1 Wednesday, 18 October 2017 20 (2.00 pm) 21 CHAIR OF THE INQUIRY: Mr Lake. 22 MR LAKE: My Lord, the next witness this afternoon is 23 James McEwan. As is apparent, he's giving his evidence 24 by way of a videolink. 25 CHAIR OF THE INQUIRY: Yes. 98 1 MR JAMES MCEWAN (sworn) 2 (Evidence given via videolink) 3 CHAIR OF THE INQUIRY: You will be asked some questions now 4 by Mr Lake, who is counsel to the Inquiry. If you just 5 listen to the question and answer it as clearly and as 6 directly as you can. 7 A. I will do, my Lord. 8 Examination by MR LAKE 9 MR LAKE: Mr McEwan, could you state your full name, please. 10 A. James McEwan. 11 Q. What is your present occupation? 12 A. I'm retired. 13 Q. I think formerly you worked with tie in Edinburgh on the 14 tram project; is that correct? 15 A. I did. 16 Q. Could you just say what was your job title when you 17 worked there? 18 A. The job title, I believe, was Business Improvement 19 Director. 20 Q. Could I ask you to look at a document, please. I hope 21 you have it also. It's reference TRI00000057. Then we 22 have an underline C. 23 This should be a copy of your statement that you 24 provided. 25 A. My statement, yes, sorry. Got that. It's not got 99 1 a reference number on it. 2 Q. With that statement, perhaps we can just identify it. 3 It begins with question 1 on the first page, beginning 4 "by way of introduction". It's a total of 89 pages 5 long. And is signed on page 88 by you on a date in 6 April, and then there's a following page with an 7 addendum for clarification of 3 May, also signed by you? 8 A. Yes, yes, I've got that. 9 Q. Are you content that that is adopted by you as your 10 evidence to this Inquiry? 11 A. Yes. 12 Q. Now, there's a few additional questions I would like to 13 ask to clarify various things. 14 A. Okay. 15 Q. I would like to start, please, in December 2007, when 16 Matthew Crosse and Willie Gallagher went to Wiesbaden as 17 part of the negotiations to close the contract. Do you 18 recall that? 19 A. Yes, I do. 20 Q. I think we've heard that the evidence was partly to 21 settle the outstanding items of value engineering, and 22 also to try and firm up the contract price. Were you 23 aware of that? 24 A. I'd forgotten the value engineering bit, but yes, I was 25 aware that this was to firm up the contract price. 100 1 Q. Had you been involved in attempts to firm up the price 2 with the consortium? 3 A. Not at that stage, no. 4 Q. So you weren't aware of any of the background 5 discussions and what the sticking points were between 6 the parties? 7 A. I may have been aware of some the background issues and 8 discussions but I wasn't involved in a discussion on the 9 contract price, with the parties at that time. Other 10 than -- sorry, we had -- there was a -- there was 11 a meeting off-site with the contract where they landed 12 the 3.8 million. Was that the Rutherford Agreement or 13 whatever? 14 Q. Are you referring to what's known as the Rutland Square 15 Agreement? 16 A. Rutland Square, sorry. Yes. I attended that meeting. 17 Q. We have heard some evidence that was in February the 18 following year, 2008, does that ring a bell? 19 A. Yes. I actually thought that was before Wiesbaden. But 20 yes, it does. It rings a bell. 21 Q. Were you involved in preparation for the Wiesbaden 22 Agreement and what the strategy was for what would be 23 done there? 24 A. Not that I can recall, no. 25 Q. Were you involved in discussions with either 101 1 Willie Gallagher, Matthew Crosse or both of them as to 2 what had been achieved in Wiesbaden? 3 A. Well, Willie, I think, gave a presentation on what had 4 been achieved in Wiesbaden, and I think I attended that. 5 Q. What did you understand had been achieved in Wiesbaden? 6 A. Well, I thought what had been achieved in Wiesbaden was 7 that a deal had been done and we'd got the contract 8 price secured, you know. That was flavour of the 9 statement that was made when Willie came back. 10 Q. What had tie had to give in a sense in order to get the 11 contract price finalised? Was that discussed with you? 12 A. Not that I can recall, no. 13 Q. Would you recall any discussions with Willie Gallagher 14 or Matthew Crosse as to who would take -- who would bear 15 the risk of changes in the design after that date? 16 A. I don't recall discussions at that time with 17 Matthew Crosse. Matthew was very zealous about -- it 18 was his remit to do this, and at least at one meeting 19 which I tried to attend, I was asked to leave. So 20 I don't recall any discussions about what had to be 21 surrendered at Wiesbaden. There may have been some, but 22 it's not something I can remember. 23 Q. In terms of the Agreement you were asked to leave, could 24 you look, please, at page 50 of your statement. 25 Question 47 and the answer to it, if we could enlarge 102 1 those here in the Inquiry room. 2 Have you got question 47, Mr McEwan? 3 A. Yes, I do. 4 Q. What you say there is: 5 "We understand that Mr Gallagher met with 6 Mr Enenkel, BSC, on 5 May 2008. By email dated 7 5 May 2008, Mr Enenkel proposed that in the event that 8 Phase 1b did not proceed TIE would pay BSC 9 GBP3.3 million under the contract for Phase 1a. 10 Mr Gallagher wrote to Mr Enenkel on 6 May listing out 11 a number of conditions on which BSC would retain its 12 position as preferred bidder." 