1 Thursday, 16 November 2017 4 MR MACKENZIE: My Lord, the next witness is James Donaldson. 5 MR JAMES DONALDSON (sworn) 6 CHAIR OF THE INQUIRY: Mr Donaldson, you're going to be 7 asked questions, at least initially, by Counsel to the 8 Inquiry, Mr Mackenzie. If you just listen to the 9 question and answer it as directly as possible, and if 10 you keep your voice up, speaking into the microphone, so 11 the public can hear, and also if you speak in a measured 12 pace, so that the shorthand writers can keep up with 13 you. 14 A. Okay. I'll try my best. 15 Examination by MR MACKENZIE 16 MR MACKENZIE: Good afternoon. 17 A. Good afternoon. 18 Q. Can you state your full name, please? 19 A. James Johnston Donaldson. 20 Q. And your current occupation? 21 A. Construction Director. 22 Q. I would like to go a CV, please, you have provided to 23 the Inquiry. It's CVS00000020. It should come up on 24 the screen. If we can start, please, at page 2 under 25 qualifications, we'll see at the top, the very top, we 97 1 see you have -- 2 A. HNC, civil engineering, yes. 3 Q. Yes. We see that, and other qualifications as well. 4 And back to page 1, please. You set out your key 5 project experience? 6 A. Mm-hm. 7 Q. We can see a number of projects there, and also between 8 July 2008 and December 2013, you were construction 9 manager for Bilfinger in the Edinburgh Tram Project; is 10 that correct? 11 A. That's correct, yes. 12 Q. Is it also correct to say that while you had 13 considerable construction experience, you had no prior 14 experience of constructing a tram or light rail scheme 15 before the Edinburgh Project? 16 A. No, just look at my CV if it's on there. Possibly 17 during the 1998-2000 Construction Manager, Border 18 Structures, I was actually involved in the civils works 19 on the Croydon tram. 20 Q. I understand. So when was that? 21 A. Some time between 1998 and 2000. You can see 22 Construction Manager, Border Structures. 23 Q. Yes. 24 A. So management of numerous civil engineering projects 25 throughout the UK. One of these projects was the civil 98 1 aspects -- some of the civil aspects on the Croydon 2 tram. 3 Q. Thank you. 4 We can put that to one side now. I would like to 5 take you on to the statement, please, you provided to 6 the Inquiry? 7 A. Yes. 8 Q. It's TRI00000033. I think there may also be a hard copy 9 on the desk in front of you as well? 10 A. Yes. 11 Q. I just ask you please to formally confirm your 12 signature. Last page at page 2, please? 13 A. That is my signature, yes. 14 Q. Thank you. Could I ask you to confirm that that is the 15 written statement you have provided to the Inquiry? 16 A. It is, yes. 17 Q. Thank you. And your evidence to the Inquiry will 18 comprise both that written statement and the evidence 19 you give today. 20 Just before we go through your statement, can I ask 21 just a very general and introductory question, 22 namely: how did your experience on the tram project 23 compare with your experience on other projects? 24 A. You want the honest answer? In my opinion it was 25 a disaster. I have never experienced everything. 99 1 I have worked in construction for 40 years and I've 2 never experienced such a project. 3 Q. Can you expand upon that a little? 4 A. Just the -- the total lack of acknowledgment by a client 5 on what the project was about. They had no concept of 6 the project, the client. 7 Q. Any particular features or do you just mean overall? 8 A. Just overall, his general -- had no -- I do not think 9 they'd ever done a construction project before. 10 Q. Did you think that was an underlying problem? 11 A. During the construction phase, yes. 12 Q. We might come back to expand upon some of these matters. 13 A. Okay. 14 Q. Could I then please start at page 1 of your statement. 15 And in paragraph 1, about halfway down, you set out your 16 responsibilities -- 17 A. Yes. 18 Q. -- as Construction Manager. The sentence commences: 19 "I had the title of Construction Manager which meant 20 that I was responsible for all the Bilfinger 21 construction elements including managing all the 22 sub-contractors, interfacing with the client, interfacing 23 with our partner, Siemens, and co-ordinating the whole 24 construction process. I reported directly to 25 Martin Foerder, the Project Director for Bilfinger." 100 1 As a point of detail, I think, Mr Donaldson, you 2 were there from July 2008? 3 A. Yes. 4 Q. I think Mr Foerder arrived perhaps around March 2009; is 5 that correct? 6 A. That's correct. There was a previous Director whose 7 name escapes me. 8 Q. Was it Mr Colin Brady perhaps? 9 A. Colin Brady, that's correct. 10 Q. Over the page at page 2, just by way of introductory 11 overview, you say, in the first line: 12 "The majority of the works were delivered by 13 Sub Contractors contracted to Bilfinger." 14 You go on to list the main subcontractors? 15 A. Mm-hm. 16 Q. Could I also please go to page 5 to ask you about 17 something in paragraph 11. 18 A. Yes. 19 Q. In paragraph 11, about halfway through, you say 20 a sentence commencing -- it's three lines down: 21 "I cannot recall when I first became aware of the 22 dispute or who was involved, but when I started working 23 for BSC, Schedule 4 was one of the first documents that 24 I was shown. I have read Schedule 4 hundreds of times 25 and I think it is a pretty good document which outlined 101 1 Bilfinger's qualifications." 2 Can you remember when you say when you first started 3 working for the consortium, Schedule 4 was one of the 4 first documents you were shown, can you remember who 5 showed you that document and what was said about it? 6 A. Who showed me? Probably again Jim -- Jim Rice was the 7 construction manager before I got there. So he was 8 likely to have been the person who showed it to me. The 9 second part of your question, could you just ask again, 10 please? 11 Q. Yes. I think I also asked what was said about it? 12 A. With regard to? 13 Q. Well, put it this way. Why were you shown Schedule 4 -- 14 A. I was shown lots of documents, but, you know, I think at 15 that time, you know, and I have said it in my next 16 sentence, it's a good document because obviously it was 17 part of the contractor's obligations but there was lots 18 of open issues. The design wasn't finished. So 19 Schedule 4 was an important document to be referred to. 20 Because it listed out our qualifications. 21 Q. When you also say in your statement that you have read 22 Schedule 4 hundreds of times? 23 A. Yes. 24 Q. Why? 25 A. Because, again, just to -- for me to try and fully 102 1 understand what was -- what was priced, what we were 2 obliged to provide, and what we were not obliged to 3 provide. 4 Q. Thank you. Go back, please, to page 2 of your 5 statement. In paragraph 3, the first sentence, you say: 6 "I joined the Tram Project in July 2008 and my 7 initial impression was that I should have been there six 8 months earlier." 9 A. Yes. 10 Q. Why do you say that? 11 A. Well, again, I'm a construction person, and I'm never 12 involved in a project soon enough. If -- ideally, 13 I should be there at conception. 14 What happened in this case, Scott McFadzen was the 15 guy that I knew on the trams, and obviously the offer of 16 employment couldn't come until the contract was signed. 17 So that -- you know, I'm never involved early enough 18 on any project, but I knew the restriction, until the 19 contract was signed, there might not have been a job for 20 me. 21 Q. So when you say there your "initial impression was that 22 I should have been there six months earlier" -- 23 A. I will say that about any project. 24 Q. I understand. 25 Now, another matter. tie have criticised the 103 1 consortium for a delay in mobilising and entering into 2 contracts with subcontractors. Do you have any views on 3 that allegation? 4 A. I think the general project mobilised in accordance with 5 what was available. Obviously there was ongoing 6 discussions with subcontractors, but a lot of these 7 subcontractors that's been mentioned there had 8 actually -- you know, the MOUs, memorandums of 9 understandings, pre-tender agreements. 10 It started, allowed the works to start without them 11 being in -- in contract. 12 So, you know. It's an ongoing process. 13 Again, you can't award contracts until the contract 14 starts. 15 Q. When you say: 16 "I think the general project mobilised in accordance 17 with what was available." 18 What do you mean by what was available? Do you 19 mean -- 20 A. Well, what was available -- not available by MUDFA not 21 being finished. 22 Q. So do you mean by what works were -- 23 A. What work sites were available to us. 24 Q. Now, a separate point. 25 Are you able to give the Inquiry an overview of what 104 1 works had been carried out before you joined the 2 project? 3 A. Well, what I can remember, there was site clearance 4 activities along the length of what we called the 5 off-street works, you know, from Haymarket to the 6 airport. 7 Demolition of the pub at Haymarket whose name 8 I forget now, where the tram stop is now. There used to 9 be a pub there. The demolition of that was ongoing when 10 I arrived. 11 Demolition of some buildings in and around the 12 Murrayfield area were ongoing. 13 Q. Are you able then to turn to when you did arrive in July 14 2008, looking at between, say, July 2008 until the end 15 of that year, can you give an overview of the works 16 carried out during that period? 17 A. Well, on-street, Leith Walk was a place that we were 18 scheduled to go in and commence. And through various -- 19 we tried on numerous occasions to get a start, and ended 20 up laying, I don't know, something like 100 metres of 21 kerbs and couldn't get access because of the incomplete 22 MUDFA works. So that went on for six months, and 23 I think tie finally instructed us to pull out of Leith 24 Walk. 25 So that -- I don't know when that was now, but some 105 1 time either late 2008 or early 2009, that instruction 2 came. It was impossible to -- to carry out any 3 meaningful work in that area, because of the amount of 4 utilities that were still there. 