1 Thursday, 14 December 2017 2 (9.30 am) 3 MR NEIL RENILSON (continued) 4 CHAIR OF THE INQUIRY: Mr Renilson, you're still under oath. 5 A. Understood. 6 CHAIR OF THE INQUIRY: If you just listen to the question 7 and answer it. 8 A. Thank you. 9 Examination by MR LAKE 10 A. Before we commence, my Lord, having reviewed the 11 evidence I gave on the two previous occasions, there is 12 one issue where I told the truth, but I didn't perhaps 13 tell the full truth. Might I be permitted a couple of 14 minutes to complete that? 15 CHAIR OF THE INQUIRY: Yes. 16 A. Thank you. It relates to governance and structure 17 questions. And I was asked about TEL and the general 18 composition of the structure and the governance, and 19 particularly the issue that TEL had no staff or 20 resources. 21 I would explain that to this day Transport Edinburgh 22 has no staff. The tram is up. The tram is functioning. 23 It has some directors. It has directors and those 24 directors, non-executive directors, most of them, do 25 receive some remuneration, but the only paid employees 1 1 it has, as I understand it, is one secretarial support, 2 which is very much the same as it was when you were 3 asking me. 4 So that hasn't changed, and it was never the 5 intention that TEL or -- should be anything other than 6 a holding company. 7 That was the intention, and that's how it's worked 8 out. The reason TEL was created, why it had to be 9 there, was twofold. The first one relates to the 1998 10 Competition Act. Following the 1997 Amsterdam protocol, 11 EU, it was a situation where two companies cannot 12 collude on prices if they are under separate ownership. 13 Lothian Buses, although 91 per cent owned by the City of 14 Edinburgh Council, was not under common ownership with 15 Edinburgh Trams, or whatever form it was going to take. 16 That would have been 100 per cent owned by the City of 17 Edinburgh Council. 18 So in order to deliver an integrated network where 19 bus and trams agreed common fares, common terms and 20 conditions, effectively colluded to provide a common 21 service, they had to be under common ownership. 22 So TEL had to be created, if for no other reason 23 than to allow an integrated transport system to be 24 implemented, or City of Edinburgh Council had to acquire 25 the other 9 per cent of the shareholding, but 2 1 East Lothian, West Lothian, and Midlothian were not 2 minded at all to sell. 3 It was called Transport Edinburgh Limited because 4 really TEL was Lothian Buses under a different name. It 5 was called Transport Edinburgh Limited because 6 Lothian Buses -- City of Edinburgh Council would love to 7 call Lothian Buses at that time Edinburgh buses, but 8 clearly, with the three other shareholders, and all four 9 councils were under Labour control at that time, there 10 was no desire on the part of the Labour Party or the 11 Labour Council in Edinburgh to fall out with the other 12 three surrounding authorities who were, you know, all of 13 the same mind. 14 So Lothian Buses stayed, following the dissolution 15 of Lothian region, as Lothian Buses, whereas City of 16 Edinburgh Council would have liked to call it Edinburgh 17 Buses, but as I have said, didn't. 18 Edinburgh Tram, however, was never going to be 19 Lothian Tram, quite simply from the point of view that 20 as far as City of Edinburgh were concerned, it's ours, 21 it's 100 per cent ours. So we are not giving any 22 recognition to any other body. 23 So Transport Edinburgh was essentially Lothian Buses 24 in a different guise. It was necessary for the 1998 25 Competition Act to allow an integrated operation and it 3 1 was never ever intended to be anything other than 2 a holding company and that is the way it is to this day. 3 Thank you. 4 MR LAKE: Thank you, my Lord. 5 Mr Renilson, when you last were giving evidence, we 6 finished off by talking about the obtaining of approval 7 for the Final Business Case and that aspect of close -- 8 A. Sorry, could you repeat. 9 Q. When you were last giving evidence, you were speaking 10 about obtaining approval of the final business case and 11 the Council decision to proceed in December 2007. 12 A. Yes. 13 Q. What I want to do now is just look what was happening 14 the following month, in January 2008. 15 A. Yes. 16 Q. Do you recall, after the close, a committee being set up 17 that consisted of you, Willie Gallagher and 18 David Mackay? 19 A. Yes. Is this what was essentially -- was it termed the 20 Approvals Committee? 21 Q. Yes. That's the one I'm thinking of. 22 A. This was -- if it's the one I'm thinking about, it was 23 essentially one person each from tie, TEL -- anyway, the 24 objective of it was to formally sign off on behalf of 25 the companies the business plan, and I think that took 4 1 place immediately prior to contract closure. 2 Q. Yes. I just want to ask you a little bit more details 3 about this committee, and I would like to ask you to 4 look at one of the resolutions that established it. It 5 is CEC -- 6 A. I have nothing on the screen. 7 Q. It will come up. CEC01515189. 8 If we look at the upper half of this so we can make 9 it larger to see. The title is -- it's headed "TRAM 10 PROJECT BOARD", and then it has the title, "RESOLUTION 11 OF THE MEMBERS OF THE Tram Project Board AT A MEETING ON 12 23 JANUARY 2008, HELD JOINTLY WITH THE BOARDS OF Tie Ltd 13 AND Transport Edinburgh Limited". Do you recognise this 14 document? 15 A. Not immediately, but -- 16 Q. We will look through the details -- 17 A. If you want me to browse quickly through it, I'll see if 18 that triggers anything. 19 Q. I'll let you read through it. I'm more interested in 20 stuff at the end, but if you look at the whole of it 21 just now. 22 A. Okay, thank you. (Pause) 23 CHAIR OF THE INQUIRY: When you get to the bottom, if you 24 just -- 25 A. Yes, thank you. Yes. 5 1 This isn't exactly what I thought we were talking 2 about. 3 This committee appears to be established to approve 4 final execution of notification to award ITN, the 5 Infraco and related. The one I was thinking of came 6 somewhat later and it was actually, I think, the same 7 people in May, and that was to actually sign the 8 contracts. 9 Yes, I understand this, yes. 10 Q. If we just look at paragraph 4 of this resolution at the 11 moment, this is to approve -- the Tram Project Board 12 decision is simply to approve delegated authority 13 arrangements, to ensure, as it is put, an efficient and 14 properly controlled process was followed through to 15 contractual commitment and during project 16 implementation; do you see that? 17 A. Yes. 18 Q. Then underneath that: 19 "The delegated authority arrangements ..." 20 That is approved is that a committee of the boards 21 of the company, the Tram Project Board and tie Ltd would 22 immediately be formed consisting of Messrs Gallagher, 23 Mackay and Renilson, and you recall there being 24 a committee of the three of you? 25 A. Yes. 6 1 Q. "... to whom authority is delegated to approve final 2 execution by the tie Chairman of Notification to Award, 3 the Infraco Contract Suite, and any necessary related 4 agreements ..." 5 So there's three things you can approve execution 6 of: the Notification to Award, the Infraco Contract 7 Suite and related agreements; do you see that? 8 A. Yes. 9 Q. Was it the case that ultimately this three-man committee 10 did sit in order to approve the execution of the Infraco 11 Contract Suite? 12 A. I cannot bring that immediately to mind. I can 13 definitely clearly remember the meeting in May of the 14 same people, but whether this actually met or whether 15 this was a paper exercise, I don't know. I can't 16 immediately remember. But, I mean, I guess there will 17 be minutes or a record. 18 Q. I will take you to the main minute in a little while. 19 I just want to look at this at the moment to see what 20 the criteria are for giving your approval. There's 21 three given. 1 is that the final terms of the 22 contractual arrangements are within the terms of the 23 Final Business Case, subject to slippage of up to one 24 month in programmed revenue service in 2011, and 2, they 25 unanimously conclude that it is appropriate to do so, 7 1 and 3: 2 "Approval has been received from the Council 3 Chief Executive to proceed to execution of the Infraco 4 Contract Suite." 5 Obviously the third of those is really nothing to do 6 with the three of you. It's to do with a third party; 7 do you agree? 8 A. Yes. 9 Q. In terms of the first of these, though, being satisfied 10 that the terms of the contractual arrangements are 11 within the terms of the Final Business Case, can you 12 recall what work you undertook to satisfy yourself? 13 A. No. I mean, I can't. I can guess at it, but I can't 14 recall. 15 Q. Was this simply a paper exercise? 16 A. I cannot remember, I'm sorry. It may have been. It may 17 not have been. 18 As I say, I can clearly remember subsequent meeting 19 of these three people in a slightly different form. 20 This doesn't ring a bell particularly though. 21 Q. If we come back to this in a moment, but for the moment 22 I would just like to look at the Business Case to see 23 what some of the key elements of it were. Could we have 24 CEC01395434. 25 You will recognise this as being the version 2 of 8 1 the Final Business Case from December 2007. 2 A. Yes. 3 Q. I want to look at a number of parts of it. There will 4 be a degree of overlap. If we could start with page 18. 5 Can we enlarge paragraph 1.77. This is in the summary 6 section. 7 A. Mm-hm. 8 Q. We have "Procurement strategy and risk allocation": 9 "The Procurement Strategy followed by tie responds 10 to feedback from the National Audit Office in 2004 on 11 the effectiveness of light rail schemes. The objectives 12 of the Procurement Strategy are summarised as follows." 13 The first is: 14 "Transfer the design, construction and maintenance 15 performance risks to the private sector." 16 Does that accord with your understanding that one of 17 the key elements of the procurement strategy was that 18 risk be transferred? 19 A. Absolutely. 20 Q. If we go then to page 115 of this, this time could we 21 enlarge paragraph 7.111 at the foot of the page. The 22 more detailed section under the heading, "Benefits and 23 risk allocation", this paragraph says: 24 "The key benefits of the Infraco procurement 25 strategy are primarily through the award of a single 9 1 turnkey fixed price contract and in the novation of the 2 SDS and Tramco contracts and the transfer of risks to 3 the Infraco." 4 Then it goes on to describe the benefits of this. 5 Again, does that accord with your understanding that key 6 elements of the strategy were to be a fixed price 7 contract and once again the transfer of risks? 