13 The question you were asked is: 14 "What was your awareness of and views on these 15 discussions." 16 Your response was: 17 "As mentioned above, I was asked to attend the 18 meeting with Mr Enenkel and his senior staff, along with 19 Mr Mackay, Mr Gallagher and Steven Bell amongst others. 20 I recall asking Mr Enenkel how many opportunities did 21 his company require to get their pricing correct? The 22 meeting, it is fair to say, was heated. Mr Enenkel, 23 I recall advised in what I assume was meant to be 24 a clipped consoling tone: 'You have to understand that my 25 company's policy is that we own no risk and the client 103 1 holds all the risk'. The meeting took a break after that 2 and I was asked to stand down for the resumption." 3 Is that the meeting that you were referring to? 4 A. That's right. 5 Q. That's the meeting that followed early in May where on 6 the eve of an intended contract close, the contractors 7 had announced they wanted to increase the price? 8 A. That's right. 9 Q. I take it you are ultimately aware of the agreement that 10 was achieved with the consortium after you left the 11 meeting? 12 A. I'm not sure that I -- well, I am not sure that I can 13 recall the detail. I was asked to -- the opening 14 statement you made about the 3.3 million, I'm not sure 15 whether that would have been in the second part. 16 I suspect it was because we didn't really talk about -- 17 in the part that I attended, we didn't really talk about 18 the numbers. As I say, other than they'd come back 19 looking for more money. I can't recall what the outcome 20 of that meeting was, but it presumably -- on the basis 21 of what the ultimate contract was. 22 I understood it, if memory serves me, that they'd 23 asked for a contingency to be put in for the potential 24 for the Notified Departure between the respective 25 persons of the design that was anticipated for any 104 1 differences there. 2 My understanding was that the outcome of that 3 meeting, there was an agreement. I think they'd asked 4 for an amount at the meeting, and the outcome of the 5 meeting was they got less than they asked for, but they 6 did get an increase in the -- increase in the price. 7 Q. Did tie get anything from them in return that you can 8 recall? 9 A. Well, it's difficult for me to recall that because 10 I don't think I was in at the sharp end of the meeting, 11 which was the, you know, detailing what was a handshake 12 and what was the agreement. 13 I think what tie got was some form of assurance 14 that -- I seem to recall that the contingency amount 15 that had been asked for was actually greater than the 16 value of the SDS contract. And given that what they 17 were looking to secure was a risk of there being 18 a disparity between version 26 or version 28, then that 19 seemed a reasonably generous amount of money from such 20 a contingency. 21 Q. Okay. I want to return now to just the Wiesbaden 22 Agreement for a minute, please. If we could look at 23 that, it's document reference -- this is one of the 24 larger documents. It's CEC02085660. 25 A. I have that agreement opened here. That was one you 105 1 asked me to look at earlier. 2 Q. Yes, to check you had it. 3 A. Yes. 4 Q. If you could just wait while we get it up on screen on 5 the Inquiry room. 6 A. I've got it up on an adjacent laptop here. 7 Q. Do you have a front page there that says agreement for 8 contract price for phase 1a dated 20 December 2007, with 9 a date 20 December? 10 A. Yes, I do. 11 Q. I have a feeling our pagination is going to be slightly 12 different in respect of this. But if I could ask to you 13 look at what I think might be page 3 in yours, at 14 clause 2.2. Can we look at here at page 5 on the 15 Inquiry screens. 16 A. "The agreed Value Engineering items included in the 17 price are set out in Appendix A3. These sums are fixed 18 reductions save for the conditions listed in Appendix A3 19 under 'Key Qualifications'." 20 Q. Can you recall when you were first shown this Agreement 21 and what had been agreed in respect of value 22 engineering? 23 A. I can't recall the detail of that. I'm sorry. 24 Q. You had had some responsibility for value engineering 25 prior to the contract close; is that correct? 106 1 A. What I was asked to do on joining tie, one of the things 2 I was asked to do, was set up a process for tracking 3 value engineering opportunities. And we created 4 a control document which we reviewed, I think we 5 reviewed it weekly, for items that affected the Infraco 6 contract and some I think that didn't. That were 7 banked. So we had a moving -- we had a moving line that 8 showed savings that we thought we had banked and savings 9 that were still to be included with the Infraco 10 contract. But would clearly only be realised during the 11 construction phase itself. 12 Q. When a proposal was made, or an idea for value 13 engineering was identified within tie, was it then 14 necessary to agree that with a contractor, both agree 15 the item and the saving that would be made by means of 16 it? 17 A. Yes, I would say so, yes. It had to be. 18 Q. I don't know if -- you will see in that clause we just 19 looked at, 2.2, a reference to Appendix 3. I wondered 20 if you could turn to Appendix 3. In the electronic 21 version we have, it's on page 29. 