5 Q. I think we saw a letter yesterday dated March 2009 which 6 gave that instruction? 7 A. Yes. 8 Q. I'll come back to Leith Walk in a second to your 9 statement? 10 A. Okay. 11 Q. Can you remember if any other works were carried out in 12 the second half of 2008, apart from Leith Walk? 13 A. Between -- let me think now -- Edinburgh Park Station 14 area, there was site clearance, I mentioned previously. 15 First stage earthworks had commenced, and along from 16 Carrick Knowe golf course heading west, again, site 17 clearance and first stage earthworks had commenced. 18 Q. So in short, is it correct to say that between July 2008 19 and the end of the year, the consortium were trying to 20 carry out both on-street and off-street works? 21 A. And off-street works, yes. In accordance with -- they 22 were trying to achieve what was scheduled in the 23 programme at that time, and we were following the 24 overall programme. Or trying to. 25 Q. I'll come back to the programme and the main 106 1 difficulties there, if I may, slightly later. 2 But sticking with Leith Walk, if I could go back to 3 your statement, please, to page 3, paragraph 5? 4 A. Yes. 5 Q. You say, about four lines down: 6 "In summer/autumn 2008 we went to start work at the 7 bottom of Leith Walk, but MUDFA were still there." 8 A. Yes. 9 Q. "As soon as we went in it was clear that MUDFA had not 10 completed. The whole place was still strewn with 11 utilities. We jumped, we moved, we did this, we did 12 that, we moved here and there." 13 You then say: 14 "We spent GBP500,000 on 10 metres of kerb because of 15 all the aborted work." 16 I wasn't sure what that meant? 17 A. That's a bit paraphrasing, the 500K. The whole thing, 18 the principle I was trying to say in that statement was 19 we spent that time and we produced nothing in that time. 20 That's what I really meant by that statement, because of 21 all the -- again, the process, the change process, where 22 you had to give estimates before you could proceed. 23 Trying to follow the contract and every excavation you 24 opened up, you found a change to ask, so therefore you 25 had to follow the process. 107 1 So it really just was -- it was -- it was 2 unworkable, the actual contract in that context down 3 there, to uncover all these changes and try and 4 construct in parallel with it. 5 Q. And a few lines down, you also say, you referred to the 6 dynamic kinematic envelope, DKE? 7 A. DKE, yes. 8 Q. You then say they actually moved it in a lot of cases on 9 to infrastructure works -- 10 A. Yes, subsequently, we found that out. They were moving 11 utilities on to what we were going to build on later. 12 Q. Thank you. I'll leave that there and move on, please, 13 to 2009. 14 CHAIR OF THE INQUIRY: Can I just ask you about that last 15 answer. If you are moving utilities, would you not 16 normally do that in accordance with the design that 17 would show you where they were to go? 18 A. That's correct. You would. And again, I -- what were 19 they called, the SDS design, they were designing both 20 the utility diversions and the infrastructure. So -- 21 I was saying so you would expect there to be some 22 co-ordination there, yes. 23 CHAIR OF THE INQUIRY: When you say utilities were on some 24 occasions moved to where the kinetic envelope was to 25 be -- 108 1 A. I think the brief was, and again, I'm giving you my 2 opinion. I think the brief that somebody gave SDS, 3 right, and MUDFA was to move it horizontally 1.2 and 4 vertically 1.2 outside the DKE. That might not 5 necessarily have avoided the civils infrastructure 6 works. 7 CHAIR OF THE INQUIRY: So you're saying that the -- if the 8 design did result in infrastructure being moved into the 9 area where you were going to be doing the civils work, 10 that might be -- 11 A. Abortive work. 12 CHAIR OF THE INQUIRY: It might be caused by the faulty 13 instructions to the SDS? 14 A. Faulty, pardon? 15 CHAIR OF THE INQUIRY: Instructions. 16 A. Instructions to? 17 CHAIR OF THE INQUIRY: To SDS. 18 A. By who? 19 CHAIR OF THE INQUIRY: Well, by whoever was giving them -- 20 A. The brief. That's what I'm saying. The design brief, 21 whatever the design brief, that was the -- in my 22 opinion, the fault, wasn't it, because why would you 23 move just as generalisation of a DKE, 1.2, when you 24 might -- you are not looking at the detailed 25 infrastructure design, where moving it horizontally 1.2 109 1 to a certain location might give you a problem two years 2 down the line, which in fact that's what happened. 3 CHAIR OF THE INQUIRY: So did these infrastructure works 4 which had been moved, did they have to be moved again? 5 A. Yes. On the works -- in areas, you know, from 6 York Place, the on-street works that were eventually 7 constructed, yes. 8 MR MACKENZIE: Thank you. Just to follow up on that point, 9 Mr Donaldson, you talked about utilities having been 10 moved outside the DKE, but into a place where there was 11 conflict with other civil infrastructure works. 12 A. Yes. 13 Q. Can you give examples of these other civil 14 infrastructure works, the utilities -- 15 A. On the works that were carried out, in the Haymarket 16 area, there were gas mains that had been previously 17 moved, and ended up being underneath proposed OLE 18 foundations, for example. Or duct boxes or -- you know, 19 because if -- if you go outside and look out obviously 20 the -- there's two tram tracks are there. The DKE is 21 there, but in a lot of cases, the OLE infrastructure is 22 further out again. So they moved them outside this 1.2 23 horizontally, but not taking cognisance of: oh, there's 24 an OLE foundation going to go there in two years or 25 whatever, whenever it happened to be in the future. 110 1 Q. Thank you. 2 Again, then, moving into 2009, if I may, are you 3 able to give the Inquiry an overview of the works 4 undertaken by the consortium in 2009? 5 A. Honestly, I couldn't, no. I was asked that on the day. 6 You would have to look at -- we produced monthly reports 7 that would tell us where we are, but, you know, where -- 8 trying to tell you now where what we done in 2009, 9 I couldn't tell you that, no, without referring to the 10 monthly reports, yes, I could read them. We could all 11 read them and that would tell us what we did during that 12 time. 13 Q. I'll come back to some of those reports shortly. 14 If I could stick with your statement, please, in 15 page 2, in paragraph 4. You say in the second sentence: 16 "In 2009 we went into Princes Street, outside 17 Haymarket and Murrayfield." 18 So presumably those works were carried out then? 19 A. Princes Street we did, obviously, we did Princes Street 20 in 2009, yes. Outside Haymarket, that was the 21 Haymarket Yards area, just outside tie's office, yes. 22 Q. You then go on to say: 23 "This is when all the change conflict started 24 coming with people saying don't do this, you can't do 25 that, this is going to dispute." 111 1 Can you explain that? Who was saying these things 2 and why? 3 A. Well, again, prior to that, we had been trying 4 proactively with tie, and with not much success, to try 5 and get co-operation and to try and make the job work. 6 And -- but in 2009 there was a change from somewhere on 7 high and said: no, we are going to revert back to the 8 contract here and apply the contract. So up until that 9 time we'd been trying to, you know, move things forward 10 in a co-operative manner. But in 2009 we didn't. We 11 changed back -- reverted back to the contract. 12 Q. I understand. I would like now to go to some of the 13 monthly reports, please. 14 A. Yes. 15 Q. The first one is CEC01169379. We can see this is 16 a period report to 8 November 2008? 17 A. 2008; yes, okay. 18 Q. Were these monthly reports prepared by the consortium? 19 A. Consortium, yes. 20 Q. And do you remember -- do you recall who produced them? 21 A. We all produced -- each -- I had a section to do. 22 Siemens guys had a section. CAF had a section to do. 23 So individually, you know, all of the different 24 components, I did the construction section. I also 25 assisted with the civils planning section. So it was -- 112 1 it's obviously -- it's a consortium report. So lots of 2 different people to provide input to it. 3 Q. Were the reports sent to tie? 4 A. They were, yes. 5 Q. Go then, please, to page 3 of this report. If I could 6 start, please, with the second paragraph, you see it 7 states: 8 "In the absence of a formal revision to the Contract 9 programme, works are being planned and managed using the 10 12 week look-ahead programme." 11 Now, I think we have heard evidence that there was 12 a known mismatch between the construction programme 13 produced by the consortium and the SDS design programme, 14 and that mismatch was known at contract close in May 15 2008 -- 16 A. This was the mismatch at award, wasn't it? 17 Q. Yes. So is the reference to the absence of a formal 18 revision to the contract programme -- is that 19 a reference back to that mismatch? 20 A. Could I read it just to see if I can understand ... 21 I'm not quite sure what the -- I remember, you know, 22 the V26, or the numbers there, but they don't mean 23 anything to me now. V26 versus V31, 31 is a later 24 version of that programme, but I don't know -- slippage 25 of the design programme. V26 to V31, I don't know what 113 1 that means, yes. 2 Q. That's okay. Just by way of explanation, I think the 3 consortium construction programme had been drawn up with 4 reference to design programme version 26? 5 A. Right. 6 Q. However, by the time of contract award, the design 7 programme -- 8 A. Had been moved on on a monthly basis. So the V31 -- if 9 you take that, it's five months later, then, isn't it? 10 Q. Yes, and V31 was the version in force at May 2008 11 contract award? 12 A. Right. 13 Q. Be that as it may, can I ask you this question: did the 14 absence of a formal revision to the contract programme 15 cause you any problems in planning and carrying out the 16 construction works? 