8 A. Certainly it was the strategy to achieve, to try and 9 achieve a fixed price contract. Yes, that was the 10 strategy. 11 Q. Perhaps just for completeness, if we go to page 166, and 12 enlarge paragraph 10.53. We can see once again 13 reference to fixed price here because the paragraph 14 says: 15 "The contractual terms agreed with the bidders 16 accommodate the phased approach. Fixed prices have been 17 agreed for Phase 1a and an option arrangement has been 18 negotiated which will allow the Council to commit to 19 Phase 1b by March 2009 for commencement of construction 20 in July 2009." 21 So again, there was no doubt this was to be fixed 22 price? 23 A. No. What that's saying to me, they accommodate the 24 phased approach. Fixed prices have been agreed for 25 phase 1a, and throughout there was never any claim that 10 1 it was 100 per cent fixed. Various percentages were 2 used, like 95 and so on, and it was always fully 3 understood that there would be issues outwith the 4 contract that could result in a change to that fixed 5 price; a very obvious one would be ground conditions. 6 For example, Leith Walk, it's fundamentally built on 7 sand. If they had priced it on that and then suddenly 8 came across a load of rock at Pilrig or something, that 9 would be a change to the price. 10 So there clearly were -- it was always understood 11 there were exceptions to it. 12 But as I say, various percentages were bandied 13 around, but 95 was one that was regularly used. So 14 fixed, largely fixed, but never in my mind, or indeed as 15 far as I'm aware in anybody's mind, was it 100 per cent 16 fixed. 17 Q. What was the understanding as to what elements might 18 bring about a change in price? You've referred to 19 ground conditions being an obvious one? 20 A. Ground conditions is a pretty standard one in that sort 21 of contract. 22 Unforeseen circumstances. It's not exactly 23 force majeure, but let's say there was major flooding 24 out at Murrayfield, the Water of Leith decided it was 25 going to flood the work site or whatever. These sort of 11 1 things. 2 Things essentially that hadn't been priced in by the 3 contractor. But this is December 2007. 4 Q. Yes. 5 A. Yes, by that time, you know, it was well understood that 6 MUDFA and SDS, the design, were not on time. 7 Q. Well, that really -- 8 A. But -- sorry -- 9 Q. That comes to be the point. That you knew that MUDFA 10 wasn't on target and the design was behind. 11 A. Correct. 12 Q. Did that not provide an indication that the price wasn't 13 going to be fixed in the way it was intended to be? 14 A. I think -- I assume this -- is there an actual date on 15 this in December? 16 Q. On the Final Business Case? 17 A. The FBC. 18 Q. I think it's 7 December. 19 A. Fine, okay. Clearly it wasn't written on the 6th. This 20 had been written over a number of months and indeed was 21 a rework and update of previous business cases, and yes, 22 there was exactly as you say: look, you know, this is 23 not as fixed as we want it to be. And that resulted, 24 I think, subsequently, 7 December, in Willie and Matthew 25 flying off to meet in Wiesbaden, and that was again an 12 1 attempt to move it further towards fixed. 2 So it wasn't a question that on 7 December, this was 3 released and it was then a question of: well, it's not 4 fixed but don't mention it, we will sit on our hands. 5 All sorts of efforts were made to try and make it more 6 fixed. 7 But yet it was not, over and above the sort of 8 geographical and extra -- and geological terms, yes, 9 there were elements that weren't fixed and everybody was 10 doing what they could to try and fix them. 11 Q. If I could go back to the resolution in relation to the 12 Approvals Committee, that was document CEC01515189. 13 A. Yes. 14 Q. Once again, if you look at the lower half of the screen, 15 you were given three conditions you have to consider 16 there, and the first is whether or not the final terms 17 of the contractual arrangements are within the terms of 18 the Final Business Case. 19 In deciding whether or not you could give approval, 20 how did you judge whether or not it was fixed price? 21 A. As I said, I can't be sure that anything -- whether this 22 was a paper exercise or whether a meeting took place. 23 I just genuinely cannot remember. 24 The final terms of the contractual arrangements are 25 within the terms of the Final Business Case. That was 13 1 certainly the objective. 2 I'm very happy to sit here and say at that time 3 that's what we were trying to do, which is why there was 4 various fairly intense activities taking place in the 5 first five months of 2008 to try and ensure it as far as 6 possible did. 7 That's all I can say. But yes, technically, there 8 may well be a situation where, you know, that very stark 9 absolute commitment was not met. 10 Q. Looking -- apart from the question of the fixed, the 11 transfer of risks? 12 A. Yes. 13 Q. What did you, the Approvals Committee, do to ensure 14 there had been transfer of risk, and in particular, did 15 you have in mind which risks were to be transferred? 16 A. The objective clearly was to transfer all risk, but that 17 was not going to be possible. 18 I think the largest single concern was around the 19 design, and that, for various reasons, was just really 20 going nowhere. Not going nowhere, but not proceeding at 21 the rate necessary to achieve concluded design by May. 22 That was pretty obvious. 23 So the objective was to try and get that design risk 24 novated across to the consortium on signature. 25 I wasn't closely involved in that personally, but 14 1 I was well aware of the principles of what was going on, 2 and it was becoming -- it was becoming fairly clear that 3 BBS, particularly Bilfinger, Siemens weren't really an 4 issue, but Bilfinger were pretty uncomfortable about 5 taking on all the design risk. Hence, among other 6 things, Wiesbaden. 7 Q. You talked about the novation of design. 8 A. Yes. 9 Q. Had that always been part of the procurement or the 10 contract strategy or was that put in simply because the 11 design was lagging? 12 A. No. I hesitate to use the word "always", but it had 13 certainly been the -- certainly been the strategy long 14 before it became obvious that MUDFA and SDS were not 15 going to make it. It had always been -- by this rather 16 cockeyed system that had been adopted on day 1, it was 17 always intended that the design and -- yes, the SDS and 18 MUDFA would have been novated into Infraco. I don't 19 think it was originally intended that Tramco be novated 20 into the -- or be incorporated in the consortium. 21 I think that did come later, but certainly very early 22 on. 23 Q. So what was the relationship between the novation of the 24 design contract on the one hand and the transfer of 25 design risk on the other? 15 1 A. Effectively that when that -- my understanding, as 2 I say, this wasn't my specialist area. But my 3 understanding was that if or as and when the novation 4 took place, the agreed design risk would transfer to 5 BBS, and BBS's price included not just the cost of 6 building the thing, but a premium, a risk premium, for 7 taking on these undetermined design issues, but it was 8 never expected -- it was never expected that they would 9 take on all the design risk. Because in the same way as 10 you had issues like ground conditions, flooding, 11 whatever it might be, you also had the situation where 12 CEC were deemed to be a major blockage in the design 13 approvals system. 14 Again, not -- not something I was directly involved 15 in personally, but I was well aware through board 16 meetings and Project Board meetings what the mood was, 17 and the mood was we send, you know, the designers send 18 completed designs off to CEC and they don't come back, 19 and they don't come back, and we chase them and we get 20 them far, far too late, and that was slowing the whole 21 thing down. 22 The second issue was that CEC were rejecting designs 23 because they didn't meet their aesthetic requirements, 24 and BBS were not prepared to take on at the risk of CEC 25 not performing or being recalcitrant. 16 1 Q. I just want to clarify -- we've been talking about the 2 transfer of design risk, exactly what we mean. It could 3 mean on the one hand they were taking on the risk of 4 completing the designs. That's actually employing 5 designers to produce the drawings and things, or it 6 could be that they would take on the responsibility of 7 building the tram according to whatever the final design 8 turned out to be. 9 A. My understanding is the former. That, for example, such 10 and such a bridge has been roughly designed in outline. 11 It's not the design has not been fully completed. And 12 on novation, and when they take on the design risk, 13 that -- at that point, BBS will become -- they will take 14 the SDS team and staff into -- into effectively their 15 body, and they will be responsible for finishing off the 16 design of that bridge, designing it in detail, getting 17 permissions, et cetera, et cetera. 18 Q. If the final design costs more to construct than the 19 design that was available, say, in December 2007 -- 20 A. Yes. 21 Q. -- what was the arrangement for who was going to pay for 22 the increase in cost of that risk? 23 A. I cannot quote contractually what the arrangement was. 24 I can give you my understanding. 25 Q. What was your understanding of the intention? 17 1 A. My understanding was that if the reason that the item of 2 design, let's use the bridge at Gogar, if the Gogar 3 bridge was half designed at the time of novation, and in 4 completing the design it was going to cost more to build 5 than they had included in their prices, that was 6 their -- they were -- that was their problem. They were 7 carrying that cost. If, however, it was because 8 Riccardo Marini had decided that it was the wrong shade 9 of concrete or the wrong shape and they had to go away 10 and redesign it, that was very much CEC/tie's costs. 11 Q. I just want to be clear. You did understand that if the 12 completion of the design pushed the cost up just from -- 13 A. Yes. 14 Q. -- not Mr Marini's input, but just completion of the 15 engineering process -- 16 A. If it was nothing to do with an outside factor such as 17 CEC or related people, then, yes, that was Bilfinger's 18 responsibility, was my understanding. 19 Q. Right. In carrying out the work of the Approvals 20 Committee, can you recall what steps you took to ensure 21 that risk had been passed to the contractors? 