22 It will consist of a table which has the heading 23 "Appendix A3" in the top right-hand side. 24 A. There seem to be a lot of blank sheets, to be honest 25 with you. 107 1 Q. There are. Keep going, I think. Electronic page 29. 2 Otherwise it's something that will say Appendix 3 in the 3 top right-hand corner. Do you see that? 4 A. The paginated -- yes, I've got it. 5 Q. The main heading says "71214 Single VE List V31 agreed 6 BBS tie v1". 7 A. Yes. 8 Q. We can see in the table, set down below it, a number of 9 items of potential value engineering. Under the value 10 is a target sum and an agreed BBS position? 11 A. Right. 12 Q. Do you know what these would be? 13 A. Do I know what -- 14 Q. These items and the values that were put on them. 15 A. I'm sorry, I don't understand your question. These 16 are -- these were the opportunities and the description 17 is there, and this, I assume we had had discussions with 18 BBS, and an agreement on the value of this. 19 Q. Do you recognise any of these opportunities as things 20 you had been working on in the run-up to the Wiesbaden 21 Agreement? 22 A. I suspect they are, but to be honest with you, I can't 23 remember the detail of it. I don't know -- I do not 24 know what you are asking here. Yes, I remember with 25 Network Rail, for example. 108 1 Q. Can I ask you to go back to your statement, please. 2 A. Yes. 3 Q. And look at page 53 of that. 4 A. Page 3? 5 Q. Page 53. 6 A. Okay. Right. 7 Q. In question 51. You say there: 8 "On 13 May 2008 the Council's Policy and Strategy 9 Committee considered a report by the Council's 10 Chief Executive. The report advised that the estimated 11 capital cost for phase 1a was now GBP512.2 million. The 12 report stated that "Offsetting the increase in cost is 13 a range of negotiated improvements in favour of tie and 14 the Council in order to reduce the risk of programme 15 delays and minimise exposure to additional cost 16 pressures, as well as better contractual positions." 17 You are asked for your view on the statements above, 18 and you say: 19 "I believe it was an accurate report on the state of 20 play." 21 Had you been involved in the negotiations leading 22 right up to the close that took place in mid-May? 23 A. I was involved in the negotiation. My involvement in 24 closing out the contract effectively started in 25 January 2008, and concluded circa the end of 109 1 March/beginning of April 2008. Where we believed we'd 2 got an agreement which of course the 5 May meeting moved 3 the numbers around further. 4 So yes, I had been involved from January through 5 March to April in discussing and negotiating. Assisting 6 Steven Bell in that regard. 7 Q. The next question goes on after considering if you agree 8 with the statement: 9 "If so, what do you consider were the "improvements" 10 and "better contractual positions" that reduced the risk 11 of programme delays and minimised exposure to additional 12 costs?" 13 When you are asked about that, you say: 14 "I had no reason to disagree with it and assume that 15 the reduced risk was in part in reference to the 16 measures outlined in the Kingdom agreement as detailed 17 above." 18 Do you see that? 19 A. Yes. 20 Q. I would like you to look at the Kingdom Agreement. It's 21 a document with the reference WED00000023. 22 A. Yes, I have it here. 23 Q. Just wait one moment? 24 A. I've got the document. 25 Q. We will just call it up on screen in the Inquiry room as 110 1 well. 2 We have got a heading here, "CONDITIONS UNDER WHICH 3 THE BBS CONSORTIUM RETAINS ITS POSITION AS PREFERRED 4 BIDDER IN THE INFRACO PROCUREMENT TO ENABLE tie AND THE 5 BBS CONSORTIUM TO PROCEED TO CONTRACT CLOSE". Do you 6 have that? Do you have that, Mr McEwan? 7 A. Yes, I do. 8 Q. We see Condition One-1, if we take it short, consists of tie 9 paying the consortium the sum of GBP4.8 million in four 10 instalments when each section of the works is completed? 11 A. Okay. 12 Q. Do you see that? 13 A. Yes. 14 Q. And Condition Two-2 provides a provision by which tie will 15 make payment to? The consortium if it decides 16 (Over-speaking) 17 Could you let me finish, because we have to have 18 these things noted by shorthand writers, and if we both 19 speak together, they can't get it. Will you wait until 20 I finish my question and I'll wait until you finish your 21 answer. 22 What it says in short is that if tie decides not to 23 proceed with phase 1b of the project, there will be 24 a payment made to the consortium; is that it? 25 A. Yes, mm-hm. 111 1 Q. The next thing is in relation to Pricing Assumption 12 2 within Schedule 4, that the costs arising of that would 3 be capped at GBP1.5 million. 4 A. Sorry, you have lost me. Whereabouts in the document 5 are we looking at now? 6 Q. Pardon me. I have jumped forward inadvertently there. 7 If we look at Condition Three, pardon me, it should be that 8 the contract suite and its associated documentation will 9 be closed out on the positions stated -- as stated in 10 the attached summary table. 11 A. Condition Three? 12 Q. Yes. It says "Condition Three" in a bold heading on the 13 first page? 14 A. I've got it. 15 Q. Essentially it's agreeing the sort of various points of 16 detail in the wording of the contract documentation as 17 it's to be closed out. 18 A. Mm-hm. 19 Q. Condition Four deals with the question of CAF, if we go 20 over the page. CAF, the company building the trams, 21 joining the consortium? 