1 Wednesday, 21 March 2018 2 (9.30 am) 3 CHAIR OF THE INQUIRY: Good morning. Yes, Mr Lake. 4 MR LAKE: Thank you, my Lord. 5 The first witness today is Mr Graeme Bissett. 6 I should say he has previously attended to give oral 7 evidence to the Inquiry, but it was considered that 8 there were some matters that he could usefully be asked 9 further questions on, and he has come back for that 10 purpose. 11 MR GRAEME BISSETT (recalled) 12 Examination by MR LAKE 13 MR LAKE: Mr Bissett, we obviously already have your details 14 from the first time you came here to give oral evidence. 15 What I would like to do is turn to ask you a few 16 questions about the quality assurance systems and 17 schemes that were put in place on the lead-up to close 18 of the project. The first document I would like you to 19 look at is CEC01431194. 20 You can see that on the screen at the moment, and 21 this is an email that was from you to Andrew Fitchie, 22 Steven Bell, Jim McEwan, Geoff Gilbert, Alasdair Sim, 23 Susan Clark, Stewart McGarrity, and then copied to 24 various others. Do you see that? 25 A. I do, yes. 1 1 Q. It was dated 25 March and the subject matter was 2 Financial Close and QC programme. 3 A. Yes, indeed. 4 Q. Now, first of all, looking at those recipients and the 5 various people to whom it was copied, what determined 6 who got this email and who was copied into it? 7 A. I think these individuals would be the primary people 8 involved in the key sections of the close report and 9 related documents who would therefore either have 10 drafted or would understand the content of the 11 documents. 12 Q. When you say the close report, was that the suite of 13 documents we looked at last time that consisted of 14 a report on the contract, a report on the final stages 15 of the contract -- negotiations, the legal report from 16 DLA and so on? 17 A. Yes, indeed. 18 Q. Could we look at the first paragraph. You see there it 19 says: 20 "Thanks for your time and input this am. For those 21 who have not been involved in this discussion to date, 22 the attached paper is a summary of the process we intend 23 to apply to ensure the Financial Close documents are in 24 robust shape. The paper will also go to the tie Board 25 for their information. The spreadsheet sets out the 2 1 detailed responsibilities." 2 If we look further down, we see: 3 "Andrew will provide a list of finalised Infraco 4 schedules for QC action this week. It would be useful 5 if he would do the same next Monday for further action." 6 Underneath that there's a programme with four 7 different dates specified, and against the first three 8 of them, in each there's some reference to QC programme? 9 A. Indeed, yes. 10 Q. That's referring to the quality control of the various 11 documents? 12 A. It is, yes. 13 Q. What was your role in relation to quality control of the 14 documentation? 15 A. I think at this stage it was to design the quality 16 control programme probably with discussion amongst the 17 team, and then to oversee the delivery of that 18 programme. 19 Q. What do you mean by oversee delivery of the programme? 20 A. Well, to monitor where things needed to be done, either 21 at this stage probably still preparation or finalisation 22 of documents, but then also the checking and 23 second-guessing of documents that that programme was in 24 place and being executed. 25 I should possibly add that the colleague who did the 3 1 day-to-day monitoring of what was being done was 2 Susan Clark, who I regarded as a very diligent and 3 organised person and was the Deputy Project Director, 4 I think, at that time, and she took the day-to-day 5 responsibility for the chasing and harrying and making 6 sure that things were being done. 7 Q. For completeness, we can see at the foot of the screen 8 at the moment the paragraph which notes that: 9 "Susan will manage the Close Programme, including 10 the QC work over the next three weeks." 11 That's what you are confirming to us there, that she 12 had day-to-day responsibility? 13 A. Indeed, yes. 14 Q. In terms of your responsibility and how it related to 15 hers, did you work alongside her in providing some 16 oversight or monitoring of the process? 17 A. Yes, I think that's a fair description. It certainly 18 wasn't a reporting line in that sense. We were 19 colleagues in the senior team. 20 Q. We saw in the first paragraph, there was a reference to 21 an attached paper. If we could look at that now, 22 please, it's document reference CEC01431196. Perhaps 23 firstly I could ask you to confirm, is that the paper 24 that would have been attached to your email? 25 A. Yes, I think so, yes. 4 1 Q. We can see, as we scroll down there, there's a table 2 which is the same four dates and the same sort of text 3 that appeared in your email as regarding the various 4 actions to be carried out at each of those dates? 5 A. Yes. 6 Q. If we scroll further down, under the heading "Quality 7 control" and the sub-heading "Outputs", we see the 8 things that this was designed to achieve. One of the 9 things, the first thing, is the Infraco Contract Suite, 10 second, necessary third party agreements, the third, the 11 close report and appendices, and the fourth, the DLA 12 report and appendices. There are two others after that. 13 A. I see that. 14 Q. Now, again, if we go over the page, in the process in 15 relation to these various outputs, enlarge the top of 16 the screen, we see the first of the processes is the 17 management of the close process and issue resolution. 18 That's assigned to JM. Would that be Jim McEwan? 19 A. I think it would be, yes. 20 Q. What was that process about and what it was intended to 21 achieve? 22 A. This was March, I think, the date of the year, was it? 23 Q. Yes. 24 A. I think at that time Jim was pretty closely involved in 25 the final negotiations with the Infraco side of the 5 1 house, and he probably had visibility over all of the 2 key areas, so the concept was -- and I should say, 3 I can't quite remember for sure if this was the case, 4 but from memory, that was Jim's role, and therefore the 5 concept was that Jim with that visibility was in a good 6 position to make sure that that piece of the closeout or 7 the quality control was executed properly. 8 Q. The second matter, finalisation of the Infraco Contract 9 Suite, that's assigned to DLA, the firm of solicitors 10 acting? 11 A. Indeed, yes. 12 Q. What was their role then in relation to finalisation of 13 the Contract Suite or what was the process that you 14 envisaged being undertaken there? 15 A. Well, I think I would have assumed the same as with any 16 major firm of lawyers with whom I had worked in closing 17 out a major contract, which is that the firm would have 18 its own internal quality control procedures to make sure 19 that all of the components of the contract were in 20 existence. They had final read-throughs, potentially, 21 and I don't know DLA's internal procedures, but possibly 22 a review by an independent partner or senior person 23 within the firm. That sort of thing. 24 Q. We touched very briefly on your business experience last 25 time. Do you have experience of working with large 6 1 firms of solicitors in relation to the conclusion of 2 significant contracts? 3 A. Yes. Over a good number of years. I should say mostly 4 in corporate transaction or fundraising, bank debt or 5 equity raising activity. 6 Q. In that situation, what is the role of the solicitor in 7 your experience in finalising or overseeing the terms of 8 the agreement? 9 A. In my experience, the firm takes responsibility for the 10 final quality control over all of the legal 11 documentation which they've obviously been involved in 12 negotiating and advising on; and once they sign off, 13 very often with a summary report in some form, obviously 14 it varies depending on the circumstances, but a summary 15 report which is in more of a, if you like, a commercial 16 analysis and summary for boards to feel comfortable that 17 that part of the process has been executed. 18 I think that is pretty well standard practice. 19 Q. I should say this document, as we have seen, was 20 attached to the email, the first recipient of which was 21 Andrew Fitchie at DLA. Can you recall getting any 22 feedback from him about this or any indication he wasn't 23 happy with the role that DLA were being assigned in this 24 document? 25 A. No, none at all, and I think I would have remembered if 7 1 there had been any difficulty. 2 Q. Would it have been significant if the solicitors had 3 come back and said: no, we are not willing or able to 4 undertake that particular role. 5 A. I think it would have been very significant, yes. 6 Q. We see in the third bullet on the top of the screen, 7 there is the DLA report and appendices finalisation. We 8 have already seen that report and naturally that's 9 assigned to DLA? 10 A. Indeed. 11 Q. The fourth element is the close report and appendices 12 finalisation, and is that the suite of documentation 13 you've already referred to this morning? 14 A. It is, yes. 15 Q. Looking further down to the "Quality control approach" 16 heading, we see it notes that: 17 "The objective is to ensure that a knowledgeable tie 18 or TEL person, semi-independent of the front-line 19 negotiating and legal team, reviews the final form of 20 the documents. The review should identify (1) fatal 21 flaws; (2) potentially important issues needing an 22 internal debate before sign-off; and (3) obvious errors. 23 This review is not about nuances or minor drafting 24 changes, nor is it designed to second-guess negotiated 25 commercial positions unless there is an obvious serious 8 1 issue." 2 Now, we see one description there, but in general, 3 what was this intended -- this process, the quality 4 control process, intended to achieve in relation to the 5 various documents referred to? 6 A. Well, I think possibly to separate between the contract 7 suite on the one hand and the more -- if I could say -- 8 informal documents, namely the close report itself, 9 which wasn't itself a legal document. 10 As far as the Contract Suite was concerned, as 11 I mentioned earlier, when we looked to the legal adviser 12 to confirm that that contract was in shape for signing, 13 in all respects, as far as the more internal documents 14 were concerned, the point was: do these documents 15 provide a fair representation of all the key issues that 16 are relevant to people being asked to approve the 17 contract signing? 18 Q. Could I ask you firstly to move the microphone slightly 19 closer to you. 20 A. This one? 21 Q. Yes, thank you very much. 22 Dealing with the second point there, in relation to 23 documents other than the Contract Suite, what you seem 24 to be describing is almost a check for the accuracy of 25 the factual statements that are made in those documents? 9 1 A. Yes, and also a representation -- a fair representation 2 of judgements, to the extent there were important 3 judgements being presented as well. 4 Q. However, differently in relation to the Legal Suite, 5 Contract Suite, because they were obviously not making 6 factual statements? I'm just trying to be clear about 7 what it was you were looking for in relation to that? 8 A. In terms of the Contract Suite? 9 Q. Yes. 10 A. Well, I probably just repeat myself. It was the final 11 sign-off and approval from our legal advisers that the 12 contract was in a fit state for signature on both sides, 13 but particularly the client side. 14 Q. You make the point obviously that it's not intended to 15 be minor drafting nuances, ie could have expressed this 16 better, but trying to identify problems; is that 17 correct? 18 A. That's correct. You can always find minor things, but 19 this was important in the sense of being focused on key 20 issues only, whatever that may appear to be in the eyes 21 of the reviewers. 22 Q. Sometimes in that sort of process you find things 23 whereby, because of many changes, versions of 24 the document, it might refer to Schedule 10 and there is 25 in fact no Schedule 10, or it refers to clause 30 10 1 dealing with one issue, and in fact because of 2 renumbering, it doesn't deal with that issue anymore. 3 Presumably it would be intended to pick up that sort of 4 thing? 5 A. I think so, but as long as it was quite evident that if 6 Schedule 10 was being described, and it should be 7 Schedule 11 because things had moved on, then that would 8 be less of an issue. But clearly well worth flagging 9 any points that did arise of that type. 10 Q. We know we also ended up in the situation in relation to 11 this contract where clause 80, which dealt with 12 variations and notified departures, had a mechanism for 13 dealing with them which ultimately led to the contract 14 not progressing. You will be aware of that? 15 A. In general principle, yes, it was a problem, yes. 16 Q. Would you expect that sort of thing to have been 17 considered at the time of the quality control process? 18 A. I think it possibly depends on the sequence of events. 19 If -- I'm not quite sure where that situation ended up, 20 but if a commercial view had been taken by the team in 21 a discussion with the legal advisers, and that final 22 position was, as far as they could tell, the extent of 23 the negotiating power that they had, and it was properly 24 represented in the documents, it may not -- excuse me -- 25 of itself be something that would be flagged because it 11 1 was there as an agreed position, and understood to be 2 agreed. 3 On the other hand, if the presentation in the 4 documents seemed to say something that was at odds with 5 the apparently agreed position, then one would expect 6 that to be flagged and, you know, that would be one 7 example, had that transpired. 8 Q. So how is the person carrying out the review to make 9 a judgement about whether or not this is drafting which 10 should be corrected, a problem, or simply something 11 which is what the parties have agreed and should be 12 left? 13 A. I think because the people doing the reviewing were 14 knowledgeable about the way the contract and the 15 negotiations had evolved, and also I think we were 16 saying to flag up if there were -- there were issues or 17 things that with the benefit of taking a cold towel look 18 at the document, just didn't seem to make sense. This 19 was the chance to raise them. But it was -- I would 20 say, distinguish that from someone reviewing the whole 21 set of negotiated positions and trying to second-guess 22 why those commercial positions, if you like, had been 23 arrived at. That really was not what was needed at this 24 stage. We were through that. 25 Q. I can see that it would at that stage not really be 12 1 advantageous to have people expressing their view as to 2 whether or not the underlying agreement was a good one 3 or not, because you were past that. But in terms of 4 finding processes within the contract which it was 5 thought would not work smoothly, was that the sort of 6 thing that would be -- 7 A. Yes, I think so, and it's very difficult to be black and 8 white about these sort of issues, but if the reviewer 9 felt: well, I know that's where we've got to, but this 10 clearly carries significant risk, for example; that 11 would be something that might be raised and discussed 12 further before people put pen to paper. 13 So I don't think there was anything in this process 14 that was intended to preclude the raising of that sort 15 of issue, if people felt that it was significant enough 16 to discuss further. 17 Q. If we are returning to the document on screen, which is 18 your paper attached to your email, looking at the 19 paragraph towards the centre of the screen, it begins: 20 "The attached matrix sets out the detailed 21 responsibilities: 22 "The responsibility for finalisation of the Infraco 23 Contract Suite is based on the matrix controlled by 24 Geoff. 25 "The Primary Reviewers for each important document 13 1 must review the document in full and sign-off. 2 "The scope of work by the Secondary Reviewers should 3 be agreed with the Primary Reviewer and comments finally 4 provided to the Primary Reviewer who can judge how they 5 should be handled." 