22 A. Well, not specifically in terms of carrying out the -- 23 the Approvals Committee, because I say, I can't be sure 24 if it ever actually happened. But in general, just as 25 in terms of one's responsibilities for the project 18 1 overall, it was -- I'm not a contract lawyer, but it was 2 down to taking advice from the -- listening to and 3 taking advice from those people who were specifically 4 employed to cover that issue, and to advise on that 5 issue. By that I mean fundamentally two or three groups 6 of people. The tie specialists in design, and tie's 7 legal, DLA, Andrew Fitchie, et cetera, and if they were 8 saying: yes, you know, the design risk passes; then I'm 9 not going to question Fitchie. 10 Q. Were you aware of any quality assurance procedures in 11 place in relation to the terms of the contract? 12 A. Sorry, could you expand. 13 Q. Were you aware of any quality assurance that had been 14 put in place to check the terms of the Infraco contract? 15 A. When you say quality assurance, do you mean from a legal 16 point of view? 17 Q. Legal and general drafting? 18 A. Well, yes. 19 Q. Legal and commercial? 20 A. That basically was the lawyer. That was -- the -- 21 I mean, Andrew and his people were involved in drawing 22 up the contracts. They'd produced them. They allegedly 23 knew what they were doing, and had experience of similar 24 work. 25 So I essentially, because they'd produced it, yes, 19 1 one assumed they knew what they were doing. 2 In terms of independent review, I'm unaware of any 3 independent review being undertaken into the contract 4 accuracy or validity. Although with hindsight, clearly 5 that would have been a good idea. 6 Q. I'll come back to that in a little while because it's 7 something you deal with in your statement. We have been 8 looking at the first of these numbered paragraphs at the 9 foot of the page in the resolution? 10 A. Yes. 11 Q. The second one is that they unanimously, that's the 12 committee unanimously conclude that it is appropriate to 13 do so, to conclude the contract? 14 A. Yes. 15 Q. What factors did you take into mind there? Was it 16 simply that all the other formal process were in place, 17 or did you stop to consider commercial, legal, 18 engineering aspects? 19 A. I would have -- well, I would, and indeed did later, 20 take the view there that the key -- the key point about 21 2 was unanimously, that if David and Willie and I were 22 all in agreement, fine. If we weren't, then there was 23 an issue. 24 So if we all thought it was -- it's a unanimity. 25 This wasn't going to be a majority decision. It had to 20 1 be unanimous. 2 Q. Were you exercising any discretion or judgement other 3 than that, the terms of the contract were within the 4 terms of the Final Business Case? Or was that it? 5 A. I don't really understand what you're -- 6 Q. You had to make a decision as to whether or not to 7 approve final execution? 8 A. Yes. 9 Q. What I'm interested to know is what criteria you applied 10 in your mind to make that decision? Was it simply -- 11 just hold on a moment. 12 CHAIR OF THE INQUIRY: Just carry on. 13 MR LAKE: I'm interested in what the criteria was. Was the 14 thing that you turned your mind to whether or not the 15 contract was in the final terms of the Business Case, or 16 was it that plus other things? 17 A. I would have said it was that plus other things. 18 Q. What I'm interested in is: what were the other things? 19 A. Well, when I say other things, I'm not entirely sure 20 whether these sort of things -- without re-reading the 21 Business Case, which I haven't done, and the three 22 guiding principles were: can it be done for 545; will 23 it, once it's operational, operate at break even or 24 better; and will it have a BCR of 1 or greater? 25 Q. Those are all matters within the Business Case? 21 1 A. And they really were the key things that I was -- and 2 really points 2 and 3 were the key things that I was 3 absolutely focused on. 4 1 was really a bit -- you know, can it be done for 5 545? I'm not that closely involved with the contracts 6 with the suppliers. If that's what everybody is saying, 7 they are far more skilled than I. 8 My skill and focus is on what's it going to be like 9 once it's switched on. Is it going to lose money? Is 10 it going to, you know -- or is it -- whatever. 11 Q. Just for completeness, I would like to look at two 12 further documents. The first is CEC01515190. The first 13 document we looked at had the heading: Tram Project 14 Board had set up the committee. 15 Here we can see that it's headed up "tie LIMITED", and 16 again, it's a resolution of the 23 January. If we 17 scroll to the foot of the page, we can see it's the same 18 delegated authority put in place. It will be the 19 three-man committee and it's the same terms of 20 reference. Do you see that? 21 A. Yes. 22 Q. Finally, if we go to another document, which is 23 CEC01515192, to complete the set, this time we see the 24 document is headed "TRANSPORT EDINBURGH LIMITED". Again 25 it's a resolution of 23 January, and if we scroll down, 22 1 it's the same delegated authority arrangement for the 2 three-man committee with the same terms of reference? 3 A. Might I ask, are these effectively the same documents 4 with different company names on the top? It appears to 5 me they are. 6 Q. In effect, that's what they look like, isn't it? 7 A. In which case I think that possibly lends weight to -- 8 no, I don't remember meetings taking place and that's 9 possibly why. This was a -- this is a governance issue. 10 We have to have these things in place. You know. 11 Because they're all the same time, the same date, the 12 same words, just change the name at the top. I'm not 13 saying that was the case, but that would lend weight to 14 my lack of recollection about it actually happening. 15 Q. We have seen all three bodies, the Tram Project Board, 16 tie and TEL, joining to set up this committee, a joint 17 committee of these three entities. Do you know why it 18 was all three had to join in, tie, TEL and Tram Project 19 Board? 20 A. Well, clearly tie had to because they were the ones who 21 were actually going to sign -- they had the authority to 22 sign the contracts. They were a given. 23 Q. Yes. 24 A. Because under the governance arrangements, tie 25 theoretically was reporting through or operated with 23 1 powers delegated by TEL, then clearly TEL also had to be 2 involved. 3 Why Tram Project Board? Probably because it was the 4 body, if I recollect correctly, that had power delegated 5 to it from CEC. 6 So I can certainly see why tie and TEL had to be 7 there. 8 Q. Might this have been a reflection on the fact it really 9 wasn't clear at that time which of these bodies was 10 ultimately responsible for taking the decision to go? 11 A. I understand where you're coming from. It was quite 12 clear that the mechanics were that tie were the ones 13 entering into the legal agreement. Equally, it was well 14 understood by most that TEL were the people -- TEL were 15 the people who were going to carry the -- who were going 16 to carry this thing forward. tie were just the builder. 17 Five years' time, tie go. Next 40 years, TEL have it. 18 So they have to be closely involved. 19 Tram Project Board just because that was where the 20 real decisions were taken. That was where -- yes, that 21 was -- that was really the body that made it happen. 22 I don't -- a lot -- you know, we're going back perhaps 23 to the very first thing I said. I didn't have any 24 confusion as to who was where in terms of 25 responsibilities. 24 1 If we were starting with a blank sheet of paper, we 2 wouldn't have had that structure, but when this first 3 commenced there was no concept of TEL. It was to be 4 competitive. It was to be a re-run of CERT, the tram 5 was to be run by CEC, possibly through a contractor, as 6 a competitive operation. 7 We didn't start with a blank sheet of paper. What 8 then happened was I and the Chairman and the rest of the 9 Board lobbied every politician, councillor, MP, MSP, 10 even MEPs, everyone we could get our hands on, that this 11 was crazy, this was crackers. And very quickly it was 12 changed to integration, and from that -- from that point 13 on, TEL had to be there. But tie were so far down the 14 parliamentary powers route by then that they couldn't 15 just say: all right, we got this wrong, we are going to 16 have one body and we will incorporate the two into one, 17 so it carried on. 18 And it kind of developed by accident. 19 Q. When you say: I and every other members of the Board, 20 lobbied every politician, et cetera; was that the Board 21 of Lothian Buses? 22 A. Yes. 23 Q. So this was Lothian Buses -- 24 A. TEL did not exist at that time. 25 Q. So Lothian Buses resisted having the trams as an entity 25 1 in competition with the bus service? 2 A. Yes. We wanted an integrated network, and to be fair, 3 once it was explained to most of the politicians that 4 this was not what they were going to get, they were not 5 at all amused. That's what they wanted as well. 6 Q. There was initially some -- I hate to use the word 7 hostility, but some opposition by Lothian Buses towards 8 the tram and the project, because it was going to be 9 running in competition with them? 10 A. No, you're right, hostility, yes. My job, and the job 11 of the directors, was to protect the interests of the 12 company. We went through this last time. Therefore, my 13 job was to protect -- my primary function under the 14 Companies Act was to protect Lothian Buses. We already 15 had a run-in with the Council over CERT. It looked like 16 they were going to re-run it. We'd had another run-in 17 with the Council over concessionary fares, but which you 18 may or may not be aware of. I know Mr Martin is. 19 And yet again I found myself to discharge my duties 20 as a Director of Lothian Buses, and the same thing went 21 for the Chairman and the other directors, we had to -- 22 we had to take issue with something that was being 23 proposed by our major shareholder, and we did. And we 24 lobbied as hard as we could, and it didn't take long. 25 We were kind of pushing at an open door. Once the 26 1 politicians realised that they hadn't really been 2 explained properly, and this was actually going to be 3 a competitive thing against Lothian Buses, it was: we 4 don't want that. 5 Q. You said that the effect of that was that the tram was 6 transferred into TEL, and TEL was in essence 7 Lothian Buses? 8 A. TEL -- TEL was the body that was going to run bus and 9 tram. With 650 buses and 20 trams, clearly it made 10 sense, if you're going to integrate it. So TEL, I said 11 in all but name, TEL was going to be the body going 12 forward. 96 per cent of its passengers would travel on 13 buses and 4 per cent would travel on tram. 14 Q. And once that transfer was completed, Lothian Buses were 15 content with the situation? 