22 A. Mm-hm. 23 Q. Condition Five and Condition Six are run together and it 24 deals with shutting down the mobilisation and advance 25 works contract. Is that right? 112 1 A. Yes. 2 Q. Condition Seven deals with the questions arising out of -- 3 this is the one I inadvertently read earlier. It's 4 dealing with road reconstruction and indicating that 5 certain costs are to be capped at GBP1.5 million. 6 A. Mm-hm. 7 Q. Condition Eight deals with release of information. And 8 Condition Nine deals with uninsured losses. 9 A. Yes. 10 Q. Now, when you said you thought that this agreement might 11 be the improvements or better contractual positions that 12 reduced the risk of programme delays, and minimised 13 exposure to additional cost, which part of that 14 agreement did you have in mind? 15 A. Well, I think -- I think the capping of the road 16 reconstruction at GBP1.5 million perhaps. 17 Q. Do you know what -- without the cap, what -- 18 A. And also the -- also the agreement to accept the risk 19 and any costs arising, changes relating to (inaudible) 20 information. 21 Q. Could I ask you to repeat the end of that answer. We 22 rather lost it in the link. It was with agreement to 23 accept, and any costs arising and then we lost it. 24 A. Yes. What I'm saying is BBS consortium agreed to accept 25 the risk and any costs arising from changes relating to 113 1 early release of IFC information subject to a cap of 2 1.5 million. So that would seem positive to -- from 3 tie's perspective. 4 Q. Now, these two things, the road reconstruction and the 5 early release of IFC information, what was the -- can 6 you remember, what was the view as to level of possible 7 liability without the cap? 8 A. No idea. I'm sorry. I can't remember. 9 Q. Can you remember, did you actually know at the time? 10 A. Well, perhaps. I don't know. I can't -- I certainly 11 can't remember. I'm sorry. 12 Q. We can finish with that document. You can put it to one 13 side. 14 A. Okay. 15 Q. Are you aware that Part 4 of the Schedule to the Infraco 16 Contract dealt with the contract pricing? 17 A. Yes. 18 Q. It included a number of -- as it was finally drafted, it 19 included a number of pricing assumptions? 20 A. Right. 21 Q. Do you recall that? 22 A. I recall sSchedule 4, yes. 23 Q. What was your involvement in negotiating pPart 4 of the 24 sSchedule? 25 A. I was part of the -- pPart 4 of the sSchedule was 114 1 primarily what we were looking at during January to 2 April. And in looking to close out -- as I recall, and 3 I can't recall what was on this pro forma, but as 4 I recall, there was a pro forma handed to Steven 5 and I on issues that had yet to be resolved. 6 And our task was to go through and each and every 7 one of those issues and try and get an agreement on it. 8 And the output of that -- of those discussions, which 9 were protracted, burning lots of midnight oil, was the 10 ultimate price 4 sSchedule. 11 That's -- that's the limit of my recall in terms of 12 the detail involved. I'm sorry. 13 Q. You said -- 14 A. I remember us spending inordinate amounts of time 15 talking about street furniture and suchlike, you know. 16 Q. You said Steve Bell was involved in that exercise. 17 That's finalising pPart 4. Who else was involved with 18 pPart 4 of the sSchedule on tietie's side? 19 A. I think there may have been various people that might 20 not have been there at all meetings, but there might 21 have been various people that come into the equation. 22 Dennis Murray, perhaps, as the commercial chap. 23 Alastair Richards potentially. Sorry, I can't -- 24 I can't recall. There were certainly meetings where 25 there was a number of tietie representatives. 115 1 Q. Did you have legal advice in negotiating pPart 4 -- 2 A. Yes, of course we did. Yes. We had DLA Piper providing 3 the legal advice to the -- to the team. And anything 4 that required to be -- if you're asking me were 5 DLA Piper represented at the meetings, yes, I think they 6 were. But I can't -- it was a period of three -- three 7 in terms of months and there was lots and lots of 8 meetings. I'm sure we actually held meetings at the 9 DLA Piper offices. 10 Q. If it's suggested to you that a representative from 11 DLA Piper was there only to mark up the draft agreement 12 and not to give any legal advice, what comment would you 13 have on that? 14 A. Nonsense. 15 Q. If it was suggested that there was a decision by -- 16 within tie, amongst the people negotiating to shut out 17 or exclude legal advice, what would be your comment on 18 that? 19 A. Not to my recollection. Why would anybody do that? 20 Q. Are you aware of any reason why that would be done? 21 A. Sorry? 22 Q. Are you aware of any reason why that would be done? 23 A. No. I've got no -- no idea. I don't understand the 24 question actually. I mean, I was certainly not involved 25 in instructing anybody to prevent our lawyers coming to 116 1 the meetings to discuss these things, no. Of course 2 they were there to help mark up the documents, but 3 I mean, cor blimey, we could get a secretary to do that. 4 The bottom line was they were there as far as I'm 5 concerned, in their legal capacity. 6 Q. If we see emails being sent to or copied to the 7 solicitors, it may seem an obvious question, but why was 8 that being done? 9 A. Copied by who to the solicitors? 