second there. 5 Could you start again? 6 A. Yes. Is that okay? 7 Yes, I think that the Council was a comparatively 8 small body in the overall scheme of things. 9 Transport Scotland being a national government agency, 10 perhaps would have had more clout. So that quite 11 quickly, I think, led us to believe that we were trying 12 to run this as a city, tie itself, and that overall 13 control -- maybe not control, but supervision of the 14 contract and of the scheme diminished a bit when tie -- 15 when Transport Scotland left. 16 Q. You describe it as clout there, that Transport Scotland 17 had more clout. 18 A. Okay. Trying to think of a more diplomatic word than 19 clout. 20 I think Transport Scotland would have more 21 influence, more presence, more authority, as far as the 22 contractors were concerned. So I suppose clout may well 23 be the wrong word. 24 Q. You say also you think the supervision diminished, the 25 supervision of the scheme diminished once 29 1 Transport Scotland ... what did you think 2 Transport Scotland were doing that wasn't done or wasn't 3 done so effectively by the Council? 4 A. I hasn't been deeply involved in what Transport Scotland 5 were doing up to that stage, but it became fairly 6 obvious that them pulling right back, that grip, if you 7 like, they being the ultimate funders, was perhaps 8 reduced. And I think that was probably a problem at the 9 time, and probably is a problem because we could go back 10 to now. 11 Q. Going back to the contract and its implementation, 12 I would like you to look at a document with me. It's 13 reference CEC01210242. These are the papers for the 14 Tram Project Board of 22 October 2008. We can see that 15 you're included as someone to whom they would have been 16 sent? 17 A. Correct. 18 Q. Could we look, please, at page 10. If we look at the 19 lower part of the screen, we see it says there: 20 "Progress - Infraco (including Tramco). 21 Summary against the agreed Infraco contract 22 milestones is shown in the table below (number of 23 milestones)." 24 We can see if we look at the second line in the 25 table for construction, towards the right-hand side, 30 1 under cumulative for the contract, it would be planned 2 that there would be 85 milestones achieved. In fact 3 none had been achieved, 0 per cent. 4 Was this a cause of concern for you, that 0 per cent 5 of what was planned had been achieved by this time in 6 October? 7 A. Yes, there was a general concern about that. This is 8 when the -- particularly the Bilfinger Berger, I would 9 say, were having problems or tie was having problems 10 with them, and a bit of confrontation, I think, in 11 retrospect was now taking place. 12 I think that Bilfinger civil engineering company 13 were very well aware and their legal officials were 14 probably aware of the contract, and as we now know, it 15 favoured them rather than the Council. 16 So that was a bit of a -- that was a concern at the 17 time. 18 Q. But in terms of the lack of progress and the apparent 19 inability to make progress, what was the view of that? 20 What should be done about it? 21 A. It was discussed. It would have been discussed verbally 22 at board meetings. The best of my recollection, the 23 senior officials perhaps, Richard Jeffrey, I think he 24 was there by that time, was -- and indeed the chairman, 25 were very concerned. They were going back to Bilfinger 31 1 and discussing this; how can we get this going. 2 The Board were being told that it should be ongoing 3 now. Things should be up and running. There were 4 various things presented to us to tell us why it wasn't 5 going. None of it appeared to be the problem with tie 6 itself. And I think perhaps some members were quizzing 7 on that. I don't recall doing so myself. 8 But it continually came back that the contractors 9 were being awkward. 10 Q. Were you aware what the -- at that stage whether there 11 is any fundamental differences of agreement about the 12 contract between the parties? 13 A. What we were being told at the time was that the civil 14 engineering contractors were -- perhaps aggressive was 15 the wrong word. Firm, forward looking, as far as they 16 were concerned, group. They had -- they managed 17 contracts all over the world. Some people would say 18 they were a tough company to deal with. They wanted to 19 get their -- the best they could out of the contract, 20 and that was certainly discussed. That became a problem 21 as time went on, and as I was referring to earlier 22 perhaps, Transport Scotland would have had a bit more 23 clout, using the word again, with them than 24 a comparatively small outfit like Edinburgh and its 25 board, tie Board. 