6 Now, how were the primary review and the secondary 7 review to interact with one other? Were they intended 8 to achieve different things or two versions of the same? 9 A. I think it was maybe on the more complex documents to 10 have two sets of eyes rather than one. But the extent 11 of the work by the secondary reviewers would vary, 12 I think, depending on the scale and complexity of the 13 document they were being asked to consider. If it was 14 fairly straightforward, for example, there may not have 15 been much value in that secondary review. 16 Q. If we scroll down the page a little bit as it appears on 17 screen, in the paragraph after the underlined one, we 18 see that: 19 "DLA will perform their own legal QC review on the 20 full set of final documents and this will support and 21 complement the review by tie/TEL people." 22 We've been discussing already how we might have 23 things in relation to the commercial agreement which you 24 were not interested in at this time, and matters 25 relating to what might be termed the working of the 14 1 documents which you would be interested in. 2 How does the role of DLA in these things differ from 3 or relate to the role of the tie people in carrying out 4 this review? 5 A. I think in terms of the Contract Suite as I described 6 earlier, their role would be quite clear cut in 7 principle at least from my point of view. 8 So far as their role in the internal documents is 9 concerned, I think it was about consistency and ensuring 10 that any key issues that were in the Contract Suite were 11 fairly represented in the more informal internal 12 documents. 13 Q. We saw reference in the -- before the bullet points 14 there was a reference to an attached matrix. Could we 15 look at another document, please, which is reference 16 CEC01431195. 17 Is this the schedule that would have been attached 18 to your paper? 19 A. Yes. I'm sure that is, yes. 20 Q. We can see we have got at the top left, the heading 21 "FINANCIAL CLOSE -- QC PROCESS", and underneath that 22 a sub-heading, "Documents", and then a list of various 23 different documents running down the page. Do you see 24 that? 25 A. Indeed, yes. 15 1 Q. If we just take under the heading "Infraco Contract 2 Suite", the first thing, the Infraco contract, we can 3 see the responsibility for finalisation there is 4 assigned to GG/DLA. That would be Geoff Gilbert and 5 DLA, presumably? 6 A. Yes. 7 Q. If we go further down the page to row 21, I think we can 8 see that the document in question there is Pricing 9 Schedule 4. Do you see that? 10 A. I see that, yes. 11 Q. The responsibility for finalising that is GG/BD/DM. 12 Would that be Geoff Gilbert, Bob Dawson and 13 Dennis Murray? 14 A. I'm sure that's correct, yes. 15 Q. Their responsibility in the top of that column is 16 described as finalisation. What does that entail? 17 A. Again, it probably varies by document, but where issues 18 were still subject to potential movement and discussion 19 or negotiation with the Infraco, these were the parties 20 who were closest to that process to make sure that the 21 final positions were reflected in the document to the 22 extent there was any change. 23 Q. We can see to the right of that in a blue column, the 24 main QC review was SMcG. That would be 25 Stewart McGarrity? 16 1 A. Yes. 2 Q. The secondary reviewer, there's just the one, SB, would 3 be Steve Bell? 4 A. Steve Bell, yes. 5 Q. I should have noted the Infraco contract, row 9, the 6 main QC review was Steve Bell, and the secondary 7 reviewers were Dennis Murray, Jim McEwan and 8 Stewart McGarrity? 9 A. Yes. 10 Q. In relation to both the Infraco contract and Schedule 4 11 of that contract and in fact all the matters we see in 12 the upper part of the table there, there's a tick in the 13 brown column to the right, indicating that there will be 14 a full DLA QC review? 15 A. Yes. 16 Q. What records were kept of the quality control reviews 17 that had been carried out? 18 A. I'm afraid I can't recall. As I mentioned, Susan was 19 handling that and I'd be surprised if that wasn't 20 documented pretty rigorously. 21 Q. What about input by DLA? Was there any formal document 22 obtained from them confirming that they had carried out 23 the QC review? 24 A. There may have been confirmation in the documents that 25 Susan Clark controlled, but other than that, I'm not 17 1 aware of anything. I suppose the final sign-off on the 2 contract and their reports at financial close was the 3 final conclusion to that process, but before that, I'm 4 afraid I can't recall. 5 Q. Can we look at a different document, please, reference 6 CEC01374219. This is not an email to which you were 7 a party, but you can see, just looking at it, it's from 8 Dennis Murray, to Stewart McGarrity and Andrew Fitchie, 9 copied to Steve Bell and the subject is ETN Schedule 4. 10 There's a date of the email of 22 April 2008. 11 A. I see that, yes. 12 Q. It says: 13 "Schedule 4 attached for QA review." 14 Were you involved in these emails at all, monitoring 15 them or being informed they were being sent out? 16 A. I don't think so at all, no. 17 Q. Do you have any understanding of what the purpose of 18 this email was? 19 A. It looks as if it's -- this is from Dennis Murray. It 20 looks as if it's Dennis doing the final quality control 21 review that maybe in this case he was asked to do, 22 namely checking that things were in order, that 23 documents were there that should be there, et cetera. 24 So I'd take it as an example of the type of activity 25 that was going on to execute the QC process. 18 1 Q. Was there a system in place to ensure that all the 2 quality control checks specified in your table had in 3 fact been carried out? 4 A. Again, I think I could only say that I would have relied 5 on Susan to maintain that control and as far as 6 I recall, there was no significant debate about the 7 responsibilities or timescale so far as the individuals 8 could control it. 9 So I would be quite confident that it was executed, 10 but direct answer to your question is: I don't know what 11 documents were used to do that. 12 Q. Turning to a slightly different matter now, in relation 13 to the documents used at close, financial close of the 14 project in 2008, I would like you to look, please, at 15 document CEC01319006. 16 We can see that this is a minute of a meeting of the 17 tie management team to confirm readiness to proceed with 18 the completion of the Infraco Contract Suite set to take 19 place on 13 May 2008. And you were one of the six 20 persons attending that meeting. 21 A. Yes. 22 Q. Do you recall this meeting in this minute? 23 A. I recall the events at that time. This, I think, was 24 a day before contract signature, and it may have been me 25 that instigated the meeting to make sure that at the 19 1 very last stage, that all of the senior team were 2 comfortable with the documents that were being used to 3 support the sign-off. 4 Q. We can see the first paragraph notes the meeting had 5 convened to consider the readiness of the Infraco 6 Contract Suite for completion: 7 "All present noted that adequate information had 8 been provided on which to competently proceed. In 9 particular, the terms of the Infraco Contract Suite and 10 all key related information had been set out in 11 successive versions of ..." 12 There are a number of documents set out there? 13 A. Yes. 14 Q. This minute is in a typeface which is one that you 15 frequently use for your documents. Did you draft this 16 minute? 17 A. I think I would have, yes. 18 Q. Would it be normal practice, when facing sort of 19 completion of contracts, to draft these minutes in 20 advance? 21 A. Yes, I think so, to make sure that there's a proper, if 22 succinct, record of the key decisions and conclusions 23 that were reached. 24 Q. They are intended also to act as a -- fair to say -- 25 check list for what is to happen on the day? 20 1 A. That's fair as well, yes. 2 Q. I think on the day there are a number of different 3 meetings, and that there had to be a meeting of the 4 Council or the Policy and Strategy Committee to give 5 their approval, meetings of the tie management team, and 6 meetings and Approvals Committee of the various 7 companies in order to give the go-ahead. Were you aware 8 of these things? 9 A. I can't remember the detail, but that would be a logical 10 way to conclude, yes. 11 Q. With that many meetings to take place, was it in essence 12 that they all had to be planned and the minutes prepared 13 in advance? 14 A. I believe so, yes. 15 Q. So when we see on this screen here the note that all 16 present noted that adequate information had been 17 provided on which to competently proceed, in essence 18 a decision was made about that before 13 May? 19 A. Yes, that would be the formal conclusion to the -- 20 I suppose, the whole quality control process, yes. 21 Q. Were you involved in discussions in advance of the date 22 here, 13 May, to reach the conclusion and ensure that 23 everybody was of the view that adequate information was 24 available? 25 A. In specific and limited ways in the sense that, as 21 1 I think I mentioned previously, I wasn't involved in the 2 negotiations on the contract. I did oversee elements of 3 the close report and the process. So awareness of the 4 broad sweep of the documents that were required, but not 5 necessarily involved in the detailed discussions on 6 them. 7 Q. What work was done in advance of this meeting to reach 8 the conclusions that are expressed in this document? 9 Perhaps I should ask the other way round. Bear with me 10 one moment. 11 I take it the conclusions that you express in this 12 minute weren't simply reached on the day, 13 May? 13 A. No. No, no. 14 Q. So what work was done in advance of 13 May to get to 15 these conclusions in advance? 16 A. Well, I think this was really the culmination of in fact 17 many months of work. I mean, you could include in this 18 the whole negotiating process with the Infraco, but 19 leaving that to one side, we produced, I think, the 20 first draft of at least some of the final documents in 21 January 2008, and there were a number of iterations 22 following that time through to the version which was 23 eventually signed off at this stage; and throughout that 24 period, the negotiation on some key issues was 25 continuing, which meant that some, not all, but some of 22 1 the terms in the documents and in the contract were 2 changing because of the outcomes of the negotiations. 3 So I would say it was a rolling process really to 4 make sure that the full set of documents that was 5 finally arrived at at this stage had been properly 6 compiled and reflected what people expected they should 7 reflect. 8 Q. But reaching the view that we see expressed in the 9 second line of that minute there, that adequate 10 information had been provided, was there in a sense 11 a separate meeting or separate emails where people 12 expressed a view: yes, we are satisfied that the 13 information is adequate. 14 A. No, I think the -- the piece that would probably address 15 the point you make is the way that the quality control 16 work was actually documented, as I mentioned. But 17 I don't think there was a separate meeting before this 18 meeting to consider the issues again in the sense of 19 that day or very close proximity to that day. 20 Q. Could we scroll down the first page here to get to the 21 paragraph above the signature. You see another 22 conclusion is expressed here that: 23 "It was concluded that procedures to ensure the 24 quality and acceptability of the terms of the Infraco 25 Contract Suite had been adequately executed and that the 23 1 tie Chairman should send the letter to the CEC 2 Chief Executive with the recommendation that completion 3 should proceed." 4 Dealing with that question there, that the 5 conclusion that the quality procedures had been 6 adequately implemented, reading it short, for you to 7 draft that minute in advance, you must have been 8 satisfied that that was the case; is that correct? 9 A. Yes. That is fair comment. However, it's also designed 10 to make sure that everybody else in the meeting was 11 addressing the same question. 12 For example, if someone felt that there was an 13 inadequacy to the procedures that had been followed or 14 there were major issues that were still outstanding, 15 then this was a final chance, if you like, to raise that 16 point. 17 So it's designed to achieve both ends. 18 Q. But was there an opportunity to raise that, or would the 19 management team attending that meeting really have taken 20 a view that: Mr Bissett has provided us with a minute 21 saying that there's adequate information, and that we 22 can conclude the quality control is accurate; therefore 23 it goes through on the nod, without anybody applying 24 their mind to it? 25 A. No, I certainly wouldn't say that any of the senior team 24 1 members on the list would put things through on the nod 2 just because I had written something down. They were 3 robust and professional characters. If there was an 4 issue, it would have been raised. 5 Q. From your involvement with corporate transactions, you 6 will be familiar with verification tables or 7 verification notes in which a record is kept of the 8 basis for every material statement of fact or opinion on 9 a sentence by sentence basis. 10 A. I am, yes. 11 Q. Nothing like that was prepared for the statements in the 12 various close suite of documents in the report to the 13 Council? 14 A. No, it wasn't. 15 Q. Was there any reason why that wasn't done? 16 A. I don't think it was considered. I think we felt that 17 that suite of quality control procedures which we've 18 discussed this morning was adequate to make sure that 19 the documents were in good shape. 20 Q. I referred earlier to the Approvals Committee. I would 21 like to take a look at the minute of that, please. It's 22 reference CEC01289240. We see this is headed "MEETING 23 OF tie AND TEL APPROVALS COMMITTEE TO CONFIRM THE 24 AUTHORITY TO PROCEED WITH COMPLETION OF THE INFRACO 25 CONTRACT SUITE". Again, it's got the same day, 25 1 13 May 2008? 2 A. I see that, yes. 3 Q. There are three attendees. You're not one of the 4 attendees at this meeting? 5 A. No, I think those three attendees are the members of 6 that Approvals Committee. 7 Q. But nonetheless, from the appearance of this, it looks 8 as if it's another minute that was prepared by you? 9 A. It does, yes. 10 Q. And would have been prepared in advance? 11 A. Indeed, yes. 12 Q. So if we scroll down and look under the heading "Infraco 13 contract", we can see that in advance you expressed the 14 conclusion that: 15 "The Committee and each member individually noted 16 that adequate information had been provided on which to 17 competently proceed." 18 Do you see that? 19 A. I see that, yes. 20 Q. Now, if you are making that essentially as a statement 21 in the minute presented to the meeting, was there ever 22 any consideration by the members of the committee as to 23 whether or not there was adequate information to 24 proceed? 25 A. Well, that minute, I think, would have been on the table 26 1 when the meeting took place. As you'll be aware, 2 they're very often used as an agenda for the meeting. 3 So again, I would say if it was written in the 4 expectation that by that stage, there wouldn't be any 5 issues because one would have hoped to have heard of 6 them before this stage, but that was a final opportunity 7 where if someone felt that what was in the minute wasn't 8 supportable, they had the opportunity to raise that 9 matter. 10 Q. Do you think that was a realistic opportunity to raise 11 that, or, on 13 May, when everything had to be done to 12 get to signature, was it essentially a conveyor belt 13 decision, a process which had to be done to get to 14 completion? 15 A. I think the opportunity in real terms did exist, but 16 I would say by that stage, given the amount of work and 17 the amount of discussion that had already taken place, 18 it would have been a surprise if someone had raised an 19 issue at this very late stage that hadn't been raised 20 earlier. So it didn't preclude it, but nor was there 21 any expectation that we would have another debate on any 22 particular matter. 23 Q. This was a day on which it was intended by all parties, 24 by which I mean the Council, tie, the Project Board, and 25 the contractors, that the contracts were going to be 27 1 executed? 2 A. Yes. 3 Q. If someone had said at one of these meetings: I'm not 4 sure that adequate information had been provided; that 5 would have derailed the entire process? 