17 A. It's always difficult, and that's where the 12 week 18 comes into it, because you're trying to plan -- if you 19 looked at the contract programme, then you're behind. 20 You know, because that is the difficulty. But then you 21 look out the window to the real world, and we try and 22 produce a 12-week look-ahead, what we really can achieve 23 with where the project is. 24 Q. So was the 12-week look-ahead programme a substitute or 25 interim measure -- 114 1 A. No, I wouldn't say a substitute. It was supplementary 2 information to try and advise all parties what we 3 intended to do in the short term. 4 Q. If there had been -- 5 A. It was -- sorry, it was also a contractual requirement, 6 I think, to provide a 12-week programme. 7 Q. Which may answer my next question. If there had been 8 a formal agreed revision to the contract programme, 9 would you in any event have used this 12-week look-ahead 10 programme? 11 A. We would have. We actually -- internally, we would have 12 stepped it down to weekly. You know, in greater detail, 13 the further levels you go down, you produce more detail. 14 But at that level, a 12 week programme, a certain amount 15 of detail in it, more than the contract programme, and 16 below that, there are weekly -- well, monthly, and then 17 weekly programmes that we produced internally. 18 Q. If we could then please go on to the next paragraph. It 19 states: 20 "A significant number of civil design packages are 21 still not issued IFC, particularly those required for 22 track work in sections 1 and 7." 23 I'll pause there. I think section 1 was essentially 24 the -- 25 A. On-street, yes. 7 was the airport section, yes. 115 1 Q. Gogar to airport; is that right? 2 A. Yes. 3 Q. It may be an obvious question, but what problems did the 4 lack of IFC design packages cause you in trying to plan 5 and carry out the construction works? 6 A. Well, again, I have worked on numerous D&B jobs, design 7 and build, and you don't have the whole design at the 8 start, but there's a sequence, so you need -- if we work 9 from the bottom up, in the track, you need the 10 earthworks design to get you to a level. The track work 11 can come later. So that there's a sequence. We all 12 understand with fast-track projects now that the whole 13 design is not in place at day 1. But you need to have 14 it procured, you know, the design programme -- or the 15 construction programme, there's a circle there, whatever 16 is first, and there's a co-ordination that it has to be 17 produced in line with the construction sequence. It's 18 not necessary to have it complete before you start, or 19 else we would be waiting on -- all jobs would take much 20 longer to get off the ground. 21 Q. So is the problem for you then not so much that the 22 design IFC wasn't complete at the start, but rather it 23 would have to be produced in accordance with the 24 programme? 25 A. With the programme. 116 1 Q. And if it wasn't -- 2 A. That's where the alignment should have been between the 3 SDS design programme and the consortium construction 4 programme. 5 Q. And if the design isn't produced in accordance with the 6 design programme -- 7 A. Then there's going to come a point when the construction 8 will be a problem, of course. 9 Q. I'm sorry, if you could let me finish the question 10 before you answer it, or the transcript will just become 11 a bit bitty. 12 A. Okay. 13 Q. So is the problem for you that if the design isn't 14 produced in accordance with the design programme, you 15 then are caused problems? 16 A. That's correct. 17 Q. Thank you. 18 Looking please at the next paragraph in this report, 19 we see it states: 20 "System engineering and procurement is in progress, 21 with initial trackwork material deliveries due in the 22 period." 23 A. Yes. 24 Q. "The process of incorporating Consortium proposals into 25 the civil designs, by means of Development Workshops 117 1 with tie, has commenced but will be accelerated to 2 produce approved designs to support procurement and 3 construction." 4 If I can pause there, do you see the reference to 5 development workshops, did you play any part in those 6 workshops? 7 A. No. Not that I can recall. I was involved -- my 8 involvement with the designer was, again, programme 9 driven. We used to have sit downs with the designer on 10 a regular basis and say, you know: where are you with 11 this, where are you with that; so we could plan what we 12 were going to do. 13 Q. Thank you. Then two paragraphs down, please, the 14 paragraph which commences: 15 "Construction works are in progress in sections 1B, 16 2A, 5A, 5B, 5C and 7, but are all impacted by external 17 issues which require resolution through the change 18 process." 19 If I may pause there, I think section 1b was foot of 20 Leith Walk to Newhaven Road; is that correct? 21 A. I thought 1b went -- 1a was Foot of the Walk. 1b was 22 Foot of the Walk up to Picardy, I think, somewhere about 23 there. 24 Q. 2a, I think was Haymarket to Roseburn junction? 25 A. Yes. 118 1 Q. I think the 5a, 5b and 5c, I think, are Roseburn 2 junction to Gogar; is that correct? 3 A. That's correct. 6 was the depot, which wasn't mentioned 4 there. 7, from the depot to the airport, yes. 5 Q. Thank you. Was that correct, that these works were in 6 progress, but were all impacted by external issues which 7 required resolution through the change process? Was 8 that correct? 9 A. In this -- this report is -- when is it again, just 10 remind me. October, November 2008, is it? 11 Q. November 2008? 12 A. Yes. These are not my words, so I can't comment on 13 that, whether that's correct or not. I would have to 14 again look at my section of the report. I don't know if 15 you can go there and see. But that -- that's what's -- 16 that's what the consortium have said at that time. So 17 that -- you know, that's -- that's what has been said. 18 Q. Okay. The next sentence: 19 "In Leith Walk, un-diverted utilities in the first 20 work site are severely hampering progress." 21 I take it you would have agreed with that? 22 A. Yes. 23 Q. It then goes on: 24 "On Edinburgh Park viaduct, significant changes to 25 foundation works are required due to unsuitable ground 119 1 conditions. BSC have progressed temporary works in 2 advance of agreeing the necessary change to utilise 3 available limited rail possessions, but look to getting 4 the costs agreed as soon as possible." 5 Do you have any comments on that passage? 6 A. I do remember that, yes. That was the -- where the 7 unforeseen ground conditions that were encountered in 8 the pier supports to Edinburgh Park over-bridge. 9 Q. Then the final paragraph in this executive summary 10 states: 11 "The overall volume of changes, and in some cases 12 requirement for design work to produce change estimates, 13 is overloading available change management resources and 14 introducing severe delay. Disagreement over liability 15 for change, for example between Base Date information 16 and IFC drawings when produced, is exacerbating the 17 delays in agreement of changes." 18 Would you have agreed with that paragraph at the 19 time? 20 A. That's a fair assessment, I would say, at that time. 21 And that continued. You know, that theme continued, but 22 at that time I would say that's a fair assessment. 23 Q. Could I also just pause and ask you to explain how the 24 change process worked within the consortium. So let's 25 say as construction manager, you open up a road and 120 1 discover an undiverted utility which would lead to 2 a Notified Departure. What happened within the 3 consortium as to how that was processed? 4 A. I'm trying to remember the names now. Did we have -- 5 was it TNC, tie notice of change? Was that the first -- 6 again, back -- back to what I said previously. The 7 Schedule 4, although I have read it hundreds of times, 8 again, I'm looking after lots of guys, managers out 9 there. They have to be aware of what is -- because if 10 they know it was a change, they would carry on. We are 11 generally -- we try and solve -- problem solvers within 12 the contract. You've got to work within it. 13 So not just me, but all the managers who worked for 14 me and the subcontractors, they were also aware of 15 Schedule 4 and they would recognise if they came across 16 something that fell into that category. 17 That's the first thing. Is it a change or is it not 18 a change? So that discussion would go on. It is 19 a change. And then the tie -- I think it was a tie 20 notice of change. I forget now the terminology, but we 21 certainly had to notify tie that we found something that 22 is not in accordance with our obligations to solve. 23 Q. I think we have in the Inquiry seen formal letters 24 notifying change, INTC? 25 A. INTCs. That's the word. 121 1 Q. I think they were sent by the Project Director, 2 Mr Foerder? 3 A. All correspondence obviously came through Martin, but 4 there were -- the team behind them. Martin wouldn't be 5 physically out there finding all these problems. You 6 had 100 guys out there, managers, physically out there, 7 and they knew the process, and they would be elevated up 8 through to the one letter that went to tie. 9 Q. So how did that work from the guys on the ground finding 10 something they thought was a change, leading to the 11 letter from Mr Foerder to tie? What steps -- 12 A. Okay. 13 Q. In between -- 14 A. We did have a -- we had what we called a change team, 15 right. How we physically communicated between the site 16 and the change team, I can't recall. You know, the 17 actual mechanics, but it was a communication. 18 So we had a change team managed by Kevin Russell. 19 He was -- he was our contract manager, but there was 20 some -- there was a Mexican guy as well whose name 21 escapes me. 22 Anyway, we had a change team in there. The site had 23 to inform the change team. Again, another internal 24 discussion. Is it a change? It's not a change, and out 25 of that, came the letter from Mr Foerder to tie. 122 1 Q. Did you have any involvement in producing estimates 2 following a notified change, or is that a matter I would 3 be better asking Mr Foerder about? 