10 Q. Either by people within tie, yourself, Graeme Bissett, 11 Bob Dawson, Geoff Gilbert, or people on the other side, 12 Ian Laing, the solicitor on the other side of the 13 negotiations. Why were things being sent to or copied 14 to the solicitors? 15 A. Well, I would have thought the answer to that was fairly 16 obvious. To make sure that our legal representation was 17 fully up to speed with everything that was going on. 18 And to give us an assurance in that regard. 19 Q. You have described how you were given a pro forma 20 agreement and told to fill it in. Was it ever shall -- 21 A. No, that's not -- 22 Q. Sorry, if that's wrong, correct it, please. 23 A. It was not a pro forma agreement. What we were given 24 was a menu list of issues that hadn't been resolved, and 25 the simple fact is that by the January of 2008, there 117 1 were a lot of big ticket items related to the ultimate 2 price that hadn't been fully resolved, and those formed 3 part of that menu list, and these represented the items 4 which we required to debate and discuss with Bilfinger 5 Berger and Pinsent Masons, their representatives, and 6 achieve -- and Richard Walker, Mike Flynn. 7 CAF were fairly absent because CAF were fairly 8 uncontroversial for the whole project, it seemed to me. 9 So Mike Flynn, Richard Walker, Ian Laing and then, on 10 the other side, us, going through these items and trying 11 to get to a position of agreement on all the outstanding 12 items on that. 13 Q. I know you won't be able to remember the whole list, but 14 can you remember any examples of the sort of thing that 15 was on that list of things to be resolved? 16 A. I think I have already answered that in saying no, 17 I can't. I remember strangely enough how things stick 18 in your memory, the shape of street poles for some God 19 knows reason, which seemed to be creating, in a heritage 20 city that is Edinburgh, lots of angst and the cost of 21 these and such like. 22 But no, I'm sorry. The list must exist there 23 somewhere, I would have thought. 24 Q. Were you told that what had been agreed in Wiesbaden had 25 to be reflected in Schedule Part 4? 118 1 A. I don't think that was explicitly said, but I think 2 implicitly then you would have thought that was a basis 3 for it, you know? 4 Q. Was it -- 5 A. Clearly the Wiesbaden Agreement hadn't -- had been 6 agreed, but hadn't by definition stuck. So there was 7 a list of items which (inaudible) that Wiesbaden 8 Agreement. So nobody -- I don't recall anybody telling 9 me that the Wiesbaden Agreement had to be the basis on 10 which we proceeded. I think that was implicitly 11 assumed, that Wiesbaden Agreement was a foundation 12 document and we were arguing as to why there should be 13 any changes to that. 14 Q. If it was -- 15 A. In terms of cost. 16 Q. If it was suggested to you that the Wiesbaden Agreement 17 was effectively set in stone, nothing about it could be 18 changed, and it had to be reflected in Schedule Part 4, 19 what would your comment be on that? 20 A. I would have said that we were probably wasting our time 21 negotiating that because -- 22 Q. Was -- 23 A. It clearly wasn't set in stone, if that was the case. 24 Q. Were you told that it was non-negotiable, what had been 25 agreed at Wiesbaden? 119 1 A. I don't remember being told it was non-negotiable. 2 Q. Did you consider that you were negotiating terms such as 3 the price and the responsibility for design risk? 4 A. I think we were negotiating items which had the 5 potential to impact price. 6 Q. I want you to look at some more documents then in 7 relation to the negotiation of the Schedule? 8 A. Right. 9 Q. First I want you to look at document CEC01448355. And 10 also the document with the same number ending 56. 11 If we start with the one ending 55 -- 12 A. I have got the documents. 55 is a memo from Bob Dawson. 13 Andy's comments are now in turquoise. 14 Q. It's dated 6 February 2008 and sent to various people, 15 including you? 16 A. Yes. 17 Q. It's got an attachment, and if you look at the second 18 document, the one with the number that ends 56? 19 A. Yes. 20 Q. Thank you. Is that a copy of the agreement with the -- 21 A. Yes, I've got the document. 22 Q. If we go to page 2 of this, under the heading, "Base 23 Case Assumptions", we can see that the -- it's a defined 24 term and what it says: 25 "... mean the following assumptions (a) that the 120 1 Design prepared by the SDS Provider will ..." 2 Then if we jump down the page: 3 "not, in terms of design principle, shape, form 4 and/or specification, be [add 'materially'] amended from 5 the Base Date Design Information." 6 After that there's been added: 7 "What about any specific issues that we know about, 8 such as VE." 9 After that, in another colour, in turquoise: 10 "Given that a substantial amount of design requires 11 to be presented, reviewed, et cetera, this clearly will 12 not happen. Agree with Bob's comment." 13 I assume that Bob's comments were the ones written 14 in the darker blue. Was that your understanding? 15 A. To be honest with you, I'm not sure. Truthfully, 16 I can't remember Bob Dawson. I remember Andy Steel 17 being heavily involved in the review of value 18 engineering. 