6 A. It could have, but that's happened before and that 7 opportunity existed. 8 Q. But in reality, the way that has to be avoided, and 9 assuming everybody does want to avoid it, is all the 10 work has to be done in advance? 11 A. Indeed, yes. 12 Q. I come back to: was there any record of the work having 13 been done in advance by this Approvals Committee to 14 record their satisfaction and the basis of their 15 satisfaction? 16 A. I'm afraid I don't recall any records being tabled at 17 that meeting. 18 Q. If I could ask you to look at another document, please. 19 It's CEC01515189. This is a minute of a meeting of the 20 Tram Project Board -- sorry, it is headed "Tram Project 21 Board", and if we see the heading, it notes underneath 22 that, it is a resolution of the members of the Tram 23 Project Board at a meeting on 23 January 2008, held 24 jointly with the Boards of tie Ltd and Transport 25 Edinburgh Limited? 28 1 A. I see that. 2 Q. Are you familiar with this document? 3 A. I'm pretty sure I would have seen it at the time, but 4 I can't recall specifically, I'm afraid. 5 Q. If you take it from me there are corresponding documents 6 of the same date appearing to be from the tie Board and 7 the TEL Board, just for completeness? 8 A. Okay. 9 Q. If we look down to the delegated authority reference at 10 the foot of the screen, paragraph 4 says: 11 "To approve the proposed delegated authority 12 arrangements to be adopted in order to ensure an 13 efficient and properly controlled process was followed 14 through to contractual commitment and during project 15 implementation: 16 "The delegated authority arrangements proposed and 17 approved were ..." 18 We see what it says: 19 "A Committee of the Boards of the Company, the Tram 20 Project Board and tie Limited would be immediately formed 21 comprising Messrs Gallagher, Mackay and Renilson, to 22 whom authority is delegated to approve final execution 23 by the tie Chairman of Notification to Award, the 24 Infraco Contract Suite, and any necessary related 25 agreements on condition that ..." 29 1 The first condition is: 2 "The final terms of the contractual arrangements are 3 within the terms of the Final Business Case, subject to 4 slippage of up to one month in programmed revenue 5 services ..." 6 And 2: 7 "They unanimously conclude that it is appropriate to 8 do so; and 9 "3. Approval has been received from the CEC 10 Chief Executive to proceed to execution of the Infraco 11 Contract Suite." 12 Do you see that? 13 A. I see that, yes. 14 Q. Did you understand these three things as being the 15 matters of which the Approvals Committee had to be 16 satisfied before they should recommend conclusion of the 17 contract? 18 A. That seems to be clearly stated, yes. 19 Q. Now, in the minute that you have drafted, it is inherent 20 in it that the three-man committee concluded it is 21 appropriate to conclude or to enter into the contract? 22 A. If they approved that minute, that would be the 23 conclusion, yes. 24 Q. There is no express mention in your draft minute for the 25 Approvals Committee, and we can go back to it if you 30 1 would like, of a consideration of whether the 2 contractual arrangements are within the terms of the 3 Final Business Case. Would you agree with that? 4 A. That seems to be the case, yes. 5 Q. Are you aware whether or not a separate exercise had 6 been carried out by the Approvals Committee to assess 7 whether the Contract Suite was within the terms of the 8 Final Business Case? 9 A. I'm not aware of any additional process having been 10 carried out. 11 Q. Were you aware of whether or not that process was ever 12 carried out at all? 13 A. Not in the sense of a specific process, but the people, 14 the members of that committee would be, I would expect, 15 fully knowledgeable about the content of the Final 16 Business Case and the close report documents, and that, 17 I would think, would be the documents they would use to 18 conclude with respect to that matter. I can't speak for 19 them, obviously, but that's what I would understand had 20 happened. 21 Q. We heard evidence from the three members of the 22 committee. It was your understanding of the person who 23 had prepared the minute, and you didn't include 24 consideration of that matter, it was your understanding 25 it had been dealt with separately? 31 1 A. Yes, and any other issues that were relevant to the 2 meeting that I did prepare the draft minute for. 3 MR LAKE: I understand. 4 Thank you, Mr Bissett. It's not been many 5 questions, but that's all I have to ask this morning. 6 A. Okay, thank you. 7 CHAIR OF THE INQUIRY: I don't think there are any issues. 8 Thank you very much, Mr Bissett, you're free to go, and 9 hopefully we won't call you again. 10 A. Thank you. 11 (The witness withdrew) 12 MR LAKE: My Lord, the next witness is Mr Dawson, 13 Bob Dawson. However, he is coming up from the London 14 area and will not be with us until 2 o'clock this 15 afternoon. So I move that we adjourn until then. 16 CHAIR OF THE INQUIRY: Yes. Should we aim to start again at 17 1.45, at least if people are back for then, because 18 I would anticipate if he's expecting to be here by 2.00, 19 he might actually be here a bit earlier. I'm just a bit 20 concerned that we have got enough time in the afternoon 21 to finish him. 22 MR LAKE: I'm entirely happy to start at 1.45. 23 CHAIR OF THE INQUIRY: We will adjourn until 1.45 in the 24 hope that Mr Dawson arrives, and we will sit as soon as 25 he is here after that time. 32 1 (10.13 am) 2 (The short adjournment) 3 (1.45 pm) 4 CHAIR OF THE INQUIRY: Yes, Mr Lake. I think the witness is 5 now ready. 6 MR LAKE: Yes, my Lord. Mr Dawson is here. 7 MR ROBERT DAWSON (affirmed) 8 Examination by MR LAKE 9 CHAIR OF THE INQUIRY: Mr Dawson, you are going to be asked 10 some questions by Mr Lake, who is Counsel to the 11 Inquiry. If you simply listen to the question and 12 answer it as directly as possible. If you speak into 13 the microphone so everyone can hear what you're saying, 14 and speak slowly as the shorthand writers have to keep 15 up with you. 16 A. Okay. 17 MR LAKE: Mr Dawson, could you state your full name, please. 18 A. Robert John Dawson. 19 Q. Thank you. Now, I would like you to look at this 20 document, please. It will be shown on the screen to 21 your right, but you will have a hard copy in front of 22 you. It's reference TRI00000032_C. 23 That's exactly the same copy as you have in hard 24 copy? 25 A. Yes. 33 1 Q. I think if you look -- it's page 54 of the electronic 2 version, the last page of the paper one. You will see 3 it's got your signature on it and the date of 4 9 April 2017. 5 A. Yes. 6 Q. Is this a set of questions and answers which you 7 prepared for the Inquiry in the course of last year? 8 A. Yes. 9 Q. Are you content that that part of it be accepted as your 10 evidence for the purposes of this Inquiry? 11 A. Yes. 12 Q. I would now like you to look at a second document. It's 13 available only in paper copy. It's headed 14 "Bob Dawson -- supplementary notes of questions". It 15 says underneath it "Responses in blue". Do you have 16 that available to you? 17 A. I do, yes. 18 Q. I think you were set questions and you added your 19 answers which appear in blue, at the start of this year? 20 A. Yes, that's correct. 21 Q. Now, we can see there's a watermark on it noting that 22 it's draft? 23 A. Yes. 24 Q. You didn't develop it further to get to a fully final 25 version, but nonetheless have you had a chance to 34 1 consider it, and are you content that it accurately 2 represents your evidence? 3 A. What -- I put "draft" across it because at that stage 4 I was anticipating a meeting with Gordon McNicoll or 5 Mr Duffy, because that was the process that roughly 6 I went through previously with the -- with the witness 7 taker previously. So there was a couple of queries that 8 I had, or at least one query that I had that 9 I anticipated discussing with them in relation to 10 question 5. 11 Q. That's whether or not your knowledge of the Wiesbaden 12 Agreement at the date you first drafted -- you prepared 13 the first draft of Part 4 of the Schedule? 14 A. That's correct. I certainly -- sorry. 15 Q. Carry on. 16 A. I certainly hadn't been involved in detail with the 17 Wiesbaden Agreement. I don't actually recollect seeing 18 it at the time. The statement there says it is apparent 19 that I had received it, and I don't remember seeing it, 20 and the work that I did on Schedule 4 was over the 21 weekend, and I don't know whether I didn't look at it 22 because I had agreed with Geoff Gilbert that I wouldn't 23 look at the Wiesbaden Agreement, or I said I would only 24 do it on the basis that I looked at the figures. 25 But my email is quite specific, because I said I've 35 1 incorporated the figures from the email, or words to 2 that effect. So that was the only anomaly I had in 3 connection with that question, and I think I had 4 a grammatical error on question 11 as well, looking at 5 it. 6 Q. That's on page 5 on the electronic version? 7 A. That's correct. I think I have "was" and "this" round 8 the wrong way. 9 Q. It is just two words transposed, I think you said, right 10 at the end? 11 A. Yes. 12 Q. In relation to the Wiesbaden Agreement, what I would 13 like to do is ask you some additional questions now, and 14 one of the emails I would like to look at is the one 15 around about that time. So we can put it in context 16 when we get there. 17 First of all, starting with the more general 18 matters, which you have explained to some extent in your 19 statement, but just for clarity, your role at tie was 20 procurement manager? 21 A. That's correct. 22 Q. And I think you left late March 2008? 23 A. Yes. 24 Q. You reported to Geoff Gilbert? 25 A. Yes. 36 1 Q. Now, in the conduct of your role as procurement manager, 2 were you involved working with the solicitors who were 3 advising DLA? 4 A. Yes, I was. 5 Q. Who were the individuals you worked with? 6 A. Andrew Fitchie, Philip Hecht, Sharon -- Sharon someone. 7 Q. Fitzgerald? 8 A. Sharon Fitzgerald, and there were a couple of other 9 associates as well at some stage, but they were the main 10 three. 11 Q. What was their role in relation to the contract? What 12 were they doing with you? 13 A. Sharon was initially heavily involved, and we were just 14 agreeing changes to the contract. It was already 15 drafted when I first arrived, but it needed some 16 revisions. 17 But she then was -- her role was then taken over by 18 Andrew Fitchie, and Philip Hecht supported him. 19 Q. As you know, you've been asked certain questions about 20 Part 4 of the Schedule? 21 A. Yes. 22 Q. The Infraco contract concerned pricing, and we have seen 23 from the evidence, the Inquiry has heard evidence that 24 that was developed between about January 2008 and 25 contract signature in May? 37 1 A. Yes. 2 Q. Were representatives from DLA involved in that drafting 3 exercise to your recollection? 4 A. Yes, that would have been -- Andrew Fitchie and 5 Philip Hecht were involved at that stage. 6 Q. What was their role in drafting? Were they actually 7 coming up with the wording or giving you advice on 8 wording or what? 9 A. Well, I wasn't heavily involved in that, because I was 10 due to be leaving from then, but I think they were -- 11 they were involved in advising on the wording, 12 certainly. 13 Q. I'll come back and ask you some specific questions in 14 relation to certain emails? 15 A. Okay. 16 Q. Just stepping back a little bit, before we turn to the 17 genesis of Part 4 of the Schedule, I think you accept in 18 your original statement that price certainty was 19 something that was wanted from the Infraco contract? 20 A. Yes. 21 Q. If I could ask you to look at an email that you sent, 22 please, it's reference CEC01649280. 23 It will appear on the screen to your right. 24 If I could ask you to look -- it's the email that 25 begins just about halfway down this first page. You see 38 1 the email from you to Andy Steel, re Infraco 2 procurement, where you note that: 3 "The meetings that Matthew, Susan, Geoff and 4 Alastair are having are 'high level' issues and getting 5 the price down. 6 "The rest of us still need to press on resolving 7 necessary detail. I doubt we'll get everything done, so 8 each of us will need to prioritise, liaising with JP to 9 take account of the issues that might have the biggest 10 price variable." 11 Who is JP, can you recall? 12 A. John Pantony, perhaps. 13 Q. What was his role? 14 A. He was a quantity surveyor working on commercial 15 matters. 16 CHAIR OF THE INQUIRY: Sorry, what -- 17 A. I take it that's who it was. I haven't seen this 18 recently. So ... 19 CHAIR OF THE INQUIRY: What did you say his surname was? 20 A. Pantony. I think -- well, I assume that's who it was. 21 I must admit, I can't remember. 22 CHAIR OF THE INQUIRY: Do you know how to spell it? 23 A. I think it's how it sounded. P-A-N-T-O-N-Y. 24 Q. If we look at the following paragraph in your email, we 25 see you say: 39 1 "I have a concern that although we may have firm 2 rates for many items, the extent of unresolved design or 3 specification issues, together with the timescale for 4 execution, does mean that the variable element of bids 5 may be greater than we would like and also any 'clear 6 water' between the Infraco Bidders, making selection of 7 Preferred Bidder difficult." 8 Now, the areas -- the extent of unresolved design, 9 what effect was that having on the ability to obtain 10 a certain price? 11 A. Well, I can't recall the detail. I'm not sure if I even 12 knew it myself personally, but the design was -- wasn't 13 progressed as far as it should have been at that time. 14 But this is quite a lot -- a long way before the 15 final deal was done. So there was opportunities still 16 for the design to be improved during that time which was 17 another strand of work that would have been ongoing. 18 Q. Do you think -- to your knowledge, was the design 19 improved? Did the design become more complete by the 20 time you had to seek prices from the contractors? 21 A. Well, it would have been. I can't recall the detail of 22 that, but there was -- 23 Q. Do you recall there being any problem with the 24 progression of the procurement process as a result of 25 the state of design? 40 1 A. Well, that was the reason for Schedule 4 largely, to put 2 a line in the sand as to where we were at that stage. 3 Recognising -- so there was a firm basis for a firm 4 design albeit that some of that design might move 5 slightly thereafter. Or perhaps more than slightly. 6 Q. If you wanted to get a firm line -- a line in the sand 7 for design, so that the contractors could price, that 8 then raised a difficulty of what if the design developed 9 further after that date, who was to bear the liability 10 for that. Do you understand? 11 A. I do understand that, yes. 12 Q. Do you know what arrangements were put in place for who 13 was to bear the liability if the design developed 14 further after the line in the sand? 15 A. The intention was for the design development to be at 16 Infraco's risk, but I'm not -- but the element of -- of 17 what constitutes design development was obviously 18 a difficult thing to resolve. 19 CHAIR OF THE INQUIRY: I wonder if you could speak a bit 20 closer to the microphone. 21 A. I just realised that as I said that. 22 MR LAKE: In your time, you said you left at the end of 23 March, but in your time the procurement of the 24 infrastructure contract, was your view that a fixed 25 price was being obtained for that? 41 1 A. It was fixed for the information that was available. So 2 that if the -- if it changed, then that was the reason 3 for Bilfinger Berger wanting Schedule 4, because 4 obviously they did the due diligence. They were not 5 satisfied with quite a number of areas of the design. 6 Q. That was the due diligence report that was prepared and 7 given to them by January 2008? 8 A. Yes. 9 Q. It noted that the design was still a long way short of 10 complete? 11 A. Yes. 12 Q. That being the case, did it appear to you that there 13 would be changes in the design from the one that had 14 been priced by the consortium? 