4 A. I was involved for, say, construction details, programme 5 impacts or assessments, things like that. So yes. 6 Partial -- again, it is a whole team thing. You've got 7 quantity surveyors. You've got planners, construction 8 people, all providing input to the estimate. 9 Q. Are you able to give an overview of how estimates were 10 produced by the consortium? 11 A. Overview in -- the context of? 12 Q. Well, how did the consortium go about producing 13 an estimate? Who was involved and who -- 14 A. I have just said that. You had all these different 15 parties in there, co-ordinated by the change team. But 16 the construction people were involved. The planners 17 were involved. 18 Q. And who was in charge of that process? 19 A. I'm -- ultimately, I think it was Kevin Russell, 20 I think. Kevin Russell. I don't -- I'm guessing but 21 I think it was Kevin Russell. 22 Q. I would like to move on to the report for December 2008. 23 It will come up on the screen. CEC01121557. 24 Go to page 3, please. We can see some of the 25 paragraphs are quite similar to before. For example, 123 1 paragraph 2. I won't read it out, but again we see 2 reference to the absence of a formal revision to the 3 contract programme, et cetera. 4 The next paragraph we see: 5 "Minimal progress has been made on issue of civil 6 IFC design packages particularly those required for 7 track work in sections 1 and 7. Efforts to resolve 8 outstanding issues in technical meetings have not been 9 successful, since the issues are largely commercial." 10 Then the next paragraph, we again see similar 11 wording in relation to development workshops, and then 12 the last paragraph, we can see that provides: 13 "Limited construction works have been progressed in 14 sections 1B, 2A, 5A, 5B, 5C and 7, but are all impacted 15 by external issues which require resolution through the 16 change process." 17 We've seen that before in a previous report. 18 A. Mm-hm. 19 Q. We then see: 20 "Discussions are in progress to agree an interim 21 change mechanism to permit works to proceed whilst the 22 full change process is followed. Until this is in 23 place, BSC will not progress any further changed works 24 prior to agreement on costs." 25 Is what is set out there, does that recollect with 124 1 your general -- 2 A. This is December 2008. This is again -- I think we said 3 earlier -- it had been decided to revert back to the 4 contract and the goodwill was being taken away. 5 Q. We see the reference to discussions are in progress to 6 agree an interim change mechanism. Now, I think that 7 didn't happen. There was no agreement on an interim 8 change mechanism? 9 A. Yes. 10 Q. Does that accord with your recollection? 11 A. This is across the board, isn't it? It goes on -- 12 I think they got -- eventually there was an interim 13 agreement made on Princes Street, but this is the whole 14 project. I don't -- was that ever agreed? I don't 15 think so, it was ever agreed, no. 16 Q. Thank you. I would like just to chart progress by 17 looking at the next report in January 2009. It's 18 CEC01103816. 19 Again, page 3, please. In paragraph 2, again, we 20 see similar wording to before. 21 A. Yes. 22 Q. Then two paragraphs below that, again, you see the 23 reference to limited progress and issue of the civil IFC 24 design packages, et cetera. Then the last paragraph -- 25 I'm sorry, we also see the paragraph beginning "System 125 1 engineering design", et cetera, again reference to the 2 development workshops. Then last paragraph, we see: 3 "Limited construction works have been progressed 4 in ..." 5 The same section as before. 6 Then again: 7 "... are all impacted by external issues which 8 require resolution through the change process. 9 Discussions are in progress to agree an interim change 10 mechanism to permit works to proceed whilst the full 11 change process." 12 So I think the impression given from these monthly 13 reports we've looked at is that the construction works 14 were fairly seriously affected by the dispute about 15 change. Would that be a fair way to put it? 16 A. That's a fair assessment you could make, yes. 17 Interestingly enough, I'm just looking at it, sorry. 18 Section 6 is -- never seems to get a mention there, but 19 6 was the depot, and -- okay. I'm just wondering why -- 20 looking back now, all this time, there must be a reason, 21 but I can't remember at the moment why the depot hasn't 22 got a mention there, because we did -- the construction 23 of the depot did continue. Now, whether that was kept 24 going on goodwill, I'll have to go back to my memory 25 banks, but section 6, the depot, did carry on. You 126 1 know, we carried on with the whole of the construction 2 of the depot building during all of this. 3 Q. This report is January 2009. 4 A. Yes. 5 Q. What I can't remember off the top of my head is when 6 work on the depot started and when it -- 7 A. Well, it started in -- when I got there, because when we 8 went in there, we couldn't start. The -- tie had 9 already started the excavation, the bulk excavation, to 10 divert again utilities. It was a water main, a gas 11 main, and an HV cable that had to be diverted. It was 12 in the footprint of the depot building. 13 Q. Do you remember when work on the depot did start? 14 A. If you could pull up -- I thought we actually started 15 in -- no, but the reports would tell you. In my detail 16 report -- that's a summary. Further down there's 17 a construction report, and if you went there, you would 18 see when -- but -- I'm just trying to remember now if -- 19 did the goodwill continue -- I can't ever remember us 20 stopping in the depot. Applying the contract. Because 21 the depot continued, the building continued. 22 MR MACKENZIE: Thank you. We can perhaps separately go back 23 through the reports and check the detail of that. 24 My Lord, that might be a suitable time to pause. 25 CHAIR OF THE INQUIRY: We will adjourn now for lunch and 127 1 resume again at 2.10. 2 (1.02 pm) 3 (The short adjournment) 4 (2.10 pm) 5 CHAIR OF THE INQUIRY: Good afternoon, Mr Donaldson. You're 6 still under oath. 7 A. Okay. 8 MR MACKENZIE: Thank you, my Lord. 9 Mr Donaldson, we had looked before the lunch break 10 at one or two of the consortium's period reports. What 11 I would now like to do is take you to another document I 12 think you may not have seen before. We will bring it up 13 on the screen. It's TRI00000177. Now, in short, this 14 is a document produced by the Inquiry. What somebody in 15 the Inquiry has done essentially is gone through each of 16 the consortium reports and extracted the figures showing 17 the percentage of construction works that had taken 18 place against the planned percentage of construction 19 works. 20 So just by way of example, if we can blow up the 21 first bullet point, please, we can see in period report 22 to 31 January 2009 4 per cent of a planned 25 per cent 23 of work had been completed "(against planned progress 24 programme revision 1)". 25 I appreciate you'd not seen this before, I'm not 128 1 going to ask you to confirm the various figures are 2 correct. I'm just going to go to about three or four of 3 the figures to see if the general picture painted very 4 broadly accords with your recollection of things at the 5 time. 6 A. Okay. 7 Q. So, for example, if we could go about halfway down the 8 page, please, we'll see an extract from the period 9 report to 30 January 2010. If we blow that up, please. 10 This report states that at that time, January 2010, 11 11 per cent of a planned 65 per cent of construction was 12 complete. 13 Very broadly, does that seem about correct? 14 A. Yes. Again, I'm going to ask a question first, right, 15 because was at 30 January, had the scope changed? Were 16 we -- is this still the full project then or -- because 17 that would give a different answer, if you understand my 18 question. 19 Q. Yes. I do. 20 It's still the full project. So in short, I think 21 the Mar Hall Agreement was in March 2011? 22 A. Okay. So this is still the whole project at that time. 23 What -- the original -- this is from Newhaven to the 24 airport? 25 Q. Yes. 129 1 A. Right. Okay. 2 Q. I think it must be some time after March 2011 -- 3 A. 11, right, okay. 4 Q. -- there must have been a new programme stopping at 5 York Place? 6 A. Again, I see the numbers there. I would have to look at 7 the reports and I could tell you if it's saying -- in 8 the BSC report, it's saying 11 per cent of planned, 9 I don't know how that calculation has been done. 10 I just -- I can see it there on the screen, but I have 11 no comment really to make on that. I would have to look 12 at the calculation. 13 Q. Yes. Maybe we should, just by way of example, see if we 14 could go to that report. So try and go, please, to 15 CEC00588290. 16 Now, I don't have a page number, but if we could 17 scroll down and try and find paragraph 4.1.3. It maybe 18 starts about page 10 or something. Start at page 10. 19 Carry on going, please. 20 We will have to carry on again, please, to find 21 4.1.3. Just carry on going, please. Carry on. 22 A. Okay. 23 Q. There we go. 24 A. Okay. 25 Q. So I think what has been done under this -- 130 1 A. I recognise that now, yes, okay. 2 Q. We see under construction, I think we can -- 3 A. The summary, yes. It's 11 per cent versus the 65, yes. 4 Q. Yes. 5 A. Okay. 6 Q. So I think what the Inquiry have done is simply try 7 and -- 8 A. To just lift that summary figure on to that table that 9 you showed me. 10 Q. Yes, indeed. Really this Inquiry paper has been 11 produced with a view to trying to give an overview in 12 just a few pages, rather than having to go into all the 13 detail of every single month of the report. 