16 A. Absolutely. Not only were we content, we were actually 17 very happy to be getting GBP500 million of investment 18 into transport. One of the problems I had, though, was 19 that having its -- you never get a second chance to make 20 a first impression, and having spent six months or maybe 21 nine months, you know, doing our damnedest to make this 22 not happen in that form, when it changed the other way, 23 Lothian Buses were still tarred with, you know, the anti 24 thing. 25 So that first impression, those first nine months 27 1 when we had to do our level best to stop it happening in 2 a competitive format, coloured an awful lot of people's 3 view for an awful long time. 4 Q. Can we look at another document now, please. It's 5 reference CEC01289240. 6 If we just look at the whole page for the moment, we 7 can see the heading. It's the meeting of the tie and 8 TEL Approvals Committee to confirm the authority to 9 proceed with completion of Infraco Contract Suite. 10 It has a date of 13 May 2008. And the three people 11 attending are yourself, Willie Gallagher and 12 David Mackay? 13 A. Yes. 14 Q. So this was a meeting of the Approvals Committee that we 15 just saw established? 16 A. Correct, this is the one that I have clear recollection 17 of. 18 Q. Did that committee meet periodically or at all between 19 being established in January and this May meeting? 20 A. I could not say yes or no. All I can say is I had no 21 recollection of it meeting, but that's not to say it did 22 or it didn't. This is the meeting I did remember. 23 Q. Could we enlarge the upper half of the screen now for 24 readability. 25 Can you recall, was this minute of meeting prepared 28 1 in advance of the actual meeting taking place to guide 2 what you were supposed to do? 3 A. I can't answer that. What I can say is I think if you 4 were to dial up 79774, that would be very illuminating 5 on this issue. 6 Q. 79 -- 7 A. 79774 CEC. 8 Q. I might do that a little bit later. I want to stick 9 with this for the moment. 10 A. Sure. 11 Q. You can see the introduction here that is -- 12 A. Yes. 13 Q. The committee had been established on 23 January as 14 a means of ensuring the integrity of the governance 15 process? 16 A. Yes. 17 Q. Controlling the approval. Now, that chimes slightly 18 with an answer you gave earlier that this was really all 19 a governance issue. Is that what it was, or was there 20 actual substance to the consideration you were giving? 21 A. Now, there was substance at this meeting on the 13th, 22 and there was questioning done. 23 Q. There was what? 24 A. Questions were asked. 25 Q. Of whom? 29 1 A. Well, if you -- I say, I realise this is, you know, it's 2 you're asking the question, but if you look at 79774. 3 It will give you some answers. Because it's minutes of 4 the meeting, I think, or the agenda or it's a different 5 version of something relating to this meeting. 6 Q. We will look at that document then. Can we have 7 CEC00079774. 8 A. Yes. I just hope I've got the right number remembered. 9 That's it. 10 Q. We can see, this is an agenda for a Tram Project Board 11 meeting that was also to take place, we can see from the 12 date, on 13 May 2008? 13 A. Okay. Can I first of all point out that that funny 14 squiggle mark in the top corner is my filing mark. This 15 is one of my papers. I have ringed the date and time. 16 Now, unfortunately -- it seems to be the only one of 17 mine that I have come across, although I haven't checked 18 them all. If we can scroll down. 19 Q. You want to look at further pages? 20 A. Sorry, yes, next page. 21 Q. If we go to the second page, we can see this is a paper 22 relating to finalisation of the SDS novation? 23 A. If you look at the top there, you will see I have 24 written in the margin, and this is how I know it wasn't 25 a paper exercise. Because I remember the meeting 30 1 anyway. 2 545, 512, 33 within 545, 31 R&C. 3 So what I have done there is I have taken 512 being 4 the price of 545, the budget, which means that there's 5 33 within the 54 -- within the 545, and within the 512, 6 there's 31 for risk and contingency, giving 64 million 7 of what you might term cover for the unexpected or the 8 unbudgeted. 9 Now, that represented, if I remember correctly, 10 14 per cent at that time. I thought, well, that seems 11 reasonable. In fact, we now know that 2 in 150 per cent 12 would have been inadequate, but at that time to me 13 inexperienced, but clearly at that meeting I had asked 14 questions and got those figures and done the wee sum. 15 Q. That's a question of what was termed the headroom and 16 the risk allowance? 17 A. Yes. 18 Q. What I'm interested in is the three-man committee -- 19 A. Yes. 20 Q. -- and the exercise it had to do of considering whether 21 or not something was in the Business Case. We can do it 22 within this. 23 If you go to page 4, we find the same meeting that 24 we were looking at a minute ago? 25 A. Yes. 31 1 Q. Now, in terms of this committee meeting, not the Tram 2 Project Board, this committee, was that simply 3 a governance process, or was it a substantive discussion 4 of whether or not the criteria for approval were met? 5 A. Can I talk you through the 13 May? There was a meeting 6 of -- 7 CHAIR OF THE INQUIRY: Well, before doing, that can you 8 answer the question? 9 A. I don't know, is the simple answer as to whether -- 10 CHAIR OF THE INQUIRY: That's what the answer should be. If 11 you don't know, say you don't know. 12 A. I don't know, but I can put that into context, if I may. 13 13 May, there was a meeting of P and S -- sorry, 14 policy and strategy in the City Council in the morning. 15 There was then a chain of meetings to take place at 16 Citypoint. There was a meeting of the Tram Project 17 Board. There was a meeting of -- there were various 18 meetings. This -- this was one of them. And they were 19 kind of scheduled at half hourly intervals, and it 20 was -- what's the word -- yes, orchestrated, 21 choreographed. It had been choreographed in advance 22 that on the due day, the Council will do this in the 23 morning, tie will do that, TEL will do that, the Project 24 Approvals Board will do that, and then we will go round 25 to Rutland Square and start signing. So, no, no serious 32 1 debate could have taken place, although clearly I had 2 asked questions as per my handwritten notes, but it was 3 choreographed series of meetings. 4 Q. That's what -- 5 A. And they were not detailed discussions. But some 6 discussion took place. 7 Q. Thank you for that. Understanding that they were 8 choreographed, and therefore there was not time for 9 detailed consideration to take place on the 13th, when 10 did the detailed work of the Approvals Committee, the 11 three-man committee, take place? 12 A. Clearly some time between its establishment on -- in the 13 middle of January, early January and then. 14 Q. How did that committee go about doing its work? Did you 15 sit with the three of you? Did you do it individually? 16 A. No. Well, I cannot remember, but the three of us, two 17 of us shared an office and the third guy was next door. 18 We were in and out of each other's offices all the time. 19 You know: what do you think about this? Okay. You 20 know, we didn't formally say: we will book a meeting 21 room for two hours and go and discuss this. It was just 22 part of everything, of the general high tension activity 23 that was in place in the run-up to contract close. 24 So no, you know, I can't say it happened at 2.00 pm 25 on such and such a date in such and such a room. 33 1 Q. I'm less interested in the time, but understanding was 2 there a time when the three of you came together and 3 applied your minds to the question of: does this 4 contract come within the terms of the Final Business 5 Case? 6 A. All I can say is almost certainly. That's all. I'm 7 sorry. I cannot remember something as specific as that 8 from ten years ago. 9 Q. If we can enlarge this document, so it's a bit more 10 readable and look under the heading, "Infraco Contract", 11 we can see that: 12 "The Committee and each member individually noted 13 that adequate information had been provided on which to 14 competently proceed." 15 If I pause there, were you quite happy then with all 16 the information being provided and you considered you 17 had enough on which to make a decision? By the time you 18 got to the 13th? 19 A. Yes. Now, I have to qualify that and say yes, I was 20 happy to make the decision, and yes, I was happy that 21 I had all the information that was available. I'm not 22 necessarily saying that all the information that one 23 might have liked was available. 24 Q. Did you have in mind any information that you would have 25 liked that you did not have? 34 1 A. I'm thinking particularly around some of the -- an awful 2 lot of people got awfully hung up on SDS, but I actually 3 got very, very worked up about MUDFA. But I wasn't that 4 comfortable with the progress and where we were and more 5 importantly, where the future progress would be on 6 MUDFA. 7 But it was swimming in treacle. 8 Q. What was swimming in treacle? 9 A. Trying to get the information about MUDFA, how things 10 were, what the projected timescale was, et cetera. 11 I don't think the contractor actually knew himself. 12 Q. Were you aware by then that one of the Pricing 13 Assumptions contained within the Infraco contract that 14 was about to be signed was that the MUDFA works would be 15 completed by the time the Infraco works got under way? 16 A. Yes. 17 Q. You knew that the MUDFA works weren't going to be 18 completed? 19 A. Yes. 20 Q. Was that a concern that this was going to generate 21 a liability? 22 A. It was a big concern, yes, and I remember it was 23 discussed as well that there might well be mitigation 24 that could be undertaken whereby the delay or -- 25 mitigation, that's a posh word, we could do something 35 1 else to either reduce or negate the impact of that by 2 getting -- getting Infraco working in areas where MUDFA 3 had been completed, or indeed where there was no MUDFA 4 required on the off-road sections and so on. 5 Q. Okay, so the MUDFA wasn't complete -- MUDFA works 6 weren't completed on time, that was immediately 7 a departure from the strategy in the Final Business 8 Case? 9 A. Agreed. 10 Q. If it was going to give rise to additional costs because 11 it would generate a deviation from a Pricing Assumption, 12 that too could undermine the fixed cost aspect of the 13 strategy? 14 A. We are getting into an area in terms of the cost. My 15 understanding was -- it may be faulty -- 16 CHAIR OF THE INQUIRY: Before you go into your 17 understanding, can you apply your mind to the question, 18 please? 19 A. Which was? 20 CHAIR OF THE INQUIRY: Which was: if it was going to give 21 rise to additional costs because it would generate 22 a deviation from a Pricing Assumption, that too could 23 undermine the fixed cost aspect of the strategy. 