32 1 Q. Now, I think you were aware that a dispute arose in 2 relation to Princes Street, the works on Princes Street, 3 early in 2009. 4 A. Mm-hm. 5 Q. By that time you were participating in the Tram Project 6 Board; do you recall that? 7 A. That's when they were amalgamated as I recall. TPB 8 was -- just simply became part of the full Board. 9 Q. Perhaps just for recollection's sake, if you go to 10 a document, CEC00988034. 11 This is perhaps slightly tricky because the papers 12 are marked as being for a meeting on 11 February 2008. 13 We can at least see that your name was included amongst 14 the people to whom they were circulated? 15 A. Correct. 16 Q. But if we look at page 5 of this, we can see it contains 17 the minutes for the Tram Project Board meeting on 18 22 January 2009, rather than 2008. So it appears that 19 what's on the front page of it is someone mistyping the 20 date? 21 A. Yes. 22 Q. Because if we do look at these minutes, we can see 23 item 1.2 referring to what was discussed at the last 24 minute. It was the extra cost to Princes Street, and 25 the paper required to address specific or additional 33 1 cost items within the paper to what is being proposed. 2 Princes Street was something that was happening 3 early in 2009. 4 A. Mm-hm. 5 Q. Do you understand what was at the root of the dispute 6 that arose in relation to Princes Street? 7 A. Not in great detail. As far as I can recall, the -- 8 there were much more -- many more problems on 9 Princes Street than had been previously expected and 10 that was causing quite a problem. I think it was simply 11 a push on from what was happening elsewhere, that it 12 became more obvious, more problems, I think, on 13 Princes Street, than there had been on other parts of 14 the route. 15 Q. What do you mean, a push on? 16 A. I think Princes Street highlighted many more problems 17 than perhaps happened in other parts of the route. They 18 discovered the various things under -- under the road 19 surface. There were more -- more problems than had been 20 anticipated. I think that became probably a major 21 problem. 22 Q. When the dispute arose, were you aware whether or not 23 any works had been carried out on Princes Street at that 24 time? 25 A. I wasn't aware of anything. 34 1 Q. Now, the Princes Street difficulties were discussed at 2 the Tram Project Board, I take it? 3 A. They would have been. 4 Q. Do you recall being given advice in relation to the 5 contract and the problem? 6 A. I don't recall it now, but presumably there must have 7 been. I'm sorry, my memory doesn't help because I have 8 no recorded minutes, I find it difficult. 9 Q. Do you know what was done in relation to the 10 Princes Street dispute and how it was resolved? 11 A. I think the -- the discussions continued between the 12 various bodies. There were various ideas on what should 13 be done. What could be done. And it ended up that what 14 was done in the first instance wasn't good enough, had 15 to be redone. 16 I don't remember all the detail now. 17 Q. When you're talking about what was done and had to be 18 redone, those are the actual works themselves that 19 required remedial works? 20 A. Yes. 21 Q. But in terms of what had to be sorted out between the 22 parties to get the works started, do you know what 23 was -- how that was achieved? 24 A. I'm sorry, I don't recall that now. 25 Q. Do you recall there being an issue that arose, perhaps 35 1 later on or was crystallised later on, about differences 2 between what was termed the Base Date Design Information 3 and the issued for construction information? Do you 4 recall the dispute about that? 5 A. Sorry, I don't know. 6 Q. Do you recall meetings taking place once Richard Jeffrey 7 joined tie to try and decide what strategy should be 8 pursued in relation to the contractor to get them to 9 start work or work? 10 A. I don't recall particular -- the details of any 11 discussion. In retrospect, I think perhaps Mr Jeffrey 12 may have taken a slightly different tack. I think it 13 was assumed that he would continue in the same manner. 