14 A. Okay. 15 Q. So that's how we have got in this bit of paper to the 16 planned progress of 65 per cent compared to the actual 17 progress of 11 per cent. So these are figures, I think, 18 produced by the consortium in the period reports. 19 A. Yes. 20 Q. If we then leave that to one side and go back to the 21 Inquiry's document, please, the TRI00000177. As we look 22 for the entry for January 2010, and this is just by way 23 of example then, five bullet points down there's 24 reference to the report of 22 May 2010. I think we can 25 see there 18 per cent actual -- 131 1 A. Against a planned of 83. 2 Q. Planned of 83 per cent. 3 Now, I think that was still the -- 4 A. The complete -- the original scope, yes. 5 Q. Yes, and in addition, I think, the programme revision 1, 6 because we then go to the next bullet point. I think 7 we'll see it's charting progress against a different 8 program. We see the period report to June 2010. 9 A. Okay. 10 Q. 19 per cent actual progress against the planned 11 24 per cent of construction programme revision 3A. 12 So it looks as though at that stage a different 13 version of the construction programme has been used to 14 chart progress; does that seem right? 15 A. Yes, that's correct. 16 Q. If we then, please, go over to page 2 of the Inquiry 17 document, in the second bullet point, the extract from 18 the period report to 26 March 2011 shows 31 per cent 19 actual progress against a planned progress of 20 50 per cent -- 21 A. Yes. 22 Q. -- of construction programme revision 3A. 23 So what I suggest, and tell me if I'm wrong, is that 24 these extracts from the reports do suggest that the 25 progress of the construction work was being 132 1 significantly affected by the disputes we've heard of. 2 A. Of actual -- what is that 19 -- 19 per cent behind, 3 isn't it? That's correct. 4 Q. Thank you. 5 CHAIR OF THE INQUIRY: It seems that the recording system 6 for the transcribers has stopped working. So we'll 7 adjourn to see if that can be fixed. 8 We'll adjourn for such time as we get the equipment 9 sorted. We'll resume again as soon as possible. 10 (2.17 pm) 11 (A short break) 12 (2.20 pm) 13 CHAIR OF THE INQUIRY: I understand that the recording 14 equipment is working again. 15 You're still under oath. 16 A. Okay. 17 MR MACKENZIE: Thank you, my Lord. 18 Before we leave this document, Mr Donaldson, we can 19 also see under design the Inquiry has undertaken 20 a similar exercise of listing extracts from the reports, 21 but I'm not going to take you to that. We will just 22 take that as read. 23 A. Okay. 24 Q. Going back, please, to the question of the construction 25 works, are you able to give an overview of the 133 1 construction works that had been undertaken and 2 completed before the Mar Hall mediation in March 2011? 3 A. No. Not without referring to the reports at that time. 4 If you gave me the report, I could go to the report 5 and I could tell you. But what specifically was 6 complete or not complete. 7 Q. So the best source for us is to simply go back to the 8 reports. 9 A. The best source is to look at the monthly report, yes, 10 which I informed with the Bilfinger planner to produce 11 that report at that time. 12 Q. I understand. We can do that later. 13 Can I come back to the Leith Walk works, please. 14 A. Yes. 15 Q. What perhaps I wasn't clear about was the extent to 16 which you were able to complete the works in Leith Walk? 17 A. This is in 2008? 18 Q. Yes, and either 2008 or later. 19 What -- 20 A. We never went back into Leith Walk again after -- after 21 the aborted start, let's call it in, 2008. We never 22 went back. 23 Q. So were any parts of Leith Walk completed? 24 A. If it's in my statement, I call it this -- it's a famous 25 100 metres of kerb. Nothing. Nothing of any 134 1 significance was completed and we spent lots of money 2 doing it. 3 Q. I think your statement refers to 10 metres of kerb? 4 A. That is me paraphrasing at the time. We could get the 5 exact details. It might have been 50 metres of kerbs. 6 It was insignificant for the amount of expenditure that 7 occurred during that time down there. 8 CHAIR OF THE INQUIRY: What about the utility works? 9 Although that wasn't your -- 10 A. I don't want to be cheeky, right, but when I first 11 arrived, and walked down Leith Walk, I thought I was in 12 Beirut, believe it or not, the amount of utility 13 excavations that were open from London Road all the way 14 down to the Foot of the Walk, with nothing happening in 15 some of them. There was excavations. It was like bomb 16 craters everywhere. It was -- I hadn't seen anything 17 like that before. The amount of disruption to the 18 streetscape was just incredible. 19 CHAIR OF THE INQUIRY: So -- 20 A. So all utility works, MUDFA works. 21 CHAIR OF THE INQUIRY: Do I take it that you're not able to 22 tell us, and it is not a criticism, to what extent the 23 utilities were -- the diversions were completed in Leith 24 Walk? 25 A. Not -- not by progress. But did the contract have it 135 1 should all have been completed prior to us commencing? 2 CHAIR OF THE INQUIRY: Yes, I appreciate that. 3 A. At some time after that, you know, tie did produce and 4 update regular reports on the status of each utility on 5 the project. 6 CHAIR OF THE INQUIRY: Yes. 7 A. So again, could you look back in the monthly records, 8 and they were giving reports on the completion of the 9 utilities. 10 CHAIR OF THE INQUIRY: Thank you. 11 MR MACKENZIE: Thank you. 12 I would like to move on to the question again of the 13 programme, please, with reference to your statement at 14 page 4. 15 A. Yes. 16 Q. If we go, please, to page 4, at paragraph 7, I think 17 essentially in this paragraph, the Inquiry has set out 18 its understanding of the programme and any revisions to 19 it. If we could please pick up about a third of the way 20 down, the sentence commences: 21 "I also note that a proposed revised Construction 22 Programme was submitted to TIE on 2 June 2008 but 23 remained without agreement until 17 December 2008 ... 24 I also noted that by that time (ie December 2008) the 25 revised Construction Programme (Revision 1) 'was by then 136 1 sufficiently out of date and disrupted by unavailability 2 of work sections that it was recognised by Infraco and 3 tie that a further revision was necessary'." 4 That's taken from an email dated 8 December 2009 5 from Kevin Russell, and also Mr Russell's email noted 6 that revision 2 was rejected by tie on 21 August 2009 7 and revision 3 was scheduled to be complete by the end 8 of January 2010. 9 A. Mm-hm. 10 Q. I think that sets out the Inquiry's understanding of 11 matters. Are you able to say whether you agree broadly 12 with that, what's set out, or is that not something you 13 are aware of? 14 A. Could I just read the bottom again, please. (Pause) 15 I know there was an undertaking -- the revision 16 numbers don't mean anything to me, but certainly the 17 concept is there that we did have a deadline in 18 January 2010 to produce revision 3. 19 So that looks -- the principle that's set out there 20 looks -- the dates, I can't really comment on the dates, 21 but the principle, yes. 22 Q. Thank you. Now, go then please to the next paragraph of 23 your statement, in paragraph 8, where you say: 24 "The Construction Programme changed over time. All 25 the utilities and all the changes were presented to TIE 137 1 every month. Even though it was not approved, we kept 2 on updating and progressing that programme." 3 Towards the end you say: 4 "We would input all the impact of whatever event it 5 was; whether it was utilities, change to our structure, 6 delays in approval. Parsons Brinckerhoff and Siemens 7 fed into that programme, and we presented it to TIE on 8 a monthly basis." 9 So is this describing something that even though the 10 formal programme hadn't been formally agreed, you were 11 nonetheless informally producing a programme you were 12 updating? 13 A. I don't know if formal is the right word. The only tool 14 that you have is the tool that's available to you. So 15 let's call it the baseline programme or the one that was 16 approved. So you have to measure yourself against that 17 programme. 18 Whether it's informal, that I couldn't really, 19 again, comment on, but that was the only tool that we 20 had to benchmark our progress against. The previous 21 approved programme. 22 Until you get approval, you can only then measure 23 yourself against what is approved. 24 Q. Yes. So you need to start with an approved baseline? 25 A. Yes. 138 1 Q. Now, is it correct to say that because of the mismatch 2 when the contract was entered into in May 2008, that 3 there wasn't an approved baseline? 4 A. That delay -- I'm just trying to think. That delay -- 5 that was in there to start with. So we started on 6 contract, and we were already -- was it eight weeks 7 behind or something? I can't remember the exact number, 8 but on day 1, because of the design delay, we will call 9 it, the job was already eight weeks behind. Is that 10 what you're asking? 11 Q. Well, what I'm just trying to work out is that we know 12 when the contract was entered into in May 2008 -- 13 A. Yes. 14 Q. -- there wasn't an agreed construction programme because 15 of the mismatch with the design programme. I just 16 wondered whether that meant that at least from the time 17 of May 2008, the consortium didn't have an approved 18 baseline programme with which to work. 19 A. Well, we were working -- let's call it unapproved, but 20 they were measuring -- we were measuring ourselves 21 against that programme, and that's why I'm trying to 22 remember the exact figure, but I think on day 1 we 23 started in theory with this contract misalignment, you 24 said, that we were something like eight weeks behind on 25 day 1. But we were still measuring ourselves against 139 1 that programme. 2 Q. I see. The exercise you describe in paragraph 8 that 3 we've just looked at, was that something that was taking 4 place -- 5 A. That was -- see -- 6 Q. From -- let me finish, please? 7 A. No. 8 Q. Was that something that was taking place from the outset 9 when you joined in July 2008? 