15 A. Yes. 16 Q. At the risk of repeating myself, what was your 17 understanding as to who was to bear the financial 18 consequence of that? 19 A. Well, it would -- it was coming down to this design 20 development. If something -- well, and how much of it 21 was -- was geared to a specific item. 22 What Bilfinger Berger were trying to do was get 23 a lot of detail on certain aspects, so that it might be 24 the -- the base of the -- sub-base under the track or 25 something like that, and they would say it was a certain 42 1 depth, and if it changed from that, they would expect 2 a change. 3 Q. Did you form a view as procurement manager as to what 4 extent of change was likely to arise? 5 A. No. 6 Q. Were you discussing this matter to what extent there 7 might be change with any other parties involved in the 8 procurement? 9 A. Yes, I was. 10 Q. Who were you discussing it with? 11 A. Geoff Gilbert, Andrew Fitchie, Dennis Murray. 12 Q. What was their understanding of the position? Was it 13 any different than yours? 14 A. I think they had concerns, but they were, you know, 15 trying to seek resolution of it. There was a lot of 16 meetings that took place after the -- the first draft of 17 Schedule 4, to close down some of those -- those issues. 18 Q. We will come back to Schedule 4 in more detail, but in 19 general as it was being negotiated, did you or were you 20 aware that anybody else at tie got advice from 21 Andrew Fitchie to the extent that Schedule Part 4 22 created a large liability for tie? 23 A. Well, the intention was to try and resolve things so 24 that it was a clear basis that both parties could be 25 happy with. I think it transpired that Bilfinger Berger 43 1 got the -- got their way more than tie. 2 CHAIR OF THE INQUIRY: I think the question was: did you or 3 anyone else at tie get advice from Mr Fitchie to the 4 extent that Schedule Part 4 created a large liability 5 for tie? 6 A. I am not sure whether anybody specifically asked that 7 question. 8 CHAIR OF THE INQUIRY: Well, you don't have to ask questions 9 to get advice. Advice can be tendered or volunteered. 10 All we want to know is did you get advice or were you 11 aware of anyone else in tie getting advice from 12 Mr Fitchie about the risk associated -- 13 A. I'm not directly aware what was said to the senior 14 leadership team. 15 CHAIR OF THE INQUIRY: Well, did you get any such advice? 16 A. I don't recall directly. 17 MR LAKE: I just want to look at how the design work fitted 18 with other aspects of the contract. We've heard there 19 was going to be design work, a utilities contract, the 20 MUDFA contract, the contract for vehicles, and 21 a contract to put in the infrastructure works. 22 A. Yes. 23 Q. Particularly looking at design on the one hand and the 24 utilities work on the other, which had to come first or 25 how did the two relate to one other? Did you deal with 44 1 that? 2 A. I didn't deal with the design contract or the MUDFA 3 contract. You would have had to have had the design 4 work done beforehand, so that you knew where the tracks 5 were going, so you know what services to divert. So 6 that would have been the logical chronology. 7 Q. While you were working towards the contract close, did 8 you ever form a view or have a concern that the contract 9 did not appear to be achieving the goals of the 10 procurement strategy to get a fixed price? 11 A. Yes. 12 Q. When did you have that concern? 13 A. From the time that I drafted the initial draft of 14 Schedule 4. 15 Q. During mid-January? 16 A. Yes. 17 Q. Did you discuss those concerns? 18 A. Yes. 19 Q. Who did you discuss them with? 20 A. Geoff Gilbert initially. And I would have discussed 21 them also with Dennis Murray and Andrew Fitchie, and 22 others as well, as you can see from the other subsequent 23 email trail. 24 Q. What was done about your concerns? 25 A. Well, there was a series of meetings set up after that 45 1 to try and resolve the main issues which I outlined were 2 the ground conditions, the track slab, there was 3 utilities issues. So there was a series of working 4 parties that was set up following my initial draft of 5 Schedule 4 which outlined a number of concerns in red 6 or -- not concerns, things that I was unaware of, but 7 I think did transpire to be concerns because they didn't 8 get resolved readily. 9 Q. Was anything done to try and resolve your concerns? 10 A. Yes, those meetings were. 11 Q. Those are internal tie meetings? 12 A. They were internal tie meetings and they also included 13 meetings with Infraco as well. 14 Q. Did other people within tie accept your concerns as 15 being valid concerns or -- 16 A. Yes. Well, yes, otherwise they wouldn't have had the 17 meetings. 18 Q. So if you were concerned that as a result of your first 19 draft of Schedule Part 4, you wouldn't be achieving the 20 objectives of the strategy, can I ask -- 21 A. Well, when I say not achieving, things had to be done to 22 make sure that it could be. And clearly -- well, we had 23 to have resolution, so that if there was design 24 uncertainty, we came to a position that was robust 25 enough to not change significantly. That was the 46 1 intention, certainly. 2 Q. How was that to be achieved? How was that to be taken 3 forward? 4 A. Well, there was initial design work. There was still 5 a -- several weeks from when I first raised those 6 concerns to the actual contract close for some of those 7 things to be -- to be closed out. So that you knew what 8 depth of sub-base, or you knew what the -- or had 9 a better understanding of what the ground conditions 10 position was. 11 Q. In that regard, where did matters lie when you left the 12 company at the end of March? Had the designs been taken 13 to an extent -- your concern was resolved or -- 14 A. I -- well, no, there was still ongoing issues because it 15 wasn't resolved at that stage. I suspect there was an 16 improvement, but I don't know to what extent, and 17 clearly it transpired that it wasn't sufficiently 18 resolved. But I wasn't involved in detail during that 19 stage. 20 After -- it was intended originally that I would 21 leave at the end of 2007. And I stayed on just for 22 continuity and support as the preferred bidder hadn't 23 gone smoothly as it was hoped. 24 Q. I think Geoff Gilbert's role was also procurement, and 25 he was envisaging that he would leave by about the time 47 1 the contracts were concluded. Was that your 2 understanding? 3 A. It was my understanding he was going to stay on until 4 they were concluded. 5 Q. So who was to provide continuity then between the time 6 before the contracts and the time after? 7 A. Dennis Murray, who was taking over from Geoff Gilbert. 8 Q. What was his role in relation to the concerns that 9 you've described? 10 A. Well, his role was to -- to assist in the final 11 closeout, because obviously he was going to be taking 12 the -- the project forward. So he was going to be -- he 13 intended to be leading on Schedule 4. At one stage. 14 Q. Leading in what way? 15 A. Well, so that, you know, there was a sufficiently robust 16 contract to administer the contract post -- post -- post 17 award. 18 Q. You said he was intended to be leading at one stage. 19 Was that because there was a change as to who was to be 20 leading? 21 A. Well, I don't know what happened after I left. 22 Q. The Inquiry may have heard from Mr Murray that he felt 23 he was only there with purely a watching brief, because 24 he had just arrived, and his job was really to be 25 commercial manager after the contract was in place. He 48 1 didn't really have a role in conclusion of the contract. 2 What would you say to that? 3 A. He was -- well, I am not sure precisely when he started. 4 It was around the turn of the year in -- and he was the 5 Commercial Director -- 6 Q. Sorry, Commercial Director rather than manager? 7 A. So ultimately he would have been responsible going 8 forward. So he would want to make sure it's on a robust 9 basis because that was going to be his project. 10 Q. I think originally the intention had been that the 11 contract itself would be concluded in January 2008. 12 A. Well, that was the intention, but it wasn't achieved. 13 Q. No. But Mr Murray was therefore arriving at a time when 14 he was saying he thought the contract was going to be 15 concluded, he didn't have a role in conclusion of the 16 contract. He wasn't intended to have it? 17 A. He may not have been intended at the time he was 18 appointed, but it was my understanding as of that time 19 that he was going to be taking it forward. 20 Q. Coming back to your concern for a moment, you said that 21 a part of the way your concern would be addressed was 22 trying to take forward the design so that it was more 23 complete. 24 A. Yes. 25 Q. Was your concern to be addressed by drafting the 49 1 contract at all? 2 A. Well, certain parts could have been, but really it did 3 need the design to be done. You've got to have the 4 design to be able to know what you're building. So ... 5 so it did require design being run in parallel with 6 negotiations of an acceptable position. 7 Q. If you really need the design to know what you're 8 building, and you're in a state where you haven't got 9 the completed design, would you normally just go ahead 10 and conclude the contract anyway? 11 A. Well, it would depend on the extent of design that was 12 still to be concluded, and whether it was fundamental to 13 the programming or it was something minor. 14 Something significant in terms of the ground, which 15 was going to be the first thing that would be commenced, 16 would be significant; if it was detail in relation to 17 a roof of a substation, it would be less critical. But 18 I think there was a concern at the programme for design 19 as well. 20 Q. What was the concern? 21 A. Well, the -- the programme just didn't fit at one stage. 22 I think it uses the term "negative float". 23 Q. Which means that the design is too late? 24 A. Yes, absolutely. It means that it doesn't work. Float 25 is slack, so if it's negative, you haven't got it. One 50 1 activity on the critical path completes before the other 2 one starts. 3 Q. That's known while you were still at the company, so 4 prior to the end of March? 5 A. Yes. 6 Q. When you were leaving at the end of March, what was your 7 understanding as to the state of design at that time? 8 A. I think that quite a bit needed to be done. I didn't 9 anticipate things would be closed out for several 10 months. 11 Q. That's what I was coming to then. Knowing what the 12 history had been in relation to design and design 13 completion, did it seem to you to be realistic that the 14 design would be sufficiently concluded within a couple 15 of months to get a fixed price? 16 A. I wasn't close enough to the design to make that full 17 judgement, but -- 18 Q. Were you having discussions with any of your colleagues 19 as to whether or not it would be sufficiently complete 20 in that regard? Because it must have been a concern for 21 procurement generally? 22 A. Well, yes, it was, but I say, I was due to be going. So 23 I didn't know quite what was happening on the design. 24 Q. How long were you with tie altogether? 25 A. In total about 20 months. I started in the August of 51 1 2006. 2 Q. So by the time you were leaving in the early part of 3 2008, albeit you were going to leave, you had 4 accumulated quite some experience in relation to the 5 procurement of the contract? 6 A. Yes. 7 Q. Was there not a desire to take advantage of your 8 accumulated expertise and assist in reaching a view as 9 to whether or not really tie was in a position to 10 conclude a contract that met the requirements of the 11 strategy? 12 A. I -- but I wasn't involved in detail in the design. 13 I -- I didn't know the line of the route intimately and 14 stuff like that. There was a limit to how much 15 knowledge you can have on a major project. 16 Q. Was anybody to your knowledge responsible for 17 considering that issue; that is: would there be enough 18 information to have a fixed price contract? 19 A. Well, there was a design manager within tie and there 20 were other people looking at the design in more detail 21 from an engineering point of view. 22 Q. People were looking at the design, but was anybody in 23 a position to say: we're not going to be able to get 24 a fixed price contract with this design? 25 A. I don't think that was actually said at that stage, but 52 1 the anticipation would be that it would be at some point 2 in time. But as I say, I didn't feel from what I knew 3 that it was going to be achieved any time soon as 4 I left. 5 Q. I think in one of your statements, you note that around 6 about the end of 2007, you forwarded papers and a chart 7 to DLA for the purposes of them to draft a new version 8 of Clause 80, the Changes Clause in the Infraco 9 contract. Do you recall involvement with this? 10 A. I recall something being mentioned about that. 11 I couldn't remember when it was. 12 Q. I'll show you -- look at the email to make it a bit 13 easier. If we could look, please, at reference 14 TIE00898202. You will see this is an email from you to 15 Trudi Craggs who worked at tie: 16 "Trudi, further to our meeting this morning, 17 I checked the latest draft contract for Clause 80 (tie 18 Changes) and it was left blank as Geoff has recently 19 produced the attached paper to inform DLA Piper's 20 re-drafting. 21 "Also attached is a copy of my draft flow chart 22 which was used in the previous draft of Clause 80." 23 Did you carry on having an involvement with 24 Clause 80 after 17 December 2007? 25 A. I don't recall being involved after that stage. But 53 1 I had forgotten this one, to be honest. 2 Q. It's been suggested that Geoff Gilbert redrafted 3 Clause 80 right at the last minute. Were you aware of 4 any later redrafts by Geoff Gilbert in relation to this 5 clause? 6 A. I don't recall. 7 Q. Okay. I have finished with that production. 8 I would like to turn to a little bit of the detail 9 about Part 4 of the Schedule, and start by looking at an 10 email with reference CEC01495585. This is an email of 11 13 January that you sent to Geoff Gilbert and copied to 12 Stewart McGarrity? 13 A. Yes, okay. 14 Q. I take it you've recognised this email? 15 A. Yes. 16 Q. You said there: 17 "Geoff, as just discussed, I done an initial draft 18 of the above as requested. 19 "I have incorporated the figures from the email 20 titled "Wiesbaden Deal" that you sent me on Wednesday 21 9 January 2008 but I'll need to have your input on a few 22 things that I don't know the background to and I have 23 made a few comments in red. 24 "Unfortunately I can't attach it ... for some reason 25 but I'll try and send it from my home email. If all 54 1 else fails I will be up on the 6.30 am flight tomorrow 2 (weather permitting)." 3 You make the point in your supplementary statement 4 that that doesn't say that you've seen the Wiesbaden 5 Agreement; it just says you had figures from an email 6 that you had been sent? 7 A. Yes. 8 Q. So you can't be sure whether or not you had seen the 9 agreement at that time? 10 A. No. 11 Q. If we look at the -- 12 A. That was my point around the question 5. So I don't 13 want to say I didn't see it, but I did that over the 14 weekend because that was the Sunday. So I was asked to 15 do it late on Friday. So I don't know whether Geoff 16 said: don't bother with the Wiesbaden deal; or 17 I said: I'm only doing it without looking at the 18 Wiesbaden deal. I honestly can't remember which way 19 round it was, but I did say specifically that it related 20 to the figures. 21 Q. If we look at the email sending the draft, it's 22 reference CEC01447445. This is a very brief one. It's 23 on the same day, 13 January? 24 A. Yes, for some reason I couldn't attach it remotely on 25 my -- tie, because I had a remote log in. For some 55 1 reason it wouldn't connect. So I sent it from my 2 personal email. 3 Q. So this is your personal email account? 4 A. Yes. 5 Q. If we look at the attachment to that, it's reference 6 CEC01447446. We can see that this is the document with 7 the title page, "Schedule 4 CONTRACT PRICE ANALYSIS"? 8 A. Yes. 9 Q. This is what was drafted by you? 10 A. Yes. 11 Q. If we go to the second page of this, please. We can see 12 a contents. A rough idea of matters it was to deal 13 with. Provisional sums, provisional quantities, value 14 engineering, tie changes under third party agreements, 15 transfer of MUDFA scope, et cetera. 