14 There were -- probably aware of being a discussion about 15 that at the time. 16 Q. Do you recall the discussion? 17 A. I don't recall the content of any discussion. 18 Q. Do you recall in any detail the decisions that were 19 made? 20 A. No. 21 Q. Or advice that was given in relation to those decisions? 22 A. No. 23 Q. Do you recall whether there were any discussions in tie 24 or the Tram Project Board or TEL for that matter as to 25 what advice should be given to the Council as to the 36 1 likely costs, outcome costs of the project? 2 A. No, I don't recall that being discussed. No. 3 Q. Okay. Do you recall any discussions within any of these 4 entities, the Tram Project Board, tie, TEL, as to the 5 outcomes of the various dispute resolution procedures 6 that were pursued? 7 A. They were reported to the tie Board. I think it's 8 perhaps in some of the papers. They were being reported 9 that -- let's say, a purely hypothetical example, the 10 contractor had come forward asking for GBP2 million 11 extra. This isn't a particular case. It's 12 hypothetical. It went to dispute resolution. And tie 13 were considering they had won it, if it came back, let's 14 say, 500,000 for tie and the rest had been dismissed. 15 That was probably the way it was being done. So 16 a complete victory, if that's the right correct way to 17 put it, over tie, that was fantastic if it happened. 18 But if the adjudicator came back and said, no, the 19 tie Board, tie itself, are responsible for perhaps only 20 25 per cent of this claim, that was claimed as to be 21 a victory, if that's the right way to put it, and they 22 were considering that had gone in tie's favour, rather 23 than a complete no, the contractor is wrong. 24 Q. Who was presenting that to you? 25 A. That would come from the officials at the time. tie 37 1 officials. 2 Q. If they said to you that they were telling you that you 3 had perhaps managed to make a saving on the costs, but 4 in fact they had been unsuccessful on the point of 5 principle, does that ring any bells? 6 A. Perhaps not the principle. I think if the contractor 7 came back and said: we've had to do this much extra work 8 and they consider under the contract they didn't have to 9 do that, that's -- it may have been a point of 10 principle, but I think it was strictly speaking, they 11 were being hard-headed with the contract. 12 Q. Are you aware of any issues of principle about whether 13 or not certain things would amount to what was termed 14 a Notified Departure? 15 A. No. 16 Q. You don't recall that. 17 You don't recall any discussion with you about how 18 the decisions on that issue had turned out? 19 A. No, they were simply reported to us, and there would 20 have been verbal discussion, I'm sure, at the time. 21 Q. My Lord, I think those are the all the questions I have 22 for Mr Jackson. 23 CHAIR OF THE INQUIRY: Yes. I don't think there are any 24 other questions. 25 So thank you very much, Mr Jackson. 38 1 A. Okay. 2 CHAIR OF THE INQUIRY: You're free to go. You're still 3 subject to your citation, in case we wanted to recall 4 you. It's highly unlikely, but there is that 5 possibility. If that arose, you would be contacted by 6 a member of the Inquiry team. 7 Thank you very much for your evidence. 8 A. Thank you, your Honour. 9 MR LAKE: My Lord, I'm sorry to say that the next witness 10 that I have planned to come in today is Mr Wheeler, but 11 in terms of timetabling, I'm afraid he's not here at the 12 moment and I'm afraid won't be here until about 13 11 o'clock. 14 So I'm sorry to cause an interruption to the 15 proceedings, but I would suggest we take the morning 16 break early and perhaps slightly longer than would 17 normally be the case. 18 CHAIR OF THE INQUIRY: We can adjourn until 11 o'clock. If 19 Mr Wheeler isn't here then, we can have a longer 20 adjournment. 21 But in the meantime, we'll adjourn until 11 o'clock. 22 A. Thank you, your Honour. 23 (The witness withdrew) 24 (10.23 am) 25 (A short break) 39 1 INDEX 2 PAGE 3 MR ALLAN JACKSON (sworn) .............................1 4 5 Examination by MR LAKE ........................1 6 7 MR PHIL WHEELER (sworn) .............................40 8 9 Examination by MR LAKE .......................40 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 89