19 Q. Now, in terms of the comment here that we have got 20 a clause here which is suggesting that the design may 21 not now in terms of design principle, shape, form and/or 22 specification, be amended, and we can see from the 23 comments that it seems that there's been some concern 24 about that. 25 A. Mm-hm. 121 1 Q. Did you have any concerns about that? 2 A. My recollection in reading -- I have to say, a lot of my 3 recollection is not so much recollection as 4 interpretation of documents that I'm now reading again 5 for the first time in many years -- is that there was 6 a design freeze placed by Steven, and I think it was in 7 November of 2007. Version 26. My experience of 8 designing anything is that you -- you live in an 9 ontological universe. The reality is things move and 10 change and different issues arose. So whilst there was 11 a general principle that nothing should change, events 12 can overtake that, you know, and, you know, you had to 13 deal with those as part of the process. 14 Indeed, part of the risk, or part of the issue for 15 debating the design contract was that the normal design 16 risk should be removed from Edinburgh and put into the 17 hands of the building contractor. 18 That in itself anticipates that there will be some 19 level of change. And the issue was to make sure that 20 that responsibility rested with the contractor, who had 21 a peer-to-peer relationship with the designer, you know. 22 And that was some part of their issues. 23 Q. Who -- 24 A. (inaudible) 25 Q. Who said to you that the normal design risk should be 122 1 removed from Edinburgh and put into the hands of the 2 building contractor? 3 A. Well, I can't remember who specifically said it, but 4 I think that -- I think that was understood to be the 5 position. Certainly I think Mr Gallagher would have 6 insisted on that. I think Edinburgh itself had insisted 7 on that. I think the reality is we didn't have 8 a standard contract design and build contract. The 9 ambition of the novation was that the risk that we 10 translated a peer-to-peer relationship into 11 a peer-to-subordinate relationship, and in effect 12 redesigned the contract structure to be a more 13 traditional design and build contract, after the event. 14 Originally it had been. 15 Q. After what event? 16 A. Sorry, the -- the original contract structure as 17 envisaged by tie, going back a number of years, back to 18 2002, I think, 2003, was that the design would be 19 created and it would be completed and used to inform the 20 procurement process for the construction. 21 That from my understanding in 2006, prior to my 22 arriving at the project, changed, and the procurement 23 went ahead on the basis of the design for the critical 24 elements of the overall project. 25 The builders or the construction companies were 123 1 asked to bid on that basis. 2 So the idea of novating the contract from SDS to 3 Infraco was to transfer the risk of the design, residual 4 normal design risk to the builder. I don't think there 5 was any -- I don't think anybody disagreed with that. 6 Q. If the idea was -- as you say, if you price according to 7 the design at some stage, everyone would anticipate, 8 would they not, that there's going to be change to that 9 design in the months or even years that follow? 10 A. Yes. I mean, I think -- I think there's a question of 11 degree, you know. I think the reality is that normal 12 design risk -- I can only speak from previous experience 13 of my own in designing computer systems. I recall us 14 spending two years getting a design as close as we could 15 to what the customer needed and having 600 change 16 requests within about six months after it. It's a kind 17 of computing term, I know, but it's an ontological 18 universe. Things change, you know. Things move on. 19 There are external factors that come to play. 20 One of the things that I have noted and I think you 21 will have read in my statement was I discovered that SDS 22 had only sample tested about 10 per cent of the route 23 for ground conditions. So there was a potential for 24 changes to arise once the actual construction got under 25 way and the actual ground conditions were discovered. 124 1 You could be critical and say: why didn't they look at 2 100 per cent of the ground conditions as well, because 3 they would have had to dig up the whole of Edinburgh to 4 do it. 5 Q. I don't want to get into SDS at the moment. I just want 6 to focus on this agreement, please, on design changes. 7 You're talking about certain normal design changes 8 might be anticipated, and as I understand what you say, 9 is that Edinburgh anticipated that the contractors, the 10 consortium would bear the responsibility for those. 11 A. For normal design -- for the normal design risk, yes. 12 Q. In respect of things that went beyond normal design 13 risk, and that could be the client changing their mind 14 after a year, who was going to bear responsibility for 15 that? 16 A. Well, there was a mechanism in the contract for that, 17 for -- if the client -- if we changed our mind -- 18 Q. Can I just stop and interrupt you there. Before we get 19 to a concluded contract, what was your understanding in 20 negotiating the contract as to who was to bear that 21 risk? 22 A. My understanding was that SDS would bear -- sorry. Once 23 novated, Infraco would bear the risk of normal design 24 development. And I don't think -- I think that was 25 unequivocal from my perspective. And indeed -- 125 1 Q. What about -- 2 A. From our perspective. 