24 A. The answer is: I was not convinced that it would produce 25 a deviation from the agreed price. 36 1 MR LAKE: When you say you weren't convinced that it would, 2 does that suggest you thought it might and you weren't 3 sure? 4 A. No, I was being told there were ways round it. 5 Q. By whom? 6 A. The -- those responsible for the programme. The 7 Susan Clarks, the Steven Bells, those sort of people, 8 that they could manage this by getting the MUDFA 9 contractor to do other things -- getting Bilfinger to do 10 other things while MUDFA finished off the other stuff. 11 Q. Was this possibility of the -- this departure from the 12 strategy and the possibility of additional costs 13 something that you discussed with Mr Mackay and 14 Mr Gallagher? 15 A. Oh, yes. I mean, it was discussed -- it wasn't just 16 discussed among the three of us. It was discussed at 17 Tram Project Board and so on. 18 Q. I'm particularly thinking in the context of the 19 Approvals Committee, the three of you having to decide: 20 should this contract be executed? 21 A. Not that I can recollect, but it was discussed widely 22 within tie at the time, and TPB and TEL. But I can't 23 specifically remember a special meeting in the context 24 of this sub-committee to discuss that issue. 25 And I doubt it happened. 37 1 Q. Did the three of you have any special meeting as this 2 sub-committee to consider the effect that the delayed 3 design might have on the prices under the contract? 4 A. You can -- you can put ditto to my last question. It 5 was -- it was widely discussed and talked about at 6 all -- almost all levels throughout tie, CEC, Tram 7 Project Board. 8 Q. Was there a specific time that either you individually 9 or the three members of the Approvals Committee 10 collectively applied minds to the question: does this 11 contract come within the terms of the Final Business 12 Case? 13 A. As three of us in a separate meeting, as we were talking 14 about earlier, no, I can't bring that to mind. I cannot 15 recollect it. I think it's unlikely because we were all 16 involved in all these issues regularly. 17 Q. Was there a time that you individually sat and applied 18 your mind to the very question: does this question fall 19 within the terms of the Final Business Case? 20 A. Probably not. 21 Q. If we scroll down here -- sorry, now on the top of the 22 screen, pardon me. After the reference to information, 23 it says: 24 "In particular, the terms of the Infraco Contract 25 Suite and all key related information had been set out 38 1 in successive versions of ..." 2 We see: 3 "The Close Report prepared by tie Limited. 4 A letter from DLA providing an opinion on the legal 5 competence of the Infraco Contract Suite and including 6 a comprehensive risk matrix. 7 Supporting papers prepared by tie Limited addressing: 8 Detailed Infraco Contract Suite terms and 9 conditions. 10 Procurement process and risk of challenge. 11 The final deal terms and relationship to value for 12 money and the risk of challenge." 13 Now, the Inquiry has already seen these various 14 documents. Were you aware of what they are referring to 15 or would you prefer that I show you what they are? 16 A. If you just give me a minute to re-read it, thank you. 17 (Pause) 18 Yes, right. I now -- I have now read that, and 19 absorbed it. The question is ...? 20 Q. Do you recognise which documents it's referring to? 21 A. The close report prepared -- close report, sorry, 22 prepared by tie Ltd, yes, I'm conscious that there was 23 one and that I read it. 24 Letter from DLA, I'm sure there was one. I wouldn't 25 have read it, but, you know, as long as the letter from 39 1 DLA said you're good to go, I would have taken that at 2 face value. 3 Supporting papers prepared by tie, if I -- I would 4 not have read detailed Infraco Contract Suite and terms 5 and conditions, no. I would not. I would have read -- 6 had I been provided, a summary, an executive summary. 7 Q. With the exception of obviously the DLA report, these 8 were documents prepared by tie? 9 A. Yes. 10 Q. So essentially, having to decide whether or not to enter 11 into the contract, you were entirely dependent on 12 information provided by tie? 13 A. No. 14 Q. Did you -- 15 A. Very largely, very largely. Some of this was TEL stuff. 16 The thing about, say, the risk of challenge, I'm 17 assuming that's risk of challenge from unsuccessful 18 bidders. So in that case TEL handled the Tramco 19 procurement. So that was something that I'd dealt with, 20 but it's a very minor matter in the context of the 21 whole. But by and large, you're right, yes. By and 22 large, tie. 23 Q. If I bring it to this: in deciding whether or not the 24 contract did fall within the Business Case, there was no 25 independent scrutiny provided. You relied upon the 40 1 reports as to that provided by tie and TEL? 2 A. Correct. 3 Q. Do you think it might have been preferable to have some 4 independent scrutiny of this issue at that time? 5 A. With hindsight, yes. 6 Q. Were you given opportunity to question the various 7 people involved in production of these various 8 documents? 9 A. Oh, yes. 10 Q. Go behind them? 11 A. Yes. 12 Q. Did you? 13 A. I would have done on certain issues. I almost certainly 14 did not, for example, go through the entire contract 15 suite. But I would have questioned issues related to 16 them or raised by them. 17 Q. If we look at the close report that's referred to there, 18 if we see document CEC01338853. 19 This, we can see from the heading, is the report on 20 the terms of financial close or the close report. 21 If we go down to page 7 within this, and look at the 22 upper half of the page, we can see, although it's under 23 the heading "Tramco relationship", the second paragraph 24 there deals with an SDS issue, by saying: 25 "Programme version V31 will be contained within the 41 1 SDS novation agreement. Any variance between V26 and 2 V31 which has an impact on the BBS programme will be 3 dealt with through the contract change process." 4 A. Yes. 5 Q. Was there enquiry made as to what the effect of that 6 might be on the Pricing Assumptions and therefore the 7 cost that would be payable? 8 A. Sorry, can you repeat the last part of the question? 9 Q. Did you make any enquiries as to what the effect of that 10 would be on the contract change mechanism and the price 11 payable? 12 A. Yes, very much so. If this is what I think it is, 13 I think this is -- because it was an ongoing project, 14 and things like MUDFA and SDS were not concluded at the 15 time of contract close, at some point we had to draw 16 a line in the sand and say: we are going to do the 17 contracts on the basis of where we are today, and that 18 would be from reading this, version 26. 19 By the time we actually got to contract close, 20 reading this, I assume we were now on version 31. 21 So in that intervening period, various issues had 22 been finalised or new ones appeared and so on. So there 23 would -- there was -- I can't remember the detail of 24 this, but there certainly was discussions as to, right, 25 how is it different today to how it was six weeks ago or 42 1 whenever that line V26 was drawn in the sand? 2 Some of it was positive, some of it was things that 3 had now been bottomed out and cleared, and other ones 4 were less positive. 5 Q. Had you formed a view as to the actual extent of the 6 liability that might arise for these changes? 7 A. Purely on those V26 through V31 changes, my recollection 8 is that it was not material -- the net effect was not 9 material in the context of the contract sums. 10 Q. Looking at the DLA letter that's referred to, could we 11 see CEC01033532. 12 We can see this is a letter on DLA headed paper, 13 addressed to both Gill Lindsay at the Council and 14 Willie Gallagher at tie. 15 I should just say it's dated 12 May 2008. 16 Could you look, please, at page 3, and the heading, 17 "RISK", and the two paragraphs underneath it. 18 A. Yes. 19 Q. You see: 20 "Following on from our letter of 12 March we would 21 observe that delay caused by SDS design production and 22 CEC consenting process has resulted in BBS requiring 23 contractual protection and a set of assumptions 24 surrounding programme and pricing. 25 tie are prepared for the BBS request for an 43 1 immediate contractual variation to accommodate a new 2 construction programme needed as a consequence of the 3 SDS Consents Programme which will eventuate, as well as 4 for the management of contractual Notified Departures 5 when (and if) any of the programme related pricing 6 assumptions fall." 7 That seems to be referring to the same matter of the 8 programming? 9 A. Yes. 10 Q. That we've just been talking about? 11 A. Yes, exactly. That would be my read of it. 12 Q. In relation to the question of what changes there might 13 be to the design that would lead to claims for increase 14 in price, design variation generally, did you have any 15 view on to what extent that might give rise to liability 16 or claims for additional cost? 17 A. Well, he covers two issues here. Or two causes. 18 One of which is CEC consenting process, and I was -- 19 as I have mentioned earlier, that was 100 per cent our, 20 tie, City Council's risk. If the planners weren't 21 turning the stuff round or whatever, not granting 22 things, then that was our cost. No doubt about that. 23 And I have no idea -- I had no feeling at all for 24 what that might be. Quite simply because you can't 25 predict which side of bed they're going to get out on 44 1 that day when they look at the design for something. 2 You know, it's not -- it's an intangible. 3 Planners, it's just whatever they feel like. 4 Q. In the course -- 5 A. So we can leave that to one side. I was fully expecting 6 that, and I had no way of putting a value on that. 7 Q. In the course of the committee work of ensuring that the 8 goals of risk transfer had been achieved, what did you 9 do, either individually or as the three of you together, 10 to satisfy yourself that risks had been transferred 11 where appropriate? 12 A. Specifically, as a committee, as I've said, of three 13 people, I have no recollection of that happening 14 other -- I have no recollection of there being formal 15 meetings of that committee, other than the one that we 16 saw on 79774. 17 Q. As an individual, what did you do to satisfy yourself 18 that risks had been effectively transferred? 19 A. Participated in the various discussions and meetings, be 20 they tie Board, TEL Board, Tram Project Board, asked 21 questions, when there was something that bothered me, 22 I would track down the person who I thought most likely 23 to give me an answer and ask them. 24 Q. In that regard, if you could look at your statement, 25 please? 