16 Who informed you of what the subject matter and 17 scope of this part of the schedule was to be? 18 A. I can't recall. I don't know whether I was informed or 19 whether I just picked things up and drafted them. 20 I honestly can't remember. If it was something else in 21 the email chain, I mean, I haven't got access to that. 22 Whether it was -- I can't remember. 23 Q. You can't remember being given a briefing or anything 24 like that? 25 A. Well, I was asked to do it late on the Friday. 56 1 I literally, I can't remember whether I was given 2 anything else, or whether I picked these things up from 3 a document or whatever. I mean, I think it is fairly -- 4 it's reasonably comprehensive, I think, for something 5 that was done at short notice over the weekend. 6 Q. In the earlier email we looked at, you referred to the 7 email entitled "Wiesbaden deal". Can you recall now 8 what did you know about the Wiesbaden deal? 9 A. I knew that Willie Gallagher had gone across to 10 Wiesbaden to have a meeting with senior representatives 11 from Bilfinger Berger, potentially Siemens. I know at 12 one stage that Geoff Gilbert and Matthew Crosse were due 13 to go. I know Geoff Gilbert didn't. I wasn't sure 14 about Matthew Crosse. 15 So I wasn't involved in the detailed discussions on 16 the Wiesbaden Agreement. In fact I don't even know if 17 it was called the Wiesbaden Agreement at that stage. 18 I don't recall. I remember being consulted about the 19 Wiesbaden Agreement, and I had no recollection of it -- 20 subsequently -- as part of the Inquiry. And I just 21 don't remember it. 22 Q. Okay. Were you given any information or told what 23 relevance the Wiesbaden Agreement had or might have to 24 Part 4 of the Schedule? 25 A. I don't think I was. It was prepared at short notice, 57 1 and I looked at the figures, and I was just trying to 2 get some clarity around the figures as to what they 3 would be based on. 4 So I -- I honestly don't recall. 5 Q. I just want to stick with this just a bit longer yet? 6 A. Yes, fine. 7 Q. Were you told that the terms of Part 4 of the Schedule 8 were to be dictated by the Wiesbaden Agreement at any 9 time, not just on 13 January, but at any time while you 10 were there, were you told that Schedule Part 4 was 11 dictated by the Wiesbaden Agreement? 12 A. I don't recall. Sorry. 13 Q. When you say you don't recall, does that mean you don't 14 recall whether or not it was said or you have no 15 recollection about this? 16 A. I have no recollection. Sorry. I wasn't dealing with 17 it. It wasn't part of my main work. So I -- I was, you 18 know, doing -- you know, things here and there on an 19 ad hoc basis almost, and I just don't recall. 20 Q. You said there you weren't dealing with it. What 21 weren't you dealing with? 22 A. Well, I didn't have a core role leading on stuff after 23 the end of 2007. I was due to be leaving at the end of 24 2007 originally, previously, and I was asked to stay on, 25 and I wasn't -- I was almost like on the subs bench 58 1 effectively. I wasn't leading things and I was just 2 doing things on a more of an ad hoc basis. I was still 3 involved, but not -- not heavily. 4 Q. But in relation to this part of drafting Schedule 5 Part 4, was it not in fact the case that you, together 6 with Geoff Gilbert and Dennis Murray, were the three 7 people who had responsibility for the negotiation of 8 Part 4 of the Schedule? 9 A. I didn't have responsibility for negotiation. No. 10 I drafted it initially. I did subsequent things on it 11 afterwards, but I didn't have responsibility for it, and 12 I was kept out of certain meetings, as you will see from 13 other emails. 14 Q. We will come to look at those. 15 Could I ask you to look at another email, though, at 16 the moment, reference CEC01431194. 17 This is an email from Graeme Bissett with a date of 18 25 March 2008. It's sent to Andrew Fitchie and various 19 personnel within tie. You will see you're one of the 20 people to whom it was cc'd. Do you see that? 21 A. Yes. 22 Q. The subject matter is Financial Close and QC programme. 23 Graeme Bissett says: 24 "Thank you for your time and input this am. For 25 those who have not been involved in this discussion to 59 1 date, the attached paper is a summary of the process we 2 intend to apply to ensure the Financial Close documents 3 are in robust shape." 4 Do you recall this email at all? 5 A. No. I haven't been given access to this as part of the 6 Inquiry. 7 Q. Can I, just understanding that, ask you nevertheless 8 some questions about it. 9 If we look at one of the attachments to this -- 10 A. Sorry, just in context, I was literally just about to 11 leave at that time. 12 Q. Yes. If we look at the first attachment to it, it's 13 reference CEC01431196. You can see a document here 14 headed "EDINBURGH TRAM PROJECT FINANCIAL CLOSE PROGRAMME 15 AND QC PROCESS". This was an attachment to the email. 16 If you don't recall the email, do I take it you don't 17 recall this attachment either? 18 A. No, I don't. 19 Q. If we look at the second page of this. Just above the 20 bullet point list, it notes that: 21 "The attached matrix sets out the detailed 22 responsibilities." 23 If we could then look at that matrix, it's reference 24 CEC01431195. We see here a spreadsheet with a heading 25 on the top left, "FINANCIAL CLOSE - QC PROCESS". Do you 60 1 see that? 2 A. I do, yes. 3 Q. Underneath that there's a sub-heading, "Documents", and 4 then highlighted in yellow, another sub-heading, 5 "Infraco Contract Suite". Do you see that? 6 A. I do, yes. 7 Q. If you read down to row 18, you will see the text, 8 "Principal schedules (in addition to above)". Three below 9 that, in row 21, it says "Pricing (Schedule 4)". Do you 10 see that also? 11 A. Yes, I do. 12 Q. In the column to the right of that, under the heading, 13 "Finalisation", the initials have been put in, GG, BD 14 and DM? 15 A. Yes. 16 Q. Now, the BD is presumably intended to be a reference to 17 you? 18 A. Yes, I would assume so. 19 Q. The GG would be Geoff Gilbert. DM, Dennis Murray? 20 A. Yes. 21 Q. Were you aware that the document was allocating to you 22 one part responsibility for finalisation of Part 4 of 23 the Schedule? 24 A. I don't recall seeing this, and if I had have seen it, 25 I would have said: look, guys, I'm going on -- whenever 61 1 it was. I'm not sure what day this was. I think it 2 would have been literally a day or two before I left. 3 So it was unrealistic to put me down there. I don't 4 know whether Graeme Bissett was aware I was leaving. 5 Q. Looking at the position that had existed between 6 13 January when you prepared the first draft and this 7 memo on 25 March, had you been part of the team 8 responsible for finalising Schedule Part 4? 9 A. I was involved, but I wasn't responsible for doing it. 10 I was doing things as requested or as I saw. 11 Q. Who -- well, take those two in turn. Firstly, who was 12 requesting you? 13 A. Geoff Gilbert or Dennis Murray, the two Commercial 14 Directors. 15 Q. When you say "or as I saw", that might suggest you were 16 still exercising some discretion on your own part to 17 decide where input was being required? 18 A. Well, I think that's probably when it comes on to that 19 email of -- 6 or 8 February, which I commented on. 20 I don't think I was asked to comment on it, but it had 21 come into my inbox. So I did. So that was an example 22 I was referring to. 23 Q. If we look at that email, it's reference CEC01546351. 24 Sorry, I have given you the wrong reference there. 25 My apologies. 62 1 Sorry, could you look at reference CEC00592614. 2 This is the one that I was looking for. If we look 3 at the lower half of this first page, you will see that 4 Scott McFadzen at Bilfinger has forwarded a draft of the 5 Pricing Assumptions to you -- 6 A. Yes. 7 Q. -- on 4 February? 8 A. Yes. 9 Q. Then, if we go up the page a little, you have then sent 10 this to Andrew Fitchie on 6 February? 11 A. Yes. 12 Q. Saying: 13 "Geoff says that we're meeting at your offices at 14 10.00 am to discuss the issue and thus I have forwarded 15 Scott McFadzen's email and BBS's Schedule 4 as an 16 attachment together with a further copy of BBS's 17 Schedule 4 with Tom Hickman's comments in pink and mine 18 in blue." 19 A. Yes. 20 Q. Firstly, you had had responsibility for forwarding it to 21 Andrew Fitchie? 22 A. I was asked to forward it to Andrew Fitchie, yes. 23 Q. Who asked you? 24 A. Well, Geoff Gilbert. 25 Q. The way you say "Geoff says that we're meeting at your 63 1 offices at 10.00 am", that suggests you would have been 2 involved in the meeting? 3 A. Yes. 4 Q. You also had prepared comments on the draft that had 5 been prepared? 6 A. I did prepare comments. I had looked at the -- the 7 schedule and I wasn't -- was unhappy with it and I -- 8 I was also concerned at some of the programming aspects, 9 so I asked Tom Hickman to look at it as well. 10 Q. He was part of the technical support services function? 11 A. He was the planner. 12 Q. Can we look at the attachment, please. It's got 13 reference CEC00592615. I think you said in your email 14 that your comments are the ones that are in blue. 15 A. Yes. 16 Q. Just looking -- we see the Base Date Design Information 17 definition at the start. It was to mean: 18 "[Save to the extent qualified by the Base Case 19 Assumptions,] the design issued to the Infraco on or 20 before 25 November 2007." 21 I'll stop reading there. Now, essentially that 22 would be the date of the design freeze that was used for 23 pricing purposes; is that correct? 24 A. That was the one they were intending to use, yes. 25 Q. Your comment is that: 64 1 "[This date is a bit early, other relevant 2 information will have been issued after, can we not just 3 refer to the schedule?]" 4 Was your concern that the design was already 5 changing and if you fixed it by 25 November, there were 6 going to be changes? 7 A. Yes. 8 Q. Now, if it was going to be the case that those changes 9 were the responsibility of the contractors, why was that 10 a concern to tie? 11 A. Well, because they were -- they were trying to link it 12 to specific issues, to specific details. They weren't 13 taking a blanket all design development at that stage. 14 That's why I flagged it up. 15 Q. Your concern here was that if something wasn't done to 16 change this, there was going to be a liability coming 17 back to tie? 18 A. That was my concern, yes, unless it was addressed some 19 other way. 20 Q. Were you aware of it ever having been addressed while 21 you were still there? 22 A. I think they were struggling to do it while I was still 23 there, yes. 24 Q. Why were they struggling? 25 A. Well, because they had a lot of design work to do. 65 1 I don't -- some might have been done, but my gut feel is 2 that it possibly wasn't. 3 Q. But no matter how much design work they did in the early 4 part of 2008, if the price was fixed by reference to 5 design at 25 November 2007, there was always going to be 6 a problem that tie would be liable for the additionals; 7 is that not correct? 8 A. Well, you could -- the theory, you would be negotiating 9 what that effect was. So if it was different, you might 10 agree there was an additional whatever figure that 11 needed to be added to the contract sum. 12 Q. So just to follow that through, are you saying you 13 envisage that a later date might in fact be used as 14 a result of further negotiations, but that that might 15 have an impact on the sum? 16 A. It would have, yes, potentially. And some could be up 17 or down because there was value engineering that was 18 being proposed as well. 19 Q. If we go to page 2, please, and the definition of Base 20 Case Assumptions, the Base Case Assumptions mean the 21 following assumptions: 22 "(a) that the Design prepared by the SDS Provider 23 will (i) be issued by the SDS Provider to Infraco Ready 24 for Construction." 25 I'll read past your comment for the moment: 66 1 "... by no later than the earlier of (1) four weeks 2 in advance of the Programme and (2) such longer periods 3 as shall be reasonably necessary to allow the Infraco to 4 procure plant and materials in sufficient time to carry 5 out and complete the Infraco Works in accordance with 6 the Programme." 7 The comment you have added after that is: 8 "This could be open-ended CONCERN: there is 9 a problem with 'negative float' between SDS programme V25 10 and Infraco programme." 11 Now, you explained what you mean by negative float. 12 A. As I said earlier, float is slack within the programme. 13 So that if there's an activity that's -- that is on the 14 critical path and there's slack between that and the 15 next activity, that is what is termed as float. 16 So if you've got a negative float, essentially your 17 programme doesn't work. You've got a dependency that 18 means that you can't have the -- you can't achieve the 19 critical path and the end date would move. So that just 20 didn't work. 21 Q. What concern does that give rise to in relation to 22 making an assumption about that for pricing purposes? 23 A. Well, if -- if your price is geared to a certain period, 24 and that would automatically trigger an extension of 25 time scenario. And that would have additional costs. 67 1 Q. Were you involved in any discussion about the size of 2 the potential additional cost with any person at tie? 3 A. No, I don't -- well, I don't recall. But my intention 4 was not to have the additional cost, was to get it so 5 that we didn't have additional cost. 6 Q. If we look over the following page -- 7 A. Because I just got the impression that they were just 8 trying to engineer an extension of time upfront. 9 Q. And you got that impression from -- 10 A. Because it was such a -- it was an earlier date. 11 Q. If we look now at page 3 in this, and we look at clause 12 (d)(ii), this is an assumption that in relation to 13 utilities: 14 "that the MUDFA Contractor shall have completed 15 all MUDFA Works in accordance with the MUDFA Completion 16 Programme." 17 Then your comment is: 18 "But what if they haven't? Infraco will then need 19 to do." 20 What was your concern there? 21 A. Well, it was inevitable that there might be -- it's not 22 inevitable. It was possible that not all MUDFA work 23 would be done, or there might be a decision to leave 24 something if it was going to create major disruption, 25 rather than digging up a road once, and then digging it 68 1 up again. So it was always a possibility that some 2 additional surfaces diversions would be required under 3 the Infraco contract. 4 So it may well be an additional cost, but then BBS 5 would still need to do it. 6 Q. Going forward now to page 8 within this, I'm interested 7 in clause 1.1. There's a draft clause here that: 8 "The Contract Price had been fixed on the basis of 9 inter alia the Base Case Assumptions. If now or at any 10 time the facts or circumstances differ in any way from 11 the Base Case Assumptions (or any of them) the Infraco 12 may (if it becomes aware of the same) notify tie of such 13 differences (a "Notified Departure")." 14 You have commented: 15 "Can't just be any departure or all risk will come 16 back to tie." 17 What did you mean by that? 18 A. Well, what I have said, basically. You know, there 19 needs to be some materiality to it. So that if it was 20 a significant variation, it might be correct that the 21 costs might come back to tie, but that was trying to get 22 absolutely every variation, no matter how small, as 23 a Notified Departure. And this sounded alarm bells 24 that, you know, everything was -- they were going to be 25 coming back for. 69 1 Q. For completeness, if we go back to page 2, and some of 2 the assumptions there, if we look at paragraphs (a)(ii), 3 (iii) and (iv), in each case you suggested that the word 4 "materially" be added? 5 A. Yes. 6 Q. Were you aware that that "materially" was revised out of 7 these drafts by the consortium? 8 A. Subsequently, yes. 9 Q. Did that give rise in your view to the situation that 10 had concerned you making your comment on 1.1, that it 11 was just any departure, and therefore all risk was 12 coming back to tie? 13 A. I don't know if I knew that -- that that had been taken 14 out at the time. 15 Q. Did you discuss your concerns behind these comments with 16 your colleagues? 17 A. Yes. 18 Q. Did that include Dennis Murray and Geoff Gilbert? 19 A. Yes. 20 Q. Did they share your concerns? 21 A. I -- I think Geoff was -- I raised a concern about the 22 design information and, you know, whether or not the 23 changes would have a significant effect or even change 24 the positioning of the bidders. And he said it was -- 25 it was going to occur whether we'd have had Tramlines or 70 1 Bilfinger Berger Siemens. 