10 A. Yes. These figures that you showed earlier, these 11 summary figures, that was Primavera was the planning 12 software that was used. These 65 per cents, 13 11 per cents, all came from all the parties inputting 14 into that schedule. The output is in high level. These 15 two numbers that you showed me earlier. 16 Q. When you say in the last sentence here, "Parsons and 17 Siemens fed into that programme and we presented it to 18 tie on a monthly basis" -- 19 A. Yes, they constructed on that. 20 Q. -- did that take place giving it to tie on a monthly 21 basis from July 2008 onwards, from outset of your 22 involvement? 23 A. Honestly, I can't remember whether -- whether -- it 24 should have because again its contractual requirement 25 to give the client updates on a monthly basis. So you 140 1 could look back at the reports and see when they were 2 issued. 3 Q. Thank you. 4 Let's move on, please, to the question of 5 Princes Street. We'll find that at page 14 of your 6 statement. 7 A. Mm-hm. 8 Q. In paragraph 21, about five lines up from the bottom, 9 you say: 10 "We were being proactive. BSC were ready and in 11 position to start works in February 2009, if only tie 12 had made a suitable instruction. Mackenzie and Crummock 13 were our sub-contractors for the labour on this job and 14 they were ready to go. In my opinion we should not have 15 started Princes Street. Princes Street was driven by 16 summer and winter ..." 17 A. "embargos". 18 Q. We will wait for the page. 19 A. I'm just looking ... 20 Q. "... embargos, the festival in the summer and Christmas 21 in the winter. There were two periods in the year when 22 you could get into Princes Street. If we had delayed it 23 another year, it would not have made any difference to 24 the overall job. A better deal could maybe have been 25 made later. tie were pushing it though, 'get in there. 141 1 get it done. You are delaying the job'. It would not 2 have made any difference to wait until the utilities 3 were clear. It was not the most cost effective way of 4 doing the job. CEC could have had a more economical 5 solution if tie had waited." 6 Now, can I ask you, please, about this question that 7 if the Princes Street work had been delayed by another 8 year, a better deal could maybe have been made later. 9 Can you explain what you meant by that? 10 A. What I meant there was that if you look at the overall 11 programme, right, delaying the construction of 12 Princes Street by one year would not have delayed the 13 project. 14 Q. And would delaying the work on Princes Street by a year 15 have perhaps allowed the utilities and any other -- 16 A. All the other contractual issues might have been 17 resolved in that year. 18 Q. If, however, the Princes Street works had not taken 19 place in February/March 2009 when they were planned, 20 were there other works the consortium could have 21 progressed in the meantime? 22 A. On the rest of the project? 23 Q. Yes. 24 A. There were, yes. Off-street. Say Leith Walk was 25 suspended. There was an instruction there. So 142 1 off-street works, Haymarket. Princes Street is only one 2 area of the project. It wasn't in the critical path. 3 That's why I'm saying you could have delayed it for 4 a year, and for the overall completion, it would have 5 made no difference. 6 Q. What Dr Keysberg had told us this morning is that he had 7 suggested to the senior people in tie that they should 8 have demobilised, I think, generally for a year to let 9 tie progress utilities and design and then remobilise 10 after a year. Are you suggesting something different, 11 maintain mobilisation -- 12 A. No, I think that's similar, isn't it? You could have 13 hopefully solved the contractual issues, come back one 14 year later, because obviously the works on 15 Princes Street had to be worked around the embargos, the 16 Christmas embargo, the summer embargos, but they could 17 have been done the same in 2010 and had no impact on the 18 overall completion. 19 Q. I just wonder if that may have required demobilisation 20 in that if instead of doing Princes Street, the 21 consortium had gone to other on-street works, I assume 22 it would have been met with the same difficulties on the 23 utilities, for example. Would that be fair to say? 24 A. Well, utilities -- ask your question again, please, just 25 so I'm just thinking. 143 1 Q. I think in short you are suggesting here that 2 Princes Street works didn't need to be done in 2009? 3 A. Correct. 4 Q. You could have waited a year? 5 A. That's my opinion, yes. 6 Q. I just wonder whether, if that option had been chosen, 7 that would have required demobilisation by the 8 consortium or whether there were other works at that 9 time they could have undertaken instead. 10 A. Right, okay. Mackenzie -- the two contractors involved 11 on the Princes Street, Mackenzie and Crummock, they 12 would have had to have been dealt with. Let's call it 13 a mini-demobilisation. Not the whole Infraco team, but 14 certainly Crummock and Mackenzie would have been 15 demobilised. 16 Q. I understand. 17 CHAIR OF THE INQUIRY: Did I understand you to say that 18 Infraco could have gone to get on with off-street works 19 during that period? 20 A. There was off-street works ongoing anyway. 21 CHAIR OF THE INQUIRY: So they could have spent -- they 22 could have concentrated their resources -- 23 A. But Crummock and Mackenzie, who were taken on board to 24 do Princes Street, in fact what we did do, I'm just 25 trying to think of the timing. Was that at that same 144 1 time, because we were actually engaged in maybe to keep 2 Crummock going, and I don't know maybe so much about 3 Mackenzie, but we actually came to an agreement with 4 Crummock to do an off-street section. Was that later? 5 I'm not sure. Because originally Crummock were on board 6 to do 1b, and when -- that was a Leith section, which 7 had the utility problems, instruction to demobilise, and 8 then thereafter came Princes Street, and then Crummock 9 got involved. Mackenzie didn't, but Crummock got 10 involved off-street. 11 That was after. That might have been 2011. 12 So my opinion -- we didn't need to start it when we 13 did, and it wasn't efficient, what we did. Did it -- 14 even the cost plus arrangement, not efficient working. 15 MR MACKENZIE: Why do you say that? 16 A. We worked -- we were doing -- let's call it 17 accelerated -- we were working long hours to try and 18 meet these embargos. tie were insisting it had to be 19 finished by Christmas 2009. Not efficient. Do it. 20 It's cost plus. We are instructing you to put weekend 21 working here, night shift working. 22 Q. I see. 23 A. Not efficient. 24 Q. So that's why it's not efficient, because the clients 25 are having to pay more to the contractor having to 145 1 work -- 2 A. Inefficiently. 3 Q. -- overtime and weekend working, et cetera. 4 A. Inefficiently, any non-productive overtime, yes. 5 Q. I understand. Now, we've talked a bit about the 6 problems on the on-street works as a result of 7 utilities? 8 A. Yes. 9 Q. And how about the off-street works? Can you remember 10 were there problems encountered there in 2008 or 2009? 11 A. Not to the same extent with utilities. There was a few 12 utilities off-street, but the biggest problem off-street 13 was change to the design. 14 Q. How did that affect the construction works? 15 A. It ground to a halt. Murrayfield corridor, for example, 16 you know, the structures changed out of all recognition 17 along that section of the works. 18 Q. The problem there, was it a similar one that then 19 invoked the change procedure and the consortium's 20 position -- 21 A. That kicks in, and then agreeing, and then that's where 22 a lot of the disputes arose out in that area, on the 23 structure forum. 24 Q. Just so I can finish, was the problem there a similar 25 one because that then invoked the change procedure, and 146 1 again the consortium took the position they couldn't 2 start work until an estimate had been agreed? 3 A. That's correct, yes. 4 Q. Thank you. 5 Going back to the question of Princes Street, 6 please, and the works that were carried out in 2009, can 7 you explain, please, to the Inquiry what the ground 8 conditions under Princes Street were like? 9 A. After exposing, you mean, once we encountered them? 10 The majority of Princes Street was -- obviously 11 there had been a tram there previously. There was 12 a concrete slab that covered -- a very high -- 13 90 per cent -- a very high percentage of the carriageway 14 on Princes Street. And below that the ground was not -- 15 pretty poor. We ended up for the carriageway, we put 16 the maximum depth of capping in. So we were down 1.2 17 below the -- the finished road level. We put the 18 maximum amount of improvement layer, capping improvement 19 layer under the trackform. So again, we were down to 20 the maximum depth required to fulfil the design 21 requirements. 22 There were utility issues on Princes Street as well. 23 A water main, I remember, running parallel on the shop 24 side, running -- longitudinally along the street or the 25 carriageway. BT, gas, I remember. There was 147 1 a particular problem at the Mound. Crawley Tunnel, if 2 anybody remembers Crawley Tunnel. That was a big 3 problem that had to be solved. The water was an old 4 water course that had been there for a long time that 5 had to be dealt with. 6 Sorry. 7 CHAIR OF THE INQUIRY: I think you said the problem at the 8 Mound. Was that the high pressure gas main at the 9 Mound, which was an old-fashioned main that burst? 10 A. I thought there was a water main at the Mound. There 11 was gas along the bottom of Lothian Road that 12 I remember. There was gas -- Castle Street maybe. 13 I can't remember. There was gas -- there will be 14 records of these. But I do remember gas. I remember 15 a water main parallel, and I remember Crawley Tunnel, 16 and BT at Lothian Road as well, I remember. 17 Just utility issues again. 