45 1 A. Yes. 2 Q. And page 78 of that. Paragraph 250 at the foot of the 3 page. 4 A. Yes. 5 Q. You say there: 6 "At the time of contract close, I was given to 7 understand that BBS and tie had agreed that they both 8 bore risks and liabilities arising from incomplete 9 design and outstanding statutory approvals and consents. 10 But with BBS taking on the lion's share of the risk, ie 11 there was still some potential liability to remain with 12 tie but a minor share. While I might have had my doubts 13 that this was the case, I had no reason to go and start 14 investigating. This was not my department." 15 A. Yes. 16 Q. Now, in terms of the some things rested with tie, did 17 you have in mind the regulatory approvals? 18 A. That was one. Yes, the regulatory approvals, and as 19 I mentioned earlier, unforeseen ground conditions or, 20 you know, weather or whatever. 21 Q. This is specifically in relation to incomplete design? 22 A. In relation to incomplete design, my understanding at 23 that time was that that risk passed to BBS, barring 24 those exceptions I have just mentioned. 25 Q. The exception being ground conditions? 46 1 A. And CEC planning issues, and granting approvals. 2 Q. The last few lines of this, you say: you might have had 3 your doubts that this was the case, but you had no 4 reason to start investigating. Did you have doubts as 5 to whether or not the risk had been transferred? 6 A. No. That's not what I'm actually referring to. What 7 I'm referring to was BBS taking on the lion's share of 8 the risk. 9 Q. Did you doubt that? 10 A. I just -- already I was beginning to get the impression, 11 the feeling, that BBS were -- I'm just trying to find an 12 appropriate form of words. That BBS were pretty sharp 13 or perhaps maybe, I think, a bit slippery. I'm not 14 intending to be critical by saying that, you know, these 15 were -- this was a pretty -- this was whatever it was, 16 the fifth biggest civil engineering firm in Europe. 17 They don't get to be that size without knowing which 18 side their bread is buttered on, and I was just wary 19 that these guys were probably a fair bit cleverer than 20 us and our guys were, and I was just always a bit ... 21 umm, I'm not too sure, but it was no more than that. 22 I would defer to DLA. 23 Q. You say here you had no reason to go and start 24 investigating. 25 A. Reason is the wrong word. I had no -- I had no ability, 47 1 or it wasn't appropriate for me to then go and 2 say: I want to open up this whole issue of this element 3 of the contract with BBS. That was very much a tie 4 responsibility, and if they were saying and DLA were 5 saying it's done, then, you know, it's not for the 6 outsider who has no skills in that area to go and start 7 questioning. 8 Q. Was that not precisely your role on the Approvals 9 Committee, to question, and if you had doubts, perhaps 10 to require someone else to look at it, or to get further 11 assurance? 12 A. The problem is I wouldn't have understood what I was 13 told anyway, not being a lawyer. You know, the 14 intricacies of however many pages of legalese, on 15 construction contracts, would have been beyond me. 16 I would have been very easy to bamboozle, to be 17 bamboozled, to pick up the wrong end of the stick or 18 anything like that. It would not -- you know, I wasn't 19 qualified, you know. I might have just had a: I'm not 20 too sure about that. I wasn't in a position to do that. 21 Q. If you can look at the following page, page 79. 22 Paragraph 250 at the top of the page. 251, pardon me: 23 "At the time of contract close my understanding of 24 the purpose of an agreed base date for design 25 information was that it was the date when the design was 48 1 taken as being priced firm to." 2 A. V26. 3 Q. Did it follow from that that if it was priced firm to 4 that date, that what was going to come afterwards would 5 be at tie's expense? 6 A. No, loose wording on my part. 7 What I intended to say there -- at the time of 8 contract close, my understanding of the purpose of an 9 agreed, call it V26, was that that was the date when the 10 design was to be frozen and the contract based on or 11 being priced from. The word "firm", that's ... I would 12 say loose wording on my part. I would delete "firm" too 13 and put in "from" or "at". 14 Q. Even taking "at" or "from", if it was priced at that 15 date, does that infer that where there were changes 16 after that date, they would be at tie's expense? 17 A. There would be changes between, I can't remember the 18 numbers, 26 and 32, and it depended how those changes 19 netted out. But if they were net increase, then -- then 20 depending on what the changes were and why they'd 21 arisen, they would be at tie's expense, and if they 22 weren't, they would be at BB's. So for example, if in 23 the intervening period, something had been signed off, 24 a design element, that had got -- that had got 25 a provisional sum against it, that could now be firmed 49 1 up and the provisional sum might yield a surplus or -- 2 a positive or a negative, a credit or a debit. 3 Q. The possibility of those matters being at tie's expense, 4 was that not a highly material factor in deciding 5 whether or not to approve the contract? 6 A. Yes, it was, if those sums -- if the sum was material. 7 Now, I think I said earlier, I can't remember the 8 numbers. But my understanding was that between V26 and 9 V whatever, when they were netted out, it was not 10 a material sum. At the time, it was, oh, right, you 11 know. So I might be wrong. No doubt you have the 12 figure for what it was. But that was my recollection. 13 Q. If it was priced firm -- if it was priced, leaving out 14 the word "firm", to a certain date, it's not just from 15 V26 to V31 because you were aware, weren't you, that the 16 design wasn't complete at the contract close? 17 A. Yes. 18 Q. Is that correct? 19 A. Correct. 20 Q. So it was going to continue developing? 21 A. Yes, but my understanding was under the novation 22 arrangements, with the previously expressed exceptions, 23 design change thereafter, the cost thereof, fell to BBS. 24 Q. Okay. 25 A. Sorry. 50 1 Q. That's useful to clarify. 2 Could we then look at page 81 and paragraph 259. 3 What you say here is: 4 "Overall, I was not confident that the contracts 5 should be awarded. I felt pressurised to sign. I was 6 in a situation where, if I refused to sign, the 7 Council Solicitor, Donald McGougan, David Anderson and 8 others would say I was holding things up. I felt 9 I might be told that if I didn't sign an immediate Board 10 meeting would be convened and I would be removed from 11 the Board." 12 Was someone actually pressurising you or was this 13 pressure you felt from circumstances as a whole? 14 A. This was the pressure -- there was nobody standing over 15 me. This was a pressure I felt from circumstances as 16 a whole. We covered it on either my first or second day 17 of evidence, and I used -- I used an example, Schindler. 18 And that's what I'm saying there; that -- and I took the 19 liberty of reading one or two of the other transcripts 20 since mine, and I see I'm by no means the only person 21 who has made that point. I see Tom Anderson -- 22 Tom Aitchison and others said it had to go ahead. That 23 was the pressure that we were under. They were under, 24 we were under. This has to happen. 25 Q. They said they felt under pressure because the matter 51 1 had to proceed. Here you're specifically referring to 2 feeling a pressure from a number of other individuals, 3 and you might be removed? 4 A. I've picked those names essentially as being people who 5 were senior to me in some way or another. I'm not 6 specifically singling out Gill Lindsay, Donald McGougan 7 or Dave Anderson, no. 8 Q. This is not just a question of actually stating your 9 views or not stating your views and whatever is 10 righteous in that regard. This is a question where 11 you're called upon, actually, should you give approval 12 to enter into the contract. 13 If ever there was a time to say: I have my doubts; 14 was that not it? 15 A. No. Actually I would disagree with that. I would say 16 that was far too late. If I had been going to stand up 17 and, you know, as I mentioned on a previous case, we 18 know what happened to people who did. I have learned -- 19 I observed that. I knew what the position was. 20 And I still believed -- it was going to happen anyway 21 and I believed I could do more good by trying to guide 22 it and mitigate it and reduce -- get the best outcome 23 possible. That was the mission I'd been given, to do 24 the best we could. We are going to have a tram. Will 25 you do the best you can, Neil? And yes, it wasn't -- it 52 1 wasn't the right thing to do. 2 I could have at that point said: no, I'm not doing 3 it; but that wouldn't have stopped it happening and it 4 wouldn't have stopped it happening because I would have 5 been replaced by someone who would sign. 6 Q. You don't think if you had taken a decision to say no, 7 such as the Approvals Committee couldn't give the 8 go-ahead, whilst it is possible, of course, that you 9 could have been removed, that would have created enough 10 of a notice that something was not right, that something 11 might have been done if someone had said no? 12 A. I don't think so. 13 Q. And that, while you say you've been trying for years to 14 steer it in certain directions, this was the crunch 15 point. This was the last possible point to say: we need 16 to change things. 17 A. If I had take -- yes, you are right, it was the last 18 possible point. If I had taken the line you say, 19 and I could have, then I'm confident I would have been 20 back at Annandale Street looking after some buses with 21 no other involvement thereafter. Somebody else would 22 sign. It would have gone ahead, and the -- some of the 23 more asinine proposals that I managed subsequent to 24 contract signature to get rid of would have been 25 implemented. 53 1 Let me -- may I give you a very simple example? One 2 minute. 3 In the -- in the -- I'm just struggling to find the 4 right word for it. 5 It's not panic, but in the pursuit of cost reduction 6 through value engineering, one of the proposals that 7 they were seriously going to do was to reduce the height 8 of the overhead wires in Princes Street. Now, that 9 would save you a few hundred thousand pounds because the 10 poles would be a couple of metres shorter and also the 11 pantographs on the trams would be a couple of metres 12 shorter. That would, however, if I hadn't -- and this 13 was one of about 20 examples. That would have happened 14 and they would have saved their GBP200,000, GBP400,000, 15 but we would not have been able run open-top tour buses 16 thereafter, because the height requirement was that 17 which had been used to set the height of the wires. 