2 Q. So what was going to occur? 3 A. That there was problems with the design, so that the 4 price basis wasn't as robust as we would have liked. 5 Q. Whether or not it was going to happen with the other 6 contractor, did he seem concerned, did he share your 7 concern that it was going to happen, if you just carried 8 on as you were? 9 A. Well, I think he was aware of that -- the risk, yes. 10 But I think there was -- as I have said before, there 11 was a move to try and refine that as much as possible, 12 so that variable could be reduced, which is why it 13 wasn't closed out at that point in time. 14 Q. When you say you were going to refine the risks, that's 15 what you described already by trying to press ahead with 16 the design, so it was completed to a greater extent? 17 A. Yes. 18 Q. I have asked whether you discussed your concerns with 19 your colleagues. Did you discuss them with the legal 20 representatives from DLA? 21 A. Yes. 22 Q. Who? 23 A. Andrew Fitchie. 24 Q. What did he say in relation to them? 25 A. Well, I raised the point in relation to procurement 71 1 challenge as to whether that would affect the overall 2 standing. 3 Q. How did you raise your point in relation to procurement 4 challenge? 5 A. Well, because we -- there was a difference in the price 6 that was coming through from that -- that was initially 7 tendered. And if the price changes by more than 8 a certain margin, you should go back to all bidders. 9 Q. What I was thinking of more was the concerns that you 10 have expressed on this draft of Schedule Part 4, when 11 your concern is that you can't have all departure from 12 the design or the risk will come back to tie. Did you 13 discuss that concern with Andrew Fitchie? 14 A. Yes. 15 Q. Could you recall what he said in relation to it or what 16 he says should be done? 17 A. I'm sorry, I can't remember the detail of that. 18 Q. You don't recall there being any strategy as to how this 19 was to be dealt with in negotiation? 20 A. Well, I wasn't part of that strategy because that would 21 have been the senior leadership team sorting that out, 22 and I also raised it with Dennis Murray because he was 23 going to pick it up thereafter. 24 Q. Okay. I have finished with that document. 25 Now, I went there to the 6 February email because 72 1 you'd referred to it. And that's the one that had the 2 draft. But if we can just follow things through in 3 order, if I could go back to 16 January and ask you, 4 please, to look at an email with reference CEC00592608. 5 I'm looking at the second email on the page. It's one 6 from you to Scott McFadzen and Bilfinger and 7 Michael Flynn of Siemens, with the heading "Schedule 4 - 8 Pricing" on 16 January, and you say: 9 "Attached are our thoughts on the above. 10 "This is very much an outline framework and requires 11 some further work, particularly input and co-operation 12 from BBS. 13 "Please can you review so that we can discuss on 14 Friday?" 15 So you, having sent out your draft internally on 16 13 January, is this you then forwarding it to the other 17 side once it had been worked on within the company? 18 A. Yes, I don't know what subsequent changes might have 19 happened in the meantime. I cannot recall that. But 20 clearly some things weren't apparent from BBS. 21 Q. In terms of dealing with the Wiesbaden deal, could I ask 22 you to look at another email. This one reference 23 CEC01546351. 24 A. It's not on the screen. 25 Q. If we look at the first email, the upper part, we can 73 1 see it's from you. It's dated 6 February and it goes to 2 Andrew Fitchie, with the subject matter: forward 3 Wiesbaden Deal. Do you see that? 4 A. Yes. 5 Q. It says simply: 6 "Andrew, Geoff asked me to forward this to you." 7 We can see that the attachments include the contract 8 deal summary with appendices and the BBS deal 20/12/07. 9 Do you see that as an attachment? 10 A. I do, yes. 11 Q. Looking down the chain, we can see that that came to you 12 from Geoff Gilbert on 9 January with the forwarding of 13 Wiesbaden deal. And if you go further back yet, on the 14 same day, earlier in the day, Geoff Gilbert sent it to 15 Scott McFadzen at Bilfinger, saying: 16 "Scott, as requested I enclose the final draft of 17 the Deal. I'll get a PDF copy of the signed version and 18 send to you in due course." 19 I think again you noted this in your earlier 20 comments, you weren't quite sure whether or not you had 21 seen the Wiesbaden deal, but now you have seen this 22 email, does it appear that it was sent to you on 23 9 January first of all? 24 A. It does appear that, but I'm not sure -- was that 25 password protected? Could I read it? Because there 74 1 were things that were password protected so that 2 I couldn't read them. 3 Q. We can see the bottom email, it was being sent to 4 Bilfinger for their purposes. So they would have had to 5 have been able to open it, wouldn't they? 6 A. Yes, but they shared passwords sometimes that I was not 7 aware of. I'm not using that as an excuse, but that was 8 the case in some cases. 9 Q. If you were sent something by a colleague that was 10 password protected, would you be likely to obtain the 11 password from your colleague so you could open it? 12 A. I might have been, but I can't recall. There were 13 things that I didn't see, and I can't remember whether 14 this was one or not. 15 Q. But we can see from the email of 9 January, if we scroll 16 up the screen a little bit, Geoff Gilbert has gone to 17 the trouble of sending it to you in the evening of 18 9 January. Are you suggesting that you would have got 19 that, and if it was password protected, just left it? 20 A. I honestly can't remember, and I don't -- I don't know 21 why he didn't send it to him direct. 22 Q. First of all, he sent it to you on 9 January. 23 Presumably for your information. And then if we scroll 24 up the screen, you don't forward it to Andrew Fitchie 25 until 6 February. Is that fair? 75 1 A. Yes, okay. 2 Q. So would you have forwarded something four weeks later 3 which you'd never managed to open because you didn't 4 have the password? 5 A. I don't recall. 6 Q. Looking at this now, is it not a reasonable inference 7 that you had managed to open the attachment and consider 8 the terms of the Wiesbaden deal some time on or after 9 9 January? 10 A. I might have been able to open it. I don't know whether 11 I would have considered it, because, as I say, I was not 12 leading on stuff at that stage. 13 Q. You've been sent the deal by Geoff Gilbert and you're 14 the one responsible for -- 15 A. No, I was not responsible. 16 Q. You're the one responsible for emailing Andrew Fitchie 17 and forwarding it to him? 18 A. Yes. It doesn't mean to say I read it though. 19 Q. You provided comments in relation to the draft of 20 Schedule Part 4 to Andrew Fitchie as you've seen 21 earlier? 22 A. Yes. 23 Q. Those things taken with the fact that later in March you 24 were named as being one of the people responsible for 25 that, does that not trigger your memory that in fact you 76 1 did have a responsibility in relation to this part of 2 the schedule? 3 A. As I said before, that -- that schedule was on 25 March. 4 So -- 25 March when I was about to be leaving. So I did 5 not -- 6 Q. I'm asking whether seeing that now triggers your memory 7 that you in fact did have responsibility for Part 4 of 8 the Schedule? 9 A. No, I didn't have responsibility for it. Clearly I did 10 send it to Andrew Fitchie. 11 Q. Just taking a pause for a minute there, when you sent it 12 to Andrew Fitchie, did at any time Andrew Fitchie tell 13 you in relation to the Wiesbaden deal and converting it 14 into Part 4 of the Schedule, that the contractors just 15 would not accept a fixed price deal? 16 A. No. 17 Q. Did he ever suggest to you that matters would have to be 18 put on hold to try and allow the legals to catch up and 19 the design to catch up before the contract was 20 concluded? 21 A. Not to me, no. 22 Q. And repeat, did he ever suggest to you that the 23 Wiesbaden deal and/or Part 4 of the Schedule created 24 a large potential liability for tie? 25 A. He was certainly unhappy with Schedule 4. 77 1 Q. What was he unhappy about? 2 A. I think he used the term, it's a contract within 3 a contract. 4 Q. What did you take that to mean? 5 A. Well, they were just -- it wasn't just simple 6 information. They were trying to amend things that 7 might differ from the core clauses and create 8 a liability. So indirectly, I suppose, yes. 9 Q. Did his concerns remain throughout the time when 10 Schedule Part 4 was under discussion? 11 A. Yes, they did, but he was endeavouring to close them 12 out. He was heavily involved in meetings throughout 13 this period. 14 Q. We resume with looking at some of the correspondence 15 that passed. Could we look at an email reference 16 CEC01448511. 17 We can see this is an email from you to 18 Richard Walker at Bilfinger with a date of 19 11 February 2008. Do you see that? 20 A. Yes. 21 Q. The subject matter is "Schedule 4 Base Case Assumptions - 22 further meeting" and you say: 23 "Further to the voicemail messages that I left on 24 your office telephone and mobile, we need to confirm 25 arrangements for going through the balance of your 78 1 points on Schedule 4. 2 "Geoff said tomorrow and suggests the following 3 attendees: 4 "You, Scott, someone from Siemens (Herbert or 5 Steve), either Andrew Fitchie or Phil Hecht, 6 Dennis Murray, Geoff and me. 7 "Can you confirm that this is okay?" 8 Do you recall this? 9 A. I have seen this as part of the Inquiry, yes. 10 Q. It's clear from this that the tie team was to be made up 11 of a solicitor and yourself, Dennis Murray and 12 Geoff Gilbert? 13 A. Yes. 14 Q. Again, does that not refresh your mind that you were one 15 of the ones responsible, having done the initial draft, 16 for developing the draft of Part 4 of the Schedule? 17 A. As I said before, I wasn't responsible because I was 18 leaving. There's no way it was ever going to get 19 resolved in the time that I was there. 20 Q. Geoff Gilbert was leaving also? 21 A. Well, he wasn't staying on, which is why Dennis Murray 22 was appointed to take on -- take over from him. But he 23 was staying longer than me. I thought he was staying 24 until the contract was concluded. 25 Q. Why were you asked -- 79 1 CHAIR OF THE INQUIRY: Mr Dawson, if what you say is 2 correct, what was the point in you going to the meeting? 3 A. Well, as support to do other work. 4 CHAIR OF THE INQUIRY: So it was part of your work, part of 5 your job -- 6 A. Yes. 7 CHAIR OF THE INQUIRY: -- to go to the meeting about this 8 matter that you were being asked about for the past half 9 hour. 10 A. Yes. 11 CHAIR OF THE INQUIRY: You still maintain that you weren't 12 involved as part of the team responsible for this? 13 A. As part of the team, yes. 14 CHAIR OF THE INQUIRY: Sorry? 15 A. As part of the team, yes. But I wasn't ultimately 16 taking responsibility for Schedule 4. 17 CHAIR OF THE INQUIRY: So you weren't solely responsible, 18 but you were -- 19 A. No, I wasn't solely responsible and I wasn't leading. 20 CHAIR OF THE INQUIRY: -- responsible as part of the team. 21 A. I was part of the team, yes, but I was junior to the two 22 directors that were leading it. 23 CHAIR OF THE INQUIRY: You had responsible -- the team had 24 responsibility for this. 25 A. Yes. 80 1 CHAIR OF THE INQUIRY: And you were part of the team? 2 A. Yes. 3 CHAIR OF THE INQUIRY: Well, if you just think about the 4 questions and answer them as directly and truthfully as 5 you can. Mr Lake. 6 MR LAKE: Thank you, my Lord. 7 If you could look at an email now, reference 8 CEC01448861. This is an email from you to Dennis Murray 9 of 14 February 2008. The heading is "Schedule 4". 10 We can see that what you say is: 11 "Attached is a copy of Geoff's notes from recent 12 meetings which I am incorporating into a new draft." 13 So we can take it from this that you were the one 14 that had been asked to prepare the new draft? 15 A. Yes. 16 Q. Where did you get your information as to what was to be 17 contained in that draft? 18 A. Well, I don't recall, but presumably from the notes that 19 I attached. 20 Q. When you say recent meetings, is it reasonable to assume 21 that you also had been present at those meetings? 22 A. Not necessarily. I may have been. But I was not 23 present at all of them, as some of the other emails 24 indicate. 25 Q. Go to another email, CEC00592621. We see here, in the 81 1 lower part of the screen, an email from you. It's dated 2 19 February to the representatives of Bilfinger and 3 Siemens where you forward to the other side the updated 4 travelling draft of Schedule 4 and make comments on it. 5 A. Yes. 6 Q. So we can see that as far as the other side, it would 7 appear to the other side, you were the one responsible 8 for providing new drafts to them? 9 A. Well, the emails came through me because I was the 10 procurement manager. That doesn't mean to say I was 11 preparing all of them. This was in the days before 12 procurement portals. So I was meant to be the focus for 13 all correspondence between the two parties. 14 Q. You had been party to the discussions. You were doing 15 the drafting, and you were forwarding the draft to the 16 other side. Does that not indicate just how important 17 your role was in relation to this draft, this part of 18 the contract? 19 A. Not necessarily, no, because I was not involved in all 20 the discussions. I was involved in some. I'm not 21 denying I was -- involved in all of them. But I wasn't 22 involved in all of them, and it wasn't necessarily my 23 drafting that I was preparing by that stage. 24 Q. Who would be having discussions then that you were not 25 involved in? 82 1 A. Well, Geoff Gilbert, Dennis Murray and Andrew Fitchie. 2 There were meetings that I was not involved in. 3 Q. And how were you informed of what was happening at those 4 meetings so you could reflect it in drafts? 5 A. Well, I think it's evident from that email that I was 6 given some notes. 7 Q. If we look at another draft, please, another email, it's 8 CEC01545414. We can see this comes from Suzanne Moir at 9 Pinsent Masons who were acting on behalf of Bilfinger. 10 And it's sent to you, Geoff Gilbert and Andrew Fitchie. 11 Do you see that? 12 A. Yes. 13 Q. It says: 14 "Bob, this document contains the 'legal' drafting as 15 discussed yesterday." 16 Now, you're clearly not being used here as just 17 a post box because it's also being sent to Geoff Gilbert 18 and Andrew Fitchie. Would you agree? 19 A. Well, they might have sent it direct as well. I ... 20 things were meant to come through me. Clearly they were 21 also sending some stuff direct. And there are other 22 things that went direct which didn't involve me. 23 Q. As far as this one is concerned, it's a reasonable 24 conclusion that you were not being used as a post box 25 because it was also being sent direct? 83 1 A. I wouldn't necessarily agree with you, sorry. 2 Q. So why do you think it was sent to you? 3 A. Well, because I was the procurement manager and the 4 arrangement that was put in place is that everything 5 would come through my email address, regardless of 6 whether or not I was actually acting on it. I mean, 7 I couldn't have realistically have acted on everything 8 that came into my -- my email box because some of it was 9 legal. I wouldn't act on the legal stuff. That would 10 automatically go to Andrew Fitchie. 11 Q. We have got a draft -- 12 A. You know, this is 13 March. This is two weeks before 13 I was leaving. I would have passed that on to the other 14 parties within tie that were dealing with it. 15 Q. You were still working at tie? 16 A. I was still working at tie, yes. 17 Q. This was something that you had had dealings with? 18 A. I had had dealings with it, yes, but I didn't have full 19 responsibility for it all. 20 Q. But you had responsibility, as Lord Hardie said, as part 21 of a team? 22 A. As part of a team, yes. 23 Q. So would you have considered a draft sent to you in 24 these circumstances? 25 A. If it was legal drafting, then that would have been 84 1 considered by Andrew Fitchie. 2 Q. It refers to meetings -- sorry, it refers to drafting as 3 discussed yesterday. Is that likely to have been 4 a meeting, do you think? 