18 CHAIR OF THE INQUIRY: I think somebody else has said there 19 was a void in Princes Street that would have taken 20 a double decker bus or more. Do you remember that? 21 A. No, I don't remember it on Princes Street. I remember 22 at Haymarket there was an old air raid shelter found at 23 Haymarket, and there's another one which we never got to 24 find at the top of London Road again. But at Haymarket 25 we filled a whole air raid shelter with concrete. But 148 1 that was -- I think that was post mediation that we 2 uncovered that one. 3 MR MACKENZIE: Now, I think you mentioned that the ground 4 conditions under Princes Street were "pretty poor". 5 A. Yes. 6 Q. Just so I can be quite clear, "pretty poor" because of 7 what? Was it because of things like cellars, voids, 8 soft soil? 9 A. Soft soil. It was a silty sand, is what it was. Once 10 the slab was removed. The concrete slab that had been 11 obviously taking the load on the old tram, let's call 12 it. 13 Q. I understand. 14 Now, when was that -- when were the ground 15 conditions discovered? Was that not until the 16 excavation started? 17 A. See the -- while we were still, I'm going to say, 18 negotiating this extra agreement on -- for 19 Princes Street to carry out the works at a cost plus 20 basis, with the traffic management had been set up -- 21 there was still no agreement to do the works. We went 22 along there and did further site investigation to 23 confirm the properties of the soil at formation level 24 prior to -- there is a solution in -- you know, the 25 drawing is a drawing, and it tells you there are various 149 1 solutions, depending on the bearing capacity of the soil 2 that you find. That's all in the drawings. But just to 3 give some advance, you know, planning information, we 4 went along and undertook further site investigation, in 5 advance of the works commencing. 6 Q. Were these further investigations undertaken around 7 March 2009? Does that seem correct? 8 A. Yes, that's before -- we finally got going in March, 9 about then, wasn't it? I think we put the traffic 10 management on January, February 2009, and did that 11 advance works then, yes. 12 Q. Thank you. 13 A. Not to inform the design, but to give -- help us to plan 14 the actual -- how much work we were going to have to do, 15 because the design was there. It told you, depending on 16 what you found, what you had to do. 17 Q. I understand. 18 Now, we know the works were carried out on 19 Princes Street. We've also heard evidence that there 20 were certain defects which were later remedied by the 21 consortium at their cost. 22 A. Yes. 23 Q. Do you remember what were the defects and what was the 24 cause or causes of the defects on Princes Street? 25 A. The defects? This is the -- at high level, at 150 1 carriageway level, the interface between the surfacing 2 and the trackform. It was -- when it was first done on 3 2009, the whole surface was asphalt. And there's like 4 a -- call it an isolation joint between the edge of the 5 trackform and the carriageway, and after putting traffic 6 back on, there were some signs of distress, in that 7 joint area, and further investigation of design, the 8 decision was taken to put in -- take out the asphalt in 9 the tram cross-sectional area, and replace it with 10 concrete. 11 Q. Do you have any views on the cause of these defects? 12 A. Personal views or -- my views, personal views, or -- 13 Q. Yes. 14 A. There's -- without getting too technical, there is a -- 15 again, running parallel, there's a material that 16 sounds -- surrounds the rail, and trying to compact 17 asphalt material against that, let's call it -- I'll 18 call it a free edge. It's very difficult to do, to 19 achieve the compaction. Well, if you don't achieve the 20 compaction, then the material, the asphalt isn't going 21 to perform properly. 22 Q. Is that particularly perhaps the case when heavy buses 23 are running on it and turning on it? 24 A. They wouldn't help, certainly. 25 Q. So is that a defect with the design or the construction 151 1 of the design or what? 2 A. That's where it becomes -- you get into grey areas, 3 I think, then, where it's design -- did -- it was never 4 proved that the material was not compacted, right. So 5 what caused it? We could sit here all day and debate 6 that. You could get experts, engineers in. I'm not 7 a designer. I'm a builder, right? You could get lots 8 of designers in here, and I doubt whether they would 9 come up with an agreement on what the problem was there. 10 But it was changed. Bilfinger, SDS, our designers, 11 consortium, because again Siemens are involved with the 12 trackform, came up with an alternative solution. 13 Q. Thank you. 14 Now, we've talked about the ground conditions on 15 Princes Street? 16 A. Mm-hm. 17 Q. Could I also ask you, please, about the ground 18 conditions on the other on-street sections that were 19 undertaken. So I think firstly Haymarket to the west 20 end of Princes Street, and then secondly, from the east 21 end of Princes Street down to the York Place terminus? 22 A. Okay. 23 Q. Can you tell us, please, what ground conditions were 24 discovered when these sections were excavated? 25 A. If we take from let's say Lothian Road to Haymarket, by 152 1 that time we were -- we were working post -- we were in 2 the new agreement, and we didn't -- if we talk about two 3 elements, first of all the carriageway was not 4 constructed in accordance with the SDS design. It was 5 value engineered on site by CEC, Bilfinger, and -- how 6 can I say -- managed by Turner & Townsend. 7 So it was a -- they weren't going to build the 8 specification that was in the drawings and in the 9 design. It was value engineered to minimise the amount 10 of work that had to be done to the carriageway. So 11 that's the carriageway. 12 So we never did full excavation on Haymarket to 13 bottom of Lothian Road as regards the carriageway in all 14 locations. 15 Utilities, the place -- there were lots of utilities 16 between Haymarket and Lothian Road. By that time we had 17 a different mechanism in place, post mediation, whereby 18 we collectively, with CEC, Turner & Townsend, ourselves, 19 either decided we could move, not move, change the 20 design, but, you know, come up with the appropriate 21 solution for each individual one as it happened. They 22 were all different solutions. 23 Q. Okay. Just sticking with that section, if I may, the 24 Lothian Road to Haymarket, I think you mentioned that 25 full excavation was not carried out for that section? 153 1 A. Correct. 2 Q. Was that because there was no need to because there were 3 different ground conditions than those in 4 Princes Street? 5 A. No, because by that time CEC -- that's what I'm saying. 6 CEC had changed their requirements. In the original 7 contract we had -- the Employer's Requirements had 8 a design life for a pavement, and I don't know, but I'm 9 going to guess, something like 30 years and 75 million 10 axles or whatever. So there's a design requirement for 11 that. We had to build to that requirement. That 12 requirement was removed after mediation. 13 Q. Do you know whether as a matter of fact the ground 14 conditions in that section are similar to Princes Street 15 or different? 16 A. I don't as a matter of fact, but again, you could find 17 out because what you could do on -- if we go to the 18 trackform, which is the other element between there, is 19 that didn't change. So either the -- there was -- when 20 you do excavation, you have to find out the -- what the 21 ground conditions are there, which determines how much 22 improvement layer, granular material you put in. So 23 there will be records of the ground conditions 24 encountered between Haymarket and Lothian Road. 25 Q. Now, I may have seen a reference somewhere to there 154 1 being bedrock in a section around Shandwick Place. Does 2 that ring any bells? 3 A. I can't remember any rock in Shandwick Place, no. No. 4 Q. Okay. Thank you. Could we also then deal with the 5 other section from the east end of Princes Street up to 6 St Andrew Square and down to York Place. Do you 7 remember what the ground conditions were there? 8 A. Well, again, similar. Utilities, first of all, there 9 was utility issues, particularly at the corner where it 10 turns up into North St Andrew Street, is it? Cellars 11 were another issue there. BT, I remember, gas, water. 12 But again, post mediation, the carriageway wasn't 13 excavated to full depth. It was -- again, value 14 engineered on site, scope decided, and that's what we're 15 doing. 16 But the trackform wouldn't have changed. Again, the 17 requirements for the bearing capacity for the tram were 18 tested and then whatever improvements were needed were 19 carried out. 20 Q. If these Employer's Requirements that were in place 21 after Mar Hall, if they had been in place in 2009, would 22 the degree of excavation in Princes Street that you have 23 described have been required? 24 A. No. There would be much less. 25 Q. So is it your view that even despite the ground 155 1 conditions of Princes Street you described, that the 2 solution after Mar Hall that was put in place in the 3 other on-street sections could have been put in place in 4 Princes Street? 5 A. Yes. When you think about it, there had been buses 6 running along Princes Street for a long time before the 7 tram ever arrived. 8 Q. Thank you. 9 Now, moving on to the Mar Hall mediation in March -- 10 CHAIR OF THE INQUIRY: Before doing that, could I just 11 better understand. Are you saying that after mediation, 12 there was value engineering done on site in the section 13 between Lothian Road and Haymarket and in the section at 14 the east end of Princes Street to York Place? 15 A. Correct. 16 CHAIR OF THE INQUIRY: Which resulted in a different 17 specification, that the original specification would be 18 excavation down to a certain depth, and with a view to 19 providing, say, a roadway, whatever the technical term 20 is, which would last for 30 years. 