18 So we would have saved GBP300,000, GBP500,000, and 19 lost GBP5 million worth of profitable business. So 20 that's why I was better on the inside than being sent 21 back to Annandale Street to play with my buses. Sorry. 22 That's the way it was. 23 Q. Go back to page 73 of your statement, please, and look 24 at paragraph 231. This is just in the consideration of 25 the development of the infrastructure contract. What 54 1 you say is: 2 "With hindsight, and in view of Andrew Fitchie's 3 position and behaviour, there is absolutely no doubt 4 that it would have been a good idea to have had an 5 independent legal review of the contracts. I think 6 I would have thought that at the time due to my concerns 7 already mentioned." 8 A. Yes. 9 Q. Now, can I ask you firstly what you mean by position and 10 behaviour? 11 A. I think I have said in the statement that I was -- I'd 12 concluded -- well, we had, me and various -- I and 13 various others, Andrew had gone native. He was meant to 14 be, to my understanding, representing the interests of 15 tie and CEC with a joint remit. 16 Now, tie and CEC's interests ought to be pretty 17 closely aligned. One is a wholly-owned subsidiary of 18 the other and it's trying to deliver a project under 19 direct instruction from CEC. 20 As I have said at various other points in my 21 statement, that wasn't necessarily the case. tie had 22 developed a -- had gone its own way in many areas. 23 And I sensed that Andrew had bought in probably from 24 a very early day, and I was by no means the only one, 25 had bought in from a fairly early day to being tie's 55 1 legal support. 2 I'm not suggesting he did anything directly negative 3 to TEL, to Lothian Buses -- well, no, to CEC, but he did 4 seem to be focused entirely on tie. 5 That was not helpful to us, when tie's objectives 6 did not align with TEL or Lothian Buses' objectives. 7 Q. When was that? In what respect did they not align? 8 A. I'm not being fatuous, but the most recent example that 9 I have just used. Let's save GBP500,000 by making the 10 wires lower. That's -- tie's objectives are getting the 11 price down. It's certainly not TEL or Lothian Buses or 12 City of Edinburgh Council's objective to lose GBP5 13 million worth of revenue which is earning a significant 14 profit to cross-subsidise the red buses to Niddrie and 15 Wester Hailes on Sundays or whatever it might be. 16 I mean, there was something earlier on in my 17 statement where Alastair Richards, who was -- 18 Alastair Richards was TEL's only employee. He wasn't 19 paid by TEL. He was paid by Lothian Buses. But 20 Alastair spent -- worked full-time on the tram project 21 and he had sent me an email some time after the event, 22 saying, I can't remember the precise wording, but: hey, 23 no surprises here, look what Fitchie did to us. It had 24 come out later that he'd supplied in -- he'd edited 25 something, he'd taken stuff out and claimed it was 56 1 because we'd said take it out. You know. He was no 2 friend of ours. So I was very wary. We were all very 3 wary of Andrew's motivation. 4 He seemed to be -- yes, he was motivated to serve 5 tie, not the greater interests of the whole project. 6 CHAIR OF THE INQUIRY: You say that it would have been 7 a good idea to have an independent legal review. To 8 what extent did you get the impression that Gill Lindsay 9 as Council Solicitor and her department were performing 10 that function? 11 A. I didn't -- I didn't attend legal affairs. It's not my 12 subject. Therefore, my opinion is based purely on what 13 I picked up along the way at Board meetings, Project 14 Board meetings, et cetera. And the contact I had with 15 the people from Finance and Legal, who spent a lot of 16 time at the tie office, and certainly some of the -- not 17 Gill Lindsay. She was pretty much Board meetings only, 18 but some of the lesser individuals who were there and 19 really in about it, in both commercial and legal, they 20 had to my mind a pretty good grasp of what was going on. 21 And were certainly asking -- asking the awkward 22 questions, perhaps privately or amongst -- amongst their 23 own, but yes, I certainly got the impression that 24 they -- they were acting as a sort of independent review 25 of what was going on from a legal and commercial point 57 1 of view. 2 CHAIR OF THE INQUIRY: Did you get the impression from these 3 people on the legal side that they thought that the 4 contract shouldn't be signed? 5 A. Not that specific, no. I'm not saying that they didn't 6 hold that view, but I didn't actually pick that up from 7 them. But I wasn't meeting them all the time. I might 8 just be, you know, passing the time of day, or sat -- 9 sat beside, because it was an open plan office, sat with 10 them -- or sat with somebody else and they were next 11 door and you got into a conversation. 12 But no, I never got the impression that it was: you 13 must not sign this. 14 You know, they certainly were -- they clearly had 15 their reservations. 16 CHAIR OF THE INQUIRY: And you say they were asking awkward 17 questions and they had their reservations. Did you pick 18 up on that and raise it at meetings to say that you 19 understood that junior lawyers had reservations? 20 A. I think -- I remember an incident certainly -- the 21 answer to your question is no, I didn't raise it, but -- 22 at the meetings, because I think -- I remember there was 23 an incident with Trudi Craggs where she did, and, you 24 know, she was quite upfront about it in a Project Board 25 or something. And I think, you know, I said to her, 58 1 after the meeting, you know: good on you, you know; you 2 actually said your bit there. 3 I think she got her head in her hands, if I remember 4 correctly, she got her head in her hands for doing so 5 and it's not legal, but on -- I'm pretty sure that 6 happened with Rebecca Anderson (sic) -- Rebecca Andrew 7 on the commercial side. Similarly, she -- she stuck her 8 head above the parapet and got it shot off. 9 As I have said before, no, my view very simply was 10 head down, do the best I can, in the circumstances I'm 11 in, to try and mitigate the effects, because I don't 12 want to end up like others who have put their head above 13 the parapet. That will do nobody any good, and we 14 wouldn't be in the position we're in today where the 15 tram is actually doing as well as you could hope in the 16 circumstances. And the buses have survived largely 17 unscathed. 18 CHAIR OF THE INQUIRY: Thank you. 19 MR LAKE: I want to move on to a slightly different matter, 20 Mr Renilson. Could we look at page 93 of your 21 statement. 22 A. Yes. 23 Q. Paragraph 300. What you say here is: 24 "The election ..." 25 The Scottish general election: 59 1 "... was in May and Parliament did not recommence 2 until around September. Over that summer they tasked 3 Transport Scotland with looking for ways out of both the 4 tram project and EARL. Transport Scotland were to 5 consider whether a large section of tram could be built 6 as a guided busway, or something that would cost an awful 7 lot than, at that time, their GBP500 million contribution. 8 I had involvement with the Transport Scotland team 9 looking at the other options but, Bill Reeve who led the 10 Transport Scotland review was not keen on any of the 11 alternative possibilities, and was far more interested in 12 finding reasons why the Tram should/could not be 13 cancelled." 14 Do you see that there? 15 A. I do indeed. 16 Q. I think for completeness, if we look at page 98 -- 17 A. Before we leave that page, can I just say there may be 18 one thing in there that's not quite right. 19 Q. What is that? 20 A. The election was in May. I've -- I have said Parliament 21 did not recommence until around September, over that 22 summer. What I think that should say, because I can't 23 remember the precise timing, but I think that ought to 24 read is "following the election they tasked 25 Transport Scotland". It might have been over the summer 60 1 or it might have been very quickly after the election. 2 But that's just a timing issue. Basically, yes, stand 3 by that completely. 4 Q. I will come back to the timing in a moment. If to 5 complete this we go to page 98, we have that on screen 6 now, and look at paragraph 316. Reading from the fourth 7 line, we can see: 8 "When Transport Scotland were tasked by the SNP 9 between May and September 2007 to come up with some 10 alternatives that would give Edinburgh something 11 cheaper, but not the tram, I was very firmly left with 12 the opinion after spending time with him that 13 Bill Reeve's view was not to genuinely look for 14 alternatives." 15 That's your view; is that correct? 16 A. That was my view at the time and that remains my view. 17 Q. We have evidence -- obviously we know the date of the 18 general election was in May? 19 A. Yes. 20 Q. But the vote in Parliament to proceed with the tram 21 project was actually on 27 June 2007. 22 A. So is what you're saying it took -- I have said between 23 May and September. You are saying it was between May 24 and June. 25 Q. That's what I'm asking. Were you involved with this 61 1 prior to the vote in Parliament, or are you suggesting 2 it continued after the vote in Parliament? 3 A. I couldn't be absolutely clear, but the reason 4 I corrected the first one is on reflection, I think it 5 happened very quickly after the election that -- because 6 the SNP manifesto was to cancel EARL and to cancel tram. 7 Although it wasn't spelt out quite so clearly on tram. 8 But it was words of one syllable on EARL. 9 Q. What was your involvement? 10 A. Well, can I finish this wee bit before we go on, please? 11 And it may indeed be that it occurred immediately 12 after the election and the vote took place, as you say, 13 at the end of June, before the recess. 14 It certainly was after the election shortly. 15 What was my involvement? My involvement was -- 16 don't get me wrong. I like Bill Reeve. Very, very good 17 guy -- 18 Q. I'm less interested in Bill Reeve, I'm more interested 19 in what was your involvement -- 20 A. My involvement was Bill came and said right, he and a 21 couple of other people from Transport Scotland: let's go 22 out for a couple of days and let's go and drive the 23 route and see what else we can do. So there was four of 24 us in a car, trundling round west Edinburgh, stopping, 25 looking at bridges, saying: what can we put down here, 62 1 what can we do; can we do a guided busway extension; you 2 know, what are the other possibilities for something -- 3 some public transport improvement in that area which 4 would cost some millions of pounds, but would be -- 5 would release basically the 500 million for the A9 6 dualling. And you were looking at maybe, I don't know, 7 somewhere less than 50 million as opposed to 500, and 8 that was exactly the same thing happened with EARL, but 9 in the case of EARL, they got the station on the 10 tramway. That was a sop for cancelling EARL. 11 Q. Now, I'm going to ask you one more question. 