5 A. I don't recall whether it was a meeting or whether it 6 was a phone conversation. I don't recall myself having 7 a phone conversation with -- Suzanne. 8 Q. If the draft has been sent to you, it's a reasonable 9 inference, isn't it, that you were involved in that 10 discussion? 11 A. It is -- it's possible. I can't recall whether I was or 12 not. I don't -- I'm pretty sure I was not involved in 13 a telephone conversation with her. 14 Q. Might you have been involved in a face-to-face meeting? 15 A. As part of a team, I might have been. I can't recall. 16 Q. If you could then please look at another email. This 17 one is reference CEC01451012. If we could start with 18 the lower email on the first page. This is from you to 19 Suzanne Moir. It's dated 12 March. It's copied to 20 Geoff Gilbert and Dennis Murray within tie and 21 Richard Walker and Scott McFadzen at Bilfinger. Also 22 persons at Siemens, Andrew Fitchie, and the solicitors 23 representing the consortium members. Do you see that? 24 A. Yes. 25 Q. So these are really all the people that were involved in 85 1 the negotiations? 2 A. Yes. 3 Q. You say in the text: 4 "Further to our meetings yesterday and today, 5 I attach an updated version of what we discussed." 6 A. Yes, okay, so I was in the meeting, yes. 7 Q. It appears that you have prepared the version that has 8 been sent forward here. 9 A. Yes. 10 Q. Because you say: 11 "I haven't yet compared with notes from Geoff, 12 Dennis and Steven as yet and thus apologies if I've 13 missed something. Obviously I haven't put anything in 14 lawyer speak." 15 Once again, does that not indicate the depth of your 16 involvement, that you were the one that had actually 17 prepared the new draft following the meeting? 18 A. This one, it would appear, yes, that seems logical. 19 There are several areas not concluded. 20 Q. Yes. If we look further up the page at an email of 21 19 March, it's addressed to you and Suzanne Moir, but 22 also copied to Geoff Gilbert and Dennis Murray within 23 tie, and Andrew Fitchie at DLA Piper. Do you see that? 24 A. Yes. 25 Q. So once again, it doesn't appear here that anybody is 86 1 just sending something to you as a post box? 2 A. I don't know how the reply to all might work on that. 3 Q. Once again, it's addressed to you and saying: 4 "In advance of our meeting tomorrow, I attach our 5 mark-up of Schedule 4 in relation to the Pricing 6 Assumptions. This is extensive simply to align the 7 content with the outcome of recent discussions." 8 Again, would you have considered that draft being 9 sent to you? 10 A. I can't recall what I did. As I said, it was close to 11 when I was leaving. I may have been doing other things. 12 I -- you will have seen what I did with this and 13 whether I passed it on to others. I can't recall who 14 I passed it on to and to what degree I looked at it. 15 Q. If you look at the attachment that was sent to you here, 16 it's document reference CEC01451013. We can see here 17 again the front page with a heading, "Schedule 4 18 PRICING". The note has been put underneath it that: 19 "This mark-up reflects recent agreements reached 20 between tie and BBS in relation to Schedule 4 as amended 21 as a consequence of discussions on 18/3/08." 22 Do you see that? 23 A. Yes. 24 Q. If we could look, please, at page 7 of this, we can see 25 here Pricing Assumptions are, and just looking 87 1 generally, we can see that the text of the Pricing 2 Assumptions has been amended quite heavily. Do you see 3 that? 4 A. Yes. 5 Q. Were you involved in consideration of these amendments? 6 A. I don't believe I was. 7 Q. It appears that you had been at the meeting that this 8 draft reflects. Would that be fair comment? 9 A. I may have been. I can't recall. 10 Q. Do you recall discussions about how Pricing Assumption 11 number 1 as to the design was to be framed? 12 A. I'm sorry, I don't. 13 Q. Do you recall any discussions in relation to the wording 14 of Pricing Assumption number 1 in relation to design? 15 A. I don't recall them. I'm not saying I wasn't party to 16 them. I don't recall them. 17 Q. If we look a little bit towards the foot of the screen 18 here, we can see a proviso has been added: 19 "For the avoidance of doubt, normal development and 20 completion of designs means the evolution of design 21 through the stages of preliminary to construction stage 22 and excludes changes of design principle, shape and form 23 and outline specification." 24 Now, do you recall how that wording came to be 25 added? 88 1 A. No, I don't. 2 Q. You said that one of the issues with changes to design 3 was how the responsibility would be allocated. Was this 4 part of the allocation of responsibility? 5 A. That looks to me what it was intending to do, yes. 6 Q. Can you remember anyone at tie considering this wording 7 and its likely effect? 8 A. It would have been discussed in -- as I said, in the 9 senior leadership team. That -- because there were 10 discussions about that that I wasn't party to. 11 Q. Who made up the senior leadership team? 12 A. Well, that would have been Geoff, Dennis, it would have 13 included Andrew Fitchie and Jim McEwan and Steven Bell. 14 Q. If we go back to the email to which this was attached, 15 it's reference CEC01451012. 16 We can see the third paragraph of Ian Laing's email 17 says: 18 "I look forward to meeting with you tomorrow." 19 Obviously this email is addressed to you, as well as 20 his colleague, Suzanne Moir. Do you recall meeting with 21 him and discussing the draft? 22 A. I don't. I did meet with him on several occasions. 23 I don't know whether I did meet him on the 20th. 24 I assume I did, but I can't recall. 25 Q. The amendments we see in that draft are really quite 89 1 drastic, and there's nothing triggers your memory at all 2 about having a meeting where you discussed 3 such wide-ranging amendments to the draft? 4 A. No, I say this was at the back end of my involvement. 5 Q. But even -- 6 A. He says here -- sorry. He does say "to bring this in 7 line with the discussions between me, Scott and Dennis". 8 So I wasn't party to those discussions. 9 Q. Just read the first paragraph first of all. It says: 10 "In advance of our meeting tomorrow I attach our 11 mark-up of Schedule 4 in relation to the Pricing 12 Assumptions. This is extensive simply to align the 13 content with the outcome of recent discussions." 14 Then the next paragraph says: 15 "I have sought to amend the VE..." 16 That's the value engineering: 17 "... wording to bring this in line with the 18 discussions between me, Scott and Dennis." 19 So while there may have been a smaller group 20 discussing value engineering, it appears that there was 21 a wider group discussing the whole of part 4. Is that 22 not reasonable? 23 A. It's possible. 24 Q. And that there was going to be a meeting the next day, 25 where presumably the purpose of that would be to discuss 90 1 the much amended draft. 2 A. Yes. 3 Q. Now, you make the point that it was near the end of your 4 time, but were you not still doing your best to consider 5 the terms of the contract and protect tie's position? 6 A. Where I could, but I couldn't change everything, and 7 I was never going to be able to -- there was never going 8 to be agreed before I left. 9 Q. With respect, you might answer that: so what difference 10 does that make? You were still there and could make 11 a change -- make a difference while you were there, 12 could you not? 13 A. I could potentially. But I could flag stuff. That 14 doesn't mean to say it would be incorporated. 15 CHAIR OF THE INQUIRY: Although it was close to your 16 leaving, it appears that you were going to be at the 17 meeting the next day, which was to discuss this. 18 A. It does appear that. I can't recall whether I was or 19 not. 20 CHAIR OF THE INQUIRY: It says that in terms. 21 A. It implies that, yes. I assume I was, but I can't 22 recall. Sorry. 23 MR LAKE: Could I ask you then to look at another email. 24 It's reference CEC01451185. 25 CHAIR OF THE INQUIRY: Mr Lake, is this -- 91 1 MR LAKE: I think this is the last document I'm going look 2 at, my Lord. So I think it might be time to wrap up. 3 This is an email to you -- from Ian Laing to several 4 people, including you. Do you see that? 5 A. Yes. 6 Q. It's got the date of 26 March and the subject matter 7 Schedule 4. This is obviously right on the cusp of you 8 leaving at 26 March? 9 A. Yes. 10 Q. Is that fair comment? 11 A. Yes. 12 Q. Once again, inasmuch as it's been sent to you and 13 Steve Bell and Dennis Murray and Stewart McGarrity and 14 Jim McEwan and Andrew Fitchie, it would appear that 15 you're not being used as a post box. Would you agree? 16 A. Yes, but I wasn't leading. But carry on. 17 Q. I don't understand -- your qualification there is you 18 said -- "yes, but I wasn't leading". Pardon me. 19 I heard "leaving". 20 A. Yes. 21 Q. The text of the email is: 22 "As we discussed earlier today, the Design Delivery 23 Programme that will be version 28. The Pricing 24 Assumption in Schedule 4 of the Infraco Contract assumes 25 that the Design Delivery Programme will not change from 92 1 version 26. It follows that there is the possibility 2 that there will be an immediate Notified Departure on 3 contract execution. Given the unusual position that we 4 are in, please can you confirm that this is understood 5 and agreed by tie." 6 What did you understand you were being asked to 7 understand and agree by this email? 8 A. Well, it was sent, as you can see, to Steven and Jim, 9 who they clearly had the discussions with. So I don't 10 think the discussions were with me. But you've clearly 11 got a disparity in that you've got a programme, there 12 are two versions on from the one that is currently 13 the -- referred to in Schedule 4. 14 Q. And he is saying that that might give rise to an 15 immediate Notified Departure? 16 A. Well, I think the fact he said that, it almost certainly 17 would. So we -- you can't have that situation. 18 Q. You were still at this time, or you had been up to about 19 this time, the procurement manager? 20 A. Yes. 21 Q. Part of the procurement strategy was to reduce cost 22 exposure by having fixed prices? 23 A. I can't remember specifically what I did. I would have 24 raised that with somebody. I don't know whether I did 25 that by email. Presumably I haven't, otherwise you 93 1 would have -- but I would have mentioned that to 2 somebody because it -- it unravels the whole intent of 3 trying to get price certainty if you haven't got a -- 4 a robust basis for the programme. 5 Q. Were you having discussions to that effect with people 6 when you got -- in response to this email? 7 A. I can't -- I can't recall what -- what discussions I had 8 at that stage. 9 MR LAKE: My Lord, those are the only questions I had for 10 Mr Dawson. 11 CHAIR OF THE INQUIRY: Mr Dunlop? 12 MR DUNLOP QC: My Lord, I would appreciate maybe five or ten 13 minutes to explore two areas with Mr Dawson, knowledge 14 of risks and responsibility for drafting. I don't know 15 whether your Lordship wants me to -- 16 CHAIR OF THE INQUIRY: For the sake of the shorthand writers 17 we will have a break. 18 MR DUNLOP QC: I'm obliged. 19 CHAIR OF THE INQUIRY: We will resume at 3.30. 20 Mr Dawson, we are going to adjourn until 3.30 21 because the shorthand writers need a break. 22 A. Okay. 23 CHAIR OF THE INQUIRY: You will be given tea or coffee. 24 A. Thank you. 25 (3.12 pm) 94 1 (A short break) 2 (3.30 pm) 3 CHAIR OF THE INQUIRY: You are still under oath, Mr Dawson. 4 Examination by MR DUNLOP QC 5 MR DUNLOP QC: Mr Dawson, thinking firstly of the question 6 of the knowledge of risks inherent in this contract, I'm 7 right in understanding, am I, that you yourself were 8 aware from January 2008 that the aim of price certainty 9 had not been achieved? 10 A. At that point, yes. 11 Q. And indeed it couldn't be achieved while design was 12 incomplete? 13 A. Fully achieved. 14 Q. Yes. And that was something that would have been 15 generally understood within tie. It wasn't just you 16 that knew that? 17 A. No, that was generally understood. 18 Q. You were taken right at the end of your evidence to an 19 email on 26 March 2008 which, as you have pointed out, 20 was just as you were leaving? 21 A. Yes. 22 Q. If I can take you to the same email, but in a different 23 chain, please, CEC01466394. If we go down the second 24 page of that, please, I think in the bottom half of that 25 page we see the email that you looked at earlier. It's 95 1 the one from Ian Laing at Pinsent Masons to a number of 2 persons, including yourself. Do you see that? 3 A. Yes. 4 Q. That was the one indicating that the possibility that 5 there will there be an immediate Notified Departure on 6 contract execution; yes? 7 A. Yes. 8 Q. If we go up the page, please, do we see then that by 9 31 March, should his Lordship understand that by 10 31 March, albeit that email was sent to you, you would 11 have left by then; is that correct? 12 A. I had left, yes. I think that was the Monday. I am not 13 sure. 14 Q. Doubtless because Mr Laing won't have known that -- 15 A. No. 16 Q. -- he sent it to you again. Or he sent this email to 17 you and he is really just chasing, is that correct: 18 "Please can you let me have confirmation that the 19 position on the Notified Departure in relation to the 20 Design Delivery Programme is understood and agreed by 21 tie." 22 A. Well, yes, but I wasn't -- I didn't see that. 23 Q. I understand that. 24 A. I had left. 25 Q. Likewise, you won't have seen, if we go back to the 96 1 first page, and the bottom of that page, we see 2 Mr McEwan at tie sending on to Mr Fitchie, saying: 3 "Can you advise on a response to this please, what 4 Ian is saying is factually correct albeit that we are 5 working to minimise impact and variance between critical 6 path items." 7 Now, I realise that you haven't seen or you won't 8 have seen Mr Fitchie's response, but if you could look 9 to the top of the page, please, do we see that on 10 31 March Mr Fitchie responds saying: 11 "If the situation is that at this point SDS is 12 unable to produce a Design Delivery Programme which is 13 reliable and static at version 26 - and that is indeed 14 the situation that SDS have articulated - and that this 15 programme will need to be varied immediately post 16 contract award, tie needs to endeavour to negotiate with 17 BBS now the specifics of what is or is not to be 18 permitted as a variation to the Infraco Contract and its 19 master construction programme, otherwise the Notified 20 Departure mechanism is too blunt and will permit BBS to 21 include everything that they estimate is going to affect 22 them to be priced and to be granted relief. That 23 Estimate is bound to be all encompassing and 24 conservative." 25 Now, as I say, I realise you haven't seen this 97 1 before, but am I right in understanding, from what you 2 have said already in your evidence, that you're not 3 surprised by any of that? 4 A. No. 5 Q. Sorry, am I right in understanding -- 6 A. Sorry, you are right in understanding, yes. 7 Q. Thank you. He goes on, Mr Fitchie goes on to say that: 8 "The only approach open to tie, in my opinion, is 9 a factual one, not a contractual one (since the 10 mechanism for Notified Departure puts the advantage with 11 BBS by creating an automatic tie Change) ..." 12 That approach, he says, is: 13 "To capture as many identified key changes that tie 14 knows will be required and to attempt to fix them and 15 agree their likely programme and/or cost impact with BBS 16 prior to contract award, or at the least identify the 17 reasonable range of programme and cost impacts." 18 Is it things like that that you were meaning when 19 you spoke earlier of Mr Fitchie making attempts to close 20 down the risks inherent in the contract mechanism? 21 A. Yes, and I think I said I didn't anticipate at that 22 stage that the contract wouldn't be closed out 23 satisfactorily for -- for a while until issues like 24 that, although, as you say, I had hadn't seen that, 25 until that was resolved. 98 1 Q. Yes. Thank you. 2 If we move then on to the question of the drafting, 3 again, am I right in understanding that from January 4 through February and into March 2008, what we have is 5 a process of drafts being exchanged between yourself and 6 others at tie on the one hand, and the consortium itself 7 on the other, not at that stage a situation of the 8 lawyers exchanging the drafts? 