3 Q. What about changes that weren't part of normal design 4 development? Who did you think would be bearing 5 responsibility for those? 6 A. I think that would be dependent on the nature of that 7 change. There was a change control process, or 8 a Notified Departure process, in the contract. So if, 9 for example, the builder decided to build it with 10 a different material, build a bridge with a different 11 material, there may have been a case that they would 12 have had to pay for that. 13 Q. Just looking at this assumption that we see in paragraph 14 (a)(ii) on page 2 of this draft agreement, that says 15 that the design will not -- I'll just read it without 16 amendments: 17 "It will not in terms of design principle, shape, 18 form and/or specification, be amended from the Base Date 19 Design Information." 20 If I could ask you to jump forward to what I think 21 in the printed version will be page 10 of 19, in the 22 electronic version it should also be page 10. Look at 23 clause 1.1. It says: 24 "The Contract Price has been fixed on the basis of 25 inter alia the Base Case Assumptions. If now or at any 126 1 time the facts or circumstances differ in any way from 2 the Base Case Assumptions (or any of them) the Infraco 3 may (if it becomes aware of the same) notify tie of such 4 differences." 5 That's to be called a Notified Departure. 6 A. Yes. 7 Q. So what this seems to be saying, if things aren't set 8 out in paragraph (a)(ii), it will be a Notified 9 Departure; is that your understanding? 10 A. I'm not really sure I understand the question, to be 11 honest with you. In (a)(ii) it's saying "not in terms 12 of design principle, shape ... amended from the Base 13 Date Design Information". 14 Q. That's a design -- if we look at that, that's a defined 15 Base Case Assumption, is it not? 16 A. Sure. 17 Q. And Clause 1.1 is saying what will happen if there is 18 a departure from the Base Case Assumptions. 19 A. Yes. 20 Q. So the effect of that reading them together -- 21 A. 1.1 is saying -- alluding to is that there is -- I would 22 call this a change control mechanism. It's saying 23 Notified Departure here. 24 Q. If you read the two of them together, it means that if 25 there is, in terms of design principle, shape, form or 127 1 specification, an amendment from the Base Date Design 2 Information, that will be a Notified Departure, giving 3 entitlement to -- 4 A. Yes. 5 Q. Did you consider whether or not that reflected the 6 objective of having the contractors responsible for 7 normal design development? 8 A. Again, I think it comes back to a question of degree. 9 You know, I considered that we were going to pay Infraco 10 to a substantial amount of money to have this contract 11 novated to them. And in terms of what they were 12 required to do or in terms of what they were required to 13 absorb, I think the amount of money they were paid 14 indicated they were required to absorb a fair amount of 15 the risk that remained. 16 I think the fact was that -- as you go on to 17 discuss, that we knew the contract was going to be based 18 on version 26 of the design, and in actual fact we were 19 going to look at version 28. 20 I have to say, my understanding of tram design is 21 no, I never -- I didn't look at the design. And I had 22 no understanding of what the delta between version 26 23 and version 28 was. 24 Q. Just interrupt there. We were talking about version 26 25 and version 31. Those are various programmes for 128 1 release of design information, are they not? 2 A. Right. 3 Q. Is that your understanding? 4 A. Sorry? 5 Q. Version -- V26 and V31, they're different programmes for 6 the release of design information? 7 A. I guess, yes. 8 Q. Is that your understanding or is your understanding 9 something else? 10 A. I'll be honest, I don't know if I do understand that. 11 My understanding was that the design that was in place 12 was going to be subject to the view post the contract 13 being placed, but -- and there may be a Notified 14 Departure arising from that. But I have no idea what 15 the size and scope of that departure would be or the 16 delta of it. 17 Q. Do you see that you could have on one hand change in the 18 delivery of the time at which the design is delivered. 19 On the other hand, you could have the actual changes in 20 the content of the design as delivered. Do you see, 21 they're two different things? 22 A. Yes. 23 Q. In terms of dealing with the programme of release of 24 information, you could make a change to the programme 25 and that might have an effect on the contractor. 129 1 A. I understand what you're saying. So -- 2 Q. But what I'm looking at here is actually change in 3 substantive design. 4 A. For example -- if, for example, we had utility diversion 5 delay in one area that required -- that was supposed to 6 be being worked on by the contractor, that's said to be 7 paved, but now it couldn't be because the area hadn't 8 been prepared or cleared in terms of utility diversion, 9 then there would be a change to the programme. 10 If it's a case that they discovered you need to put 11 three more arches on a bridge, then ... 12 Q. I would like to come back to the question I asked you 13 about Base Case Assumption (a)(ii)? 14 A. Right. 