12 Can I impress upon you this time that what I'm looking 13 for initially is a yes-or-no answer? 14 A. Understood. 15 Q. I'm going to be quite limited. 16 It's: do you have information to the effect that 17 there were employees or agents of tie soliciting or 18 receiving corrupt payments? 19 CHAIR OF THE INQUIRY: Just answer yes or no. 20 A. Can I ask you to rephrase -- repeat the question? 21 MR LAKE: Do you have information as to whether employees or 22 agents of tie were soliciting or receiving corrupt 23 payments? 24 A. Yes. 25 Q. Would you be willing to provide that information to the 63 1 Inquiry? 2 A. Yes. 3 Q. Will you do so, please, by midday on Monday? 4 CHAIR OF THE INQUIRY: In writing. 5 MR LAKE: In writing, to the solicitor to the Inquiry, and 6 address and contact details can be provided. 7 A. Mr McNicholl? 8 Q. Yes. And you undertake to do that? 9 A. Yes. Yes, is it possible for me to dictate it this 10 afternoon? I mean, through there, with one of your 11 staff? I'm very happy to do that. 12 CHAIR OF THE INQUIRY: We'll discuss that over -- at the 13 coffee break. 14 A. Thank you, okay. I'm just going to be away this 15 weekend. So Monday would be a bit of a problem, but I'm 16 happy to do it this afternoon if I've finished -- if 17 you've moved on to Stewart by this afternoon. 18 MR LAKE: My Lord, I have no further questions for 19 Mr Renilson. That was my last. 20 CHAIR OF THE INQUIRY: Mr Dunlop? 21 Examination by MR DUNLOP 22 MR DUNLOP QC: My Lord, just one question that was rather 23 left hanging, if I might, on the question of the DLA 24 advice letter. 25 Does your Lordship want to know first what I want to 64 1 ask before he gives permission or is your Lordship 2 prepared to -- 3 CHAIR OF THE INQUIRY: If it's about the DLA advice letter, 4 I'm quite happy. 5 MR DUNLOP QC: I'm obliged. It's CEC01033532. 6 It's page 3 of that letter. Paragraph 5, 7 Mr Renilson. You were looking at this earlier with my 8 learned friend. You indicated in the second paragraph, 9 under section 5, that Mr Fitchie was advising of two 10 things. You mentioned the first thing, and then you 11 were interrupted and I think the discussion moved on. 12 You didn't mention the second. I wonder if I could just 13 ask you to explain what the two things were that you 14 were -- 15 A. Can I just have a minute to re-read it again. 16 Q. Please. (Pause) 17 A. tie are prepared for the BBS request for an immediate 18 contractual variation, blah blah blah. That, my 19 understanding, was basically the day after we signed, we 20 were going to be putting in a variation to handle V26 to 21 V31 issues. 22 Q. So on that first issue, you were aware that there would 23 be an immediate Notified Departure -- 24 A. Yes. 25 Q. -- immediately following this signature of the contract? 65 1 A. Yes, thank you. Was that the question? 2 Q. That was the first one. I think you had addressed that. 3 Then there's a second point that you had identified, 4 and I just want to understand what your understanding 5 was of that second point as well, please. 6 A. "As well as for the management of contractual Notified 7 Departures when (and if) any of the programme related 8 pricing assumptions fall." 9 Now that you've pointed that out, tie are prepared 10 for the BBS request for an immediate contractual 11 variation to accommodate, and if you were to put in a 1 12 at that point, we have talked about it, and a 2 in at 13 the beginning of "as well as ... the management of 14 contractual Notified Departures". 15 Now, that to me sounds like a non-cash issue that as 16 soon as we've signed the documents, BBS are going to 17 want a different protocol for management of Notified 18 Departures. 19 If that is what it is saying, then that would have 20 been of no concern to me whatsoever because that just 21 sounds like making an alteration to, you know, who tells 22 who what when or whatever, a non-cash issue. 23 The first one would have been a cash issue, but 24 I may be misreading that. 25 Q. What it's clearly identifying under the topic of risk 66 1 is: Notified Departures, when and if any of the 2 programme-related Pricing Assumptions fall. 3 A. Fall, yes. 4 Q. Now, you were aware that the contract contained a number 5 of Pricing Assumptions, weren't you? 6 A. Yes. 7 Q. You were aware that if those Pricing Assumptions did not 8 hold good, then that would be a change and that would be 9 at tie's risk? 10 A. In its -- if in its most simplistic form. If during the 11 construction period the Water of Leith floods and washes 12 away half the embankment, yes. 13 Q. If any of the Pricing Assumptions did not hold good, 14 then that was at tie's risk? 15 A. Any of the Pricing Assumptions, no. It depends what -- 16 I mean, things like the price -- the price for -- the 17 price for Siemens' substations, for overhead copper 18 wire, that was all fixed. And if the prices still went 19 up, that was Siemens' problem. 20 Q. I'm talking about the Pricing Assumptions in Schedule 21 Part 4 of the contract. You know that there were 22 Pricing Assumptions contained in the contract 23 saying: this price is based on the following 24 assumptions. 25 A. I'm aware of that, yes. 67 1 Q. You know that the price would not hold good if the 2 Pricing Assumptions did not hold good? 3 A. No. 4 Q. You weren't aware of that? 5 A. May I explain? I was not -- I had not invest -- or 6 reviewed that part of the contract -- I think I have 7 said earlier a number of times, the full contract suite, 8 particularly with relation to Infraco, I had not 9 reviewed the contact -- contract in great detail. 10 I wouldn't say I was word perfect on Tramco, but I had 11 a pretty close handle on Tramco. 12 But Infraco, no. I had not gone into the innermost 13 details of the contract. My assumption or my 14 understanding was that barring the sort of things we've 15 talked about, ground and weather and so on, and CEC 16 planners' moods, then the price from BBS was fixed. 17 I'm sorry, that may be incorrect, and I think, with 18 hindsight, based on the outcome of adjudications and so 19 on, my view was incorrect, but that was my understanding 20 at the time, and had I read the detail of these elements 21 of the Infraco contract, as I said earlier, I would not 22 have understood them. I'm not a contract lawyer. I had 23 to rely on the advice being provided by Andrew Fitchie 24 and -- and the people -- the Steven Bells and so on and 25 Susan Clarks at tie who were -- had experience in that 68 1 field. 2 Q. So if his Lordship has heard evidence from Mr Bell, for 3 example, that Mr Bell fully understood where the 4 incidence of risk lay, and fully understood what the 5 Pricing Assumptions meant, should we understand that 6 Mr Bell, for whatever reason, did not pass that on to 7 you? 8 A. I think you're jumping two -- making too large a jump 9 there. I do not in any way think Mr Bell deliberately 10 withheld. It may be that I had not asked the question, 11 or I had not been present at the meeting when this 12 subject had been gone through in detail. All I can say 13 is I was not aware of it. 14 But I don't think -- I doubt Steven would have held 15 out, you know, deliberately kept it to himself, and 16 maybe -- maybe it had been explained but it hadn't 17 registered. 18 I was of the opinion, the understanding that it 19 was -- it was with the exceptions that we've talked 20 about, it was essentially on the part of BBS, Bilfingers 21 and Siemens, and to be fair, CAF, fixed price. 22 Q. I'm not sure why you think I'm making too great a leap 23 there, Mr Renilson. What I'm putting to you is that if 24 his Lordship has heard evidence, which he accepts, that 25 Mr Bell fully understood the risks, does that mean 69 1 Mr Bell did not pass that understanding on to you? 2 A. Yes. 3 MR DUNLOP QC: Thank you. I'm obliged, my Lord. 4 CHAIR OF THE INQUIRY: I don't think there are any other 5 questions. 6 A. My Lord, can I -- just to say apologies for that, but 7 I thought you were implying that Mr Bell had wilfully 8 withheld information. I would just say that at no time 9 at tie did I ever get the impression that any of the 10 senior staff at tie or TEL or CEC were acting other than 11 in what they perceived to be the best interests of the 12 project. We may have had -- well, we did have differing 13 objectives. We all had our character flaws. And we're 14 all human beings. But nobody took it lightly. Nobody 15 took it lightly amongst the senior staff that I dealt 16 with. You know, everybody was very committed to doing 17 the very best as they saw it, as they saw their 18 responsibilities, for their, you know, who they were 19 responsible to. 20 Yes, poor decisions were taken. Some of those poor 21 decisions were recognised as poor decisions at the time, 22 and with hindsight, they were a damn sight poorer, but, 23 you know, conflicting motivation, yes, they were there 24 and we knew they were there. 25 So I just wanted to say, nobody tried to -- nobody 70 1 sat there and did what they did lightly. 2 Thank you. Sorry for that. 3 CHAIR OF THE INQUIRY: We'll adjourn until 11.30. During 4 that period, representatives of the Inquiry can speak to 5 you about -- 6 A. Sure. 7 MR DUNLOP QC: My Lord, just before your Lordship rises, 8 I was completely unsighted on the last topic raised by 9 my learned friend and the point that Mr Renilson is to 10 advise of in due course. 11 I just would like some clarity on how that is going 12 to be dealt with. 13 CHAIR OF THE INQUIRY: I think in the first instance I want 14 to see the allegations. 15 MR DUNLOP QC: Yes. Is there a reason why they're not 16 simply being taken from him -- 17 CHAIR OF THE INQUIRY: Yes. 18 MR DUNLOP QC: Doubtless we will all be able to see it and 19 respond in due course. 20 CHAIR OF THE INQUIRY: Yes, certainly, in due course, but 21 I don't want disclosure to be made publicly of 22 allegations until at least I know what they are and some 23 investigation is made into them. 24 MR DUNLOP QC: I'm obliged. 25 CHAIR OF THE INQUIRY: So we'll adjourn until 11.30. 71 1 (Witness withdrew) 2 (11.12 am) 72 1 INDEX 2 PAGE 3 MR NEIL RENILSON (continued) .........................1 4 5 Examination by MR LAKE ........................1 6 7 Examination by MR DUNLOP .....................64 8 9 MR STEWART MCGARRITY (continued) ....................72 10 11 Examination by MR MCCLELLAND (continued) .....72 12 13 Examination by MR DUNLOP ....................119 14 15 Examination by MR FAIRLEY ...................131 16 17 18 19 20 21 22 23 24 25 135