9 A. I -- I'm not entirely sure. There was lots of goings-on 10 with the lawyers that I wasn't party to. They were 11 certainly more heavily involved than I was at that 12 stage. 13 Q. But if you remember the documents you looked at earlier, 14 we see a number of instances where you pass on 15 a travelling draft to Bilfingers; yes? And then -- 16 A. In connection with Schedule 4. I don't know what other 17 discussions were going on in connection with the 18 contract itself. 19 Q. I'm sorry, it's my fault. It was a bad question. 20 I meant with regard to Schedule Part 4. 21 A. As far as I'm aware, most things came through me, but 22 I don't -- 23 Q. Yes. 24 A. Clearly not everything did, because there were some 25 other emails that I have seen as part of the evidence 99 1 that I wasn't party to. 2 Q. Again, is it right to understand that there comes 3 a point where, and I'm using your language here from 4 your supplementary statement, paragraph 4, the thing is 5 only in hard copy today, is it right to understand that 6 there comes a point where the lawyers are asked to 7 contractualise the language? 8 A. Yes. 9 Q. Is it that that we see being referred to, for example, 10 in the email from Pinsent Masons when Suzanne Moir at 11 Pinsent Masons, in the middle of March 2008, talks 12 about, in inverted commas, the legal drafting? Do you 13 remember seeing that? 14 A. Yes, yes, I do. 15 Q. So what we have then is a process of the parties 16 themselves continuing discussions following Wiesbaden, 17 and then asking the lawyers to contractualise that 18 language, once the discussions have got to a certain 19 point? 20 A. Yes. I think there was still ongoing discussions on 21 Schedule 4, but -- 22 Q. Yes. In the context of that discussion, we see your own 23 comments on Bilfinger's draft of Schedule Part 4 and 24 your suggestion that the word "materially" is added in; 25 yes? 100 1 A. Yes. 2 Q. We know that that was resisted by the consortium; is 3 that correct? 4 A. I wasn't -- I can't recall being party to a meeting that 5 involved that discussion, but it clearly was resisted by 6 them. And I don't know why we didn't push that. 7 Q. We've heard from Mr Laing at Pinsent Masons that -- of 8 course he was acting for the consortium? 9 A. Yes. 10 Q. That his instructions were to stick to Wiesbaden so far 11 as he could. Was that anything that ever was made known 12 to you, that that was their position? 13 A. As I say, I can't recall being aware of the -- what was, 14 I think, later termed the Wiesbaden Agreement. So 15 I don't remember that, and I don't remember whether 16 material -- materially would have been discussed as part 17 of that or not. 18 Q. You obviously had the Wiesbaden Agreement. You were 19 emailed it in January? 20 A. Yes. Yes, I -- that appears to be the case, I don't 21 remember having it. And I think I -- I only had it 22 then. It would have been, I think, agreed far earlier 23 than that. It was earlier than that that the meeting 24 took place, I understand. I'm not sure when it was. 25 Q. Do you remember when my learned friend, Counsel for the 101 1 Inquiry, was asking you questions, he took you to the -- 2 a later draft of Schedule Part 4 that had been heavily 3 revised by Pinsent Masons for the consortium, and he 4 described a particular aspect of the change as drastic? 5 Do you remember that? 6 A. No, I don't remember that one. 7 Q. It was in his evidence earlier? 8 A. I don't remember that term "drastic", sorry. 9 Q. It was in connection with this notion of the evolution 10 of design, or rather the normal development and 11 completion of design. Do you remember that? 12 A. Yes. 13 Q. Do you remember discussion about what parties intended 14 or what parties wanted to include in the contract 15 referable to the normal development and completion of 16 design? 17 A. I don't remember the detail of it. I mean -- 18 Q. If I suggest to you that what Pinsent Masons inserted 19 into the Schedule Part 4 regarding normal development 20 and completion of designs was a direct lift from what 21 had been agreed in Wiesbaden, does that jog your memory 22 at all? 23 A. No. No, it doesn't. But I wasn't at Wiesbaden. 24 I didn't -- I wasn't -- 25 Q. Again, it was you that made the first draft of Schedule 102 1 Part 4? 2 A. Yes, it was. 3 Q. It was you that was involved as Schedule Part 4 turned 4 into a travelling draft that was being discussed in the 5 email traffic that we have looked at? 6 A. Yes. 7 Q. Are you saying that, despite -- and we can look at the 8 documents side by side -- despite the clear similarity 9 between Wiesbaden and the travelling draft of Schedule 10 Part 4, you didn't at any point have reference to 11 Wiesbaden when looking at what should be in Schedule 12 Part 4? 13 A. No, I didn't, no. I -- there were discussions on design 14 development. So it does appear that that is out of 15 kilter with what tie was trying to achieve then, 16 regardless of what might have been discussed at 17 Wiesbaden. 18 Q. I'm more trying to understand, is it really your 19 evidence that as you were negotiating the content of 20 Schedule Part 4 -- 21 A. I wasn't doing all the negotiating. There was lots 22 I was not party to at that stage. Some I was, I accept. 23 Q. Insofar as you had involvement and responsibility in 24 ongoing discussion of Schedule Part 4, is it really your 25 evidence that at no point did you refer to the Wiesbaden 103 1 Agreement in the context of that discussion? 2 A. I don't think I did, no. 3 Q. Just trying to be clear. Are you saying you can't 4 remember whether or not you ever read Wiesbaden, or are 5 you actually giving evidence to his Lordship that you 6 didn't look at Wiesbaden? 7 A. I can't remember either way. But if we -- if it -- 8 I think I would have remembered if somebody had said, 9 you know -- you know, we were trying to get to 10 a position that design development, which happens on 11 every project, would trigger a change in all instances. 12 I mean, that -- it may have been discussed at Wiesbaden, 13 but that wasn't the intention that tie was hoping to 14 achieve, because that would -- would trigger uncertainty 15 and compromise price certainty. 16 Q. Yes. 17 A. So I -- this doesn't fit, sorry. 18 Q. I think we know beyond any doubt that the first draft of 19 Schedule Part 4 was authored by you? 20 A. Yes; as I said, it was done over a weekend, without 21 reference to other people or any detailed knowledge of 22 the Wiesbaden Agreement. 23 Q. You needed something upon which to go, did you not? You 24 weren't just told: I would like a Schedule Part 4, 25 please draft me one. 104 1 A. I can't remember what I had and what I looked at, I'm 2 sorry. 3 Q. Again, you must have had something to go on because if 4 we look at your original draft -- 5 A. Yes, I must have done, but it still wasn't sufficiently 6 advanced because you can see by the number of red 7 comments I made where things were uncertain. That it 8 is -- there are extensive red comments that I've made 9 where I felt there was inconsistencies or ambiguities 10 that -- that presented risk to tie. 11 Q. We -- 12 A. So it wasn't as great as it should have been. 13 Q. We know beyond doubt that individuals from tie have gone 14 to meet with individuals in the consortium in Wiesbaden 15 in the middle of December 2007; yes? 16 A. I didn't know the date and it wasn't me. But yes. 17 Q. We know that they have come back with what is later to 18 be described as the Wiesbaden Agreement. 19 A. Yes. 20 Q. We know that in early January 2008 you are asked to put 21 into written form an agreement on pricing; yes? 22 A. Yes. 23 Q. Is it not rather surprising to find you asking 24 his Lordship to accept that you did that without 25 reference to the very agreement on pricing that had been 105 1 struck a few weeks earlier? 2 A. But I did note that in my email, that I looked at the 3 figures, and I can't remember why I didn't look at the 4 Wiesbaden Agreement, whether I was asked not to or 5 whether I said: I'm doing it over the weekend, I haven't 6 got time to look at that. I -- I honestly cannot 7 remember. 8 Q. You looked at the figures in what? 9 A. I don't know. Whether there was an email attachment to 10 it or whether it was just the figures in the Wiesbaden 11 Agreement, I don't know. I can't recall. 12 Q. So you may have looked at the figures in the Wiesbaden 13 Agreement, but not read the text? 14 A. I don't know. Can I see the Wiesbaden Agreement to see 15 what figures is in there? Because -- 16 Q. Certainly. 17 A. -- I can't recall that. 18 Q. The Wiesbaden Agreement is CEC02085660. You will see 19 it's headed up, "AGREEMENT FOR CONTRACT PRICE FOR 20 PHASE 1A DATED 20 DECEMBER 2007"? 21 A. Yes. 22 Q. If we go to the introduction on the third page of that: 23 "This document sets out the agreement reached 24 between BBS and tie on 20 December 2007 in respect of 25 the price ..." 106 1 Then contents. Is that not already beginning to 2 look quite like your first draft? 3 A. Well, there are -- 4 Q. Schedule Part 4? 5 A. Some of the contents is the same, yes. Can you -- 6 sorry, scroll down to see where the figures are? 7 Q. Certainly. If you go down to, for example, figures 8 start coming in at page 5. 2.1, negotiated price. And 9 if you go to the -- on my version anyway it's page 7 10 because page 6 is blank. At the top of that page you'll 11 see the wording that my learned friend asked you about 12 earlier: 13 "For the avoidance of doubt, normal development and 14 completion of designs means the evolution of design 15 through the stages of preliminary to construction stage 16 and excludes changes of design principle, shape and form 17 and outline specification." 18 A. Yes. 19 Q. Any of this jogging your memory, Mr Dawson? 20 A. I'm sorry, no, it's not. Is there a -- is there 21 a schedule of figures? Because there's not many -- 22 I see. There's some figures in there. 23 Q. What you have there, if you turn down to page 11, you'll 24 see the signatures. Back on page 10 you'll see 25 Mr Gallagher's signature. 107 1 Again, just trying to be clear, one can see evident 2 similarities between the Wiesbaden Agreement and the 3 first draft of Schedule Part 4, and indeed as one moves 4 on through Schedule Part 4. I'm just trying to 5 understand, can it really be the case -- 6 A. Well, you would, wouldn't you? You would cover the same 7 elements. 8 Q. That's my question, Mr Dawson. Can it really be the 9 case that you have not had any reference to the 10 Wiesbaden Agreement when engaged in the drafting of 11 Schedule Part 4? 12 A. As I said, I looked at the figures. That's what my 13 email says. 14 Q. The figures in the Wiesbaden Agreement? 15 A. Yes. I was only looking at the figures. I wasn't 16 looking at the text. 17 CHAIR OF THE INQUIRY: Mr Lake? 18 A. That's what I said. 19 MR LAKE: It was just, if it clarifies things, it did come 20 out in the evidence earlier today, but the covering 21 email for the first draft made it plain that the figures 22 came from an email from Geoff Gilbert and that's where 23 they had been sourced. The reference for that document 24 is CEC01495585. 25 MR DUNLOP QC: I'm aware of that earlier evidence. The 108 1 witness has just given evidence that he looked at 2 Wiesbaden and took the figures from Wiesbaden. 3 A. I'm not sure if I did. I've got lots of figures in my 4 first draft of Schedule 4 and I haven't -- can you just 5 run through the whole of this Wiesbaden Agreement so 6 I can see all the figures that are in there? Because 7 I can see some that refer to provisional sums. Is there 8 an appendix with a load of figures? 9 Q. By all means, the document manager can take you through 10 the whole of the -- I don't think that document has 11 Appendix A4. 12 A. Because there are quite a number of figures in my first 13 draft which I don't know where I got them. I can't 14 recall where I got them from, but you haven't shown me 15 any great number of figures in this Wiesbaden Agreement. 16 Q. Mr Dawson, all I'm trying to do is to understand whether 17 or not -- 18 A. Yes, and I'm trying to understand whether I looked at 19 that -- 20 CHAIR OF THE INQUIRY: Please wait, Mr Dawson, because if 21 you speak -- 22 A. Apologies, your Honour. 23 CHAIR OF THE INQUIRY: One person speaks at a time. 24 A. My Lord. 25 CHAIR OF THE INQUIRY: Otherwise the shorthand writers 109 1 cannot record -- 2 A. Okay. 3 CHAIR OF THE INQUIRY: -- what's happening. 4 A. Sorry. 5 CHAIR OF THE INQUIRY: Mr Dunlop? 6 MR DUNLOP QC: Obliged, my Lord. 7 All I'm trying to do is to understand whether or not 8 you are truthfully saying that you didn't look at 9 Wiesbaden. 10 Now, the shorthand noters have noted you, just 11 before my learned friend's intervention, as having said 12 that you did look at Wiesbaden, but only to get the 13 figures? 14 A. I -- I don't know what I looked at. That -- you 15 mentioned truthfully and that's truthfully. I can't 16 recall what I looked at. But what I'm asking you to do 17 is to show me if there are lots of figures within this 18 attachment. 19 Q. Well, you've seen everything that's in that particular 20 attachment. 21 A. Yes, but there's not the number of figures that are in 22 my first draft of Schedule 4. 23 Q. Mr Dawson, it's really straightforward -- 24 CHAIR OF THE INQUIRY: Mr Dunlop, Mr Lake has something to 25 say. 110 1 MR LAKE: Suggesting that that's all the figures in the 2 attachment, it would be necessary to look first at 3 page 25 of the document, the Wiesbaden Agreement, 4 CEC02085660, which has the detailed summary of the 5 contract price. Then you would also need to look -- my 6 learned friend referred to Appendix A4, and that's on 7 page 39, where you get all the figures for the 8 provisional sums. 9 So it's not correct to say there are no further 10 figures in that attachment. 11 A. Okay. So it looks like I took the figures from those 12 appendices. 13 MR DUNLOP QC: Which means you looked at the Wiesbaden 14 Agreement? 15 A. Well, as I said several times, I looked at the figures, 16 and that's what my email says. 17 Q. And if we look at your first draft and see similarities 18 in the text in the first draft to the text in the 19 Wiesbaden Agreement, then that's just a coincidence? 20 A. That would be in relation to figures largely. 21 Q. I'm asking you about the text, not figures. 22 A. But I mainly concentrated on figures, as I recall. 23 Q. If we look at the two and find similarities between the 24 texts, that's just a coincidence? 25 A. I -- I don't think that's probably the case, no. But if 111 1 I looked at some things, I might have incorporated some. 2 But you're focusing particularly on that design 3 development issue. 4 Q. I'm just trying to understand, Mr Dawson, whether or not 5 you looked at Wiesbaden when drafting Schedule Part 4, 6 and I'm still not sure I understand your answer to that 7 question. 8 A. Well, I can't recall what I looked at. As I said, it 9 was over the weekend. I wasn't familiar with the 10 Wiesbaden Agreement and I did a specific task and it was 11 to be looked at by those that were familiar because, as 12 I said in my email, there's a lot of things that I was 13 unfamiliar with the detail and there was a lot of things 14 that were uncertain and I -- well, they weren't 15 sufficiently clear in January. So I don't know how they 16 were clear in December. 17 MR DUNLOP QC: Thank you, Mr Dawson. 18 My Lord, I'm content to leave it there. 19 CHAIR OF THE INQUIRY: Thank you very much, Mr Dawson. That 20 concludes your evidence. You remain under oath and 21 could be recalled. Hopefully that won't be necessary. 22 Thank you very much. 23 A. Thank you, my Lord. 24 (The witness withdrew) 25 MR LAKE: My Lord, that concludes the witness evidence for 112 1 today. Tomorrow there will be two witnesses, 2 Professor Flyvbjerg and followed by Mr Fair, both 3 speaking to reports which have been automated. 4 CHAIR OF THE INQUIRY: We will adjourn until 9.30. 5 (3.55 pm) 6 (The hearing adjourned until Thursday, 22 March 2018 at 7 9.30 am) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 113 1 INDEX 2 PAGE 3 MR GRAEME BISSETT (recalled) .........................1 4 5 Examination by MR LAKE ........................1 6 7 MR ROBERT DAWSON (affirmed) .........................33 8 9 Examination by MR LAKE .......................33 10 11 Examination by MR DUNLOP QC ..................95 12 13 14 15 16 17 18 19 20 21 22 23 24 25 114