15 Q. When it was read with the provision we saw a minute ago 16 about Notified Departures, 1.1, do you consider that 17 that gave effect to the intention that normal design 18 development risk would stay with the contractor? 19 A. Yes, I do. 20 Q. We see the comments have been added to that (a)(ii), the 21 one in turquoise is that given a substantial -- 22 A. I don't. 23 Q. Is yours all in black and white? 24 A. I'm afraid so. 25 Q. If we read the last three lines of (a)(ii) it says that: 130 1 "Given that a substantial amount of design requires 2 to be presented, reviewed, et cetera, this clearly will 3 not happen. Agree with Bob's comments." 4 The comment before is -- 5 CHAIR OF THE INQUIRY: Mr Lake, we don't have (a)(ii) up 6 yet. 7 MR LAKE: Could we go back on the screens in the Inquiry to 8 page 2 of the document. 9 A. I've got the document. I've got the page. 10 Q. You've got the document, Mr McEwan. Unfortunately the 11 other people in the Inquiry don't. If we could enlarge 12 (a)(ii). I think everybody has it now. So I'll read 13 the comments again. Firstly the one in turquoise: 14 "Given that a substantial amount of design requires 15 to be presented, reviewed, et cetera, this clearly will 16 not happen. Agree with Bob's comments." 17 The other comment added in blue is: 18 "What about any specific issues that we know about, 19 such as VE." 20 The turquoise comment seems to be expressing some 21 doubt that it would be possible to adhere to the idea 22 that there would be no changes, no amendments, doesn't 23 it? 24 A. Well, I keep on saying the same thing. It's a question 25 of degree. My understanding was that the procurement 131 1 went ahead on the basis of critical design elements of 2 the contract. And in that sense on a Pareto principle 3 basis, the design should have been largely in accord 4 with what the contract was going forward at. 5 It's understood in any contract, as I understand it, 6 that there is a question of normal design development. 7 I think the ambition of Edinburgh, and I think our 8 understanding was that -- in novating this to -- from 9 SDS to Bilfinger Berger was that they were taking on 10 that normal risk. 11 According to this individual's viewpoint, there was 12 a substantial amount of design required to be presented. 13 According to what I have been told, the critical design 14 elements, as reinforced by 600-page Employer's 15 Requirements document, were fairly well understood. 16 So it's a question of degree, is the issue here. 17 Q. Could we go back to page 10 of this document. 18 A. Yes. 19 Q. And clause 1.1. 20 A. Yes. 21 Q. The comment that's been added at the end of this is: 22 "Can't be just any departure or all risk will come 23 back to tie." 24 Once again, that might have been someone else's view 25 rather than yours, but did that not cause you some 132 1 concern that someone else felt, as worded, this was 2 going to bring all risk back to tie? 3 A. Well, clearly all risk coming back to tie would cause me 4 concern. But I restate -- I'm restating what I said to 5 you earlier. The information that -- that I was giving 6 was that this experienced contractor had been given the 7 critical design elements of the contract, and had put 8 a bid price in on the basis of those. 9 I can't understand, truthfully, why any departure 10 would -- it seems to be suggesting that any departure 11 would then mean that all risk comes back to tie. 12 I don't understand what it's meaning by that. I don't 13 see why that would be the case. 14 Q. Do you see on the one hand, the objective might be that the 15 risk goes to the contractor because they have been given 16 design and they've been paid, but what you then need to 17 do is make sure that the contract gives effect to that 18 intention. 19 A. Mm-hm. 20 Q. Did you consider whether or not the contract was giving 21 effect to the intention? First of all, did you even 22 consider the issue? 23 A. Consider what issue? I'm sorry. 24 Q. The issue of whether or not this contract would 25 successfully pass the risk of design, normal design 133 1 development, to the contractor. 2 A. Of course. Yes. Our intention and our ambition was 3 that that's exactly what it should be. 4 Q. That's your intention and that's your ambition. Did you 5 consider whether the contract was going to achieve that 6 intention and ambition? 7 A. Yes. I mean, I think the -- I think from my 8 perspective, that's entirely what we thought we had 9 achieved. 10 With the caveat, and I have made this point in the 11 document, that there was always a potential for 12 a Notified Departure. You can have a fixed price based 13 on the design that you've delivered, and in my 14 experience -- but there's always a potential for 15 a change control because of an external event or 16 circumstances that prevail which may or may not be 17 embraced in normal design development. 18 Q. Did you take -- 19 A. I would come back to the point that the amount of money 20 that was paid for this novation would indicate that 21 there was a fair degree -- should have been a fair 22 degree of latitude, that would not be embroiled in 23 every, as this chap alludes -- is this Andy Steel's 24 comment, can't be just any departure or all risk -- 25 Q. I think that is probably Bob Dawson's comment. 134 1 A. If that's Bob Dawson's view, it was not a view that was 2 