21 A. Say -- we would have to look at the Employer's 22 Requirements what that was, but it would have been 23 a design requirement originally which was -- I'm going 24 to -- relaxed or changed post mediation. 25 CHAIR OF THE INQUIRY: So the Employer's Requirements, that 156 1 we can look at, would show that the requirement was to 2 have a carriageway which would, say, last or take -- 3 say -- 4 A. A certain amount of vehicles. 5 CHAIR OF THE INQUIRY: A certain amount of vehicles. 6 I think you mentioned 75 million axles? 7 A. Whatever. 8 CHAIR OF THE INQUIRY: And a period of time you have 9 mentioned perhaps 30 years. 10 A. Yes. 11 CHAIR OF THE INQUIRY: But by value engineering on site, did 12 you then end up with something less than that? 13 A. Yes, there's no guarantee whatsoever -- you know, that 14 is -- that is correct. What is there now is -- it's 15 what is there because there is no -- the designer 16 wouldn't -- you know, they wouldn't take a -- how could 17 he take the risk on that? We're not building to his 18 design. You're just -- you're trying to save money. 19 With an engineering, you've got the hat on, there's no 20 testing being done. We are looking at areas and 21 saying: right, that's been there for 20 years, it's 22 still in situ. Because obviously technology has moved 23 on since that road was built, and maybe the testing 24 criteria, the pavement materials have all changed, but 25 it's still working. 157 1 You know, Princes Street before we arrived was 2 functional. 3 CHAIR OF THE INQUIRY: Yes. So you say the designer 4 wouldn't take the risk. 5 A. Yes. 6 CHAIR OF THE INQUIRY: So when they were value engineered on 7 site, who was taking the risk? 8 A. CEC. 9 CHAIR OF THE INQUIRY: So the Council have taken the risk. 10 A. They have. 11 CHAIR OF THE INQUIRY: Of a lesser specification? 12 A. Yes. 13 CHAIR OF THE INQUIRY: Providing a system that we don't know 14 what's -- how long it's going to last. 15 A. No, because -- it's no different to what it was there 16 before. It was -- it was working perfectly well. CEC 17 must have had it working perfectly well. The 18 carriageway, not the tram. Let's put the tram to the 19 side. The carriageway was being run over by buses, 20 being maintained by CEC, and it was working. Right. 21 What they wanted through the tram was, let's say, 22 gold plate. They wanted to start again with a proper 23 design, but the -- through the mediation, they reverted 24 back to their original requirement, where it was working 25 before, and we'll continue to maintain it. 158 1 CHAIR OF THE INQUIRY: So the original Employer's 2 Requirements, you say, were perhaps requiring the 3 gold standard for the carriageway outside the tram 4 track. 5 A. Correct. 6 CHAIR OF THE INQUIRY: If then the employers had not been so 7 demanding, if I put it that way, on the specification 8 for the carriageway, does that mean that the system 9 could have been produced at a much cheaper price? 10 A. In my opinion, yes. 11 CHAIR OF THE INQUIRY: Thank you. 12 MR MACKENZIE: Just really two final questions. The first 13 issue, Mr Donaldson, concerns the works carried out 14 after the Mar Hall Agreement. We've touched upon that 15 already, but in short how did things compare after 16 Mar Hall in terms of being able to carry out the works, 17 compared to beforehand? 18 A. Just like chalk and cheese, as simple as that, because 19 everybody was proactive -- what I'm used to doing. I'm 20 a builder. I like building things. I'm used to working 21 with clients who also want to build things. So I'm used 22 to proactively solving problems and that was exactly how 23 it was post mediation. All parties together solved all 24 the problems. 25 Q. Can you give any examples of difficulties that were 159 1 encountered, and how they were dealt with after 2 Mar Hall? 3 A. If we say on-street, you say utilities continued to be 4 uncovered, but we actually set up a -- we had a weekly 5 meeting with CEC, Turner & Townsend, and the utility 6 contractors where we all sat together, looked -- one 7 week ahead, looked one month ahead, looked two months 8 ahead to see where we were going to be, what the 9 problems were, how we were going to solve them. We 10 brought designers in. If we could move OLEs, move 11 infrastructure, rather than -- so there was judgements 12 made on what is the most economical solution, we would 13 move the utility or could we accommodate it in the 14 design? 15 Just -- what I considered to be normal -- normal 16 working with collaborative approach with everybody. 17 Q. Do you know how the statutory utility companies were 18 brought on board in a way that in one view they weren't 19 before. We've heard about there being delays from 20 utility companies before, saying what they wanted or 21 commenting on plans, but it seems here as though they 22 were also proactive and part of that one team approach. 23 A. Yes. 24 Q. Can you explain how that came about? 25 A. Right. I don't know the contractual arrangement with 160 1 MUDFA, so again you would have to refer that back 2 yourself. But they were on -- I think they were on 3 a cost plus arrangement when we were involved, and 4 I don't know if it was what -- if that was the 5 difference. You would have to look back yourselves and 6 see what the MUDFA contract was with them. I don't 7 know. 8 Q. Thank you. 9 The last thing I wanted to ask you about was in your 10 statement, please, at page 20. In the third line from 11 the top, you say: 12 "The overall performance of the SDS provider was not 13 any better or any worse than other providers I have 14 worked with in the past." 15 It's the next bit: 16 "You had so called experts from TIE who came from 17 a railway environment and that is the first problem on 18 the job. These guys were railway guys. They thought 19 that's true they were coming to build a railway and they 20 were not coming to build a railway. A tram is different 21 from a railway. They were not designers, but they had 22 opinions on what trackform should be." 23 What was the point you were making there? 24 A. Well, that was an answer to your question, I think, 25 wasn't it? But what I'm trying to say there is I think 161 1 the question was, you know, how did you rate the 2 performance of SDS, and the first part there, as 3 designers, they're no worse and no better than other 4 designers I've worked with in the past. 5 tie, again, my opinion, heavy rail guys. The tram 6 part of this -- not insignificant, but it wasn't a tram 7 project. It was an infrastructure project with bridges, 8 roadworks, utilities. Not heavy rail. Heavy rail is 9 a completely different set of skills required to what we 10 were coming to do here, and none of these guys had that, 11 in my opinion. 12 MR MACKENZIE: Thank you, Mr Donaldson. I have no further 13 questions. 14 A. Thank you. 15 Questions by CHAIR OF THE INQUIRY 16 CHAIR OF THE INQUIRY: Could I ask, have you been involved 17 in any other contracts where there had to be multi 18 utility diversions? 19 A. I have, yes. 20 CHAIR OF THE INQUIRY: Can you recall, were these managed 21 differently from this contract? 22 A. One example I can give you on a road job, a design and 23 build road job, where -- in fact it was a DBFO job. So 24 it was even the next stage. It was design build 25 finance, where all the utilities were managed by us 162 1 under our principal contractor. We controlled the 2 utilities, took the risk and managed these utility 3 contractors, and it was successful. 4 CHAIR OF THE INQUIRY: So you took the risk associated 5 with -- 6 A. Them performing and the scope and -- again, you need to 7 know, look at the drawings and actually quantify the 8 scope. 9 The problem with, let's say, the Princes Street or 10 the Haymarket is actually quantifying the utilities 11 scope. The amount of -- you always find uncharted 12 services. But being in town, on-street environment, the 13 amount of uncharted utilities compared with, say, that 14 road job, which is a green field job, the -- the 15 utilities are more likely to be -- how can I say -- 16 known. 17 CHAIR OF THE INQUIRY: So can I ask you then, the example 18 you gave, was that a green field site? 19 A. Yes, it was. 20 CHAIR OF THE INQUIRY: Have you any experience or have you 21 been involved in a multi utility diversion -- 22 A. Not in the scale of that, but we have. Even with my 23 current employer, we do it. We engage utility 24 contractors all the time to divert utilities in 25 roadworks, and we're doing it for CEC at the moment in 163 1 the town. 2 CHAIR OF THE INQUIRY: So do you have any view about the 3 approach here, that the utilities would all be diverted 4 before the infrastructure works? 5 A. That's a debate, isn't it? There's two ways. 6 Me, my personal -- I would -- if we were doing it 7 again, right, I would have the -- forgetting the 8 contractual relationships, but putting my builder's hat 9 on, I would open up a length of the site and expose all 10 the problems concurrently with -- like if -- how -- 11 effectively how we did it post mediation, when we went 12 in, found a problem, together we solved it, rather 13 than -- I think what you're asking is: would you do it 14 in advance or concurrently? I would do it concurrently. 15 CHAIR OF THE INQUIRY: Thank you very much. 16 I don't think anyone has any questions. 17 Well, thank you very much, Mr Donaldson. You're now 18 free to go. You're still technically under your 19 citation, so you could be recalled, but that might not 20 happen. 21 A. Okay, thank you. 22 (The witness withdrew) 164 1 INDEX 2 PAGE 3 DR JOCHEN KEYSBERG (affirmed) ........................1 4 5 Examination by MR MACKENZIE ...................1 6 7 Questions by CHAIR OF THE INQUIRY ............80 8 9 Examination by MR FAIRLEY ....................83 10 11 Examination by MS FORSTER ....................92 12 13 MR JAMES DONALDSON (sworn) ..........................97 14 15 Examination by MR MACKENZIE ..................97 16 17 Questions by CHAIR OF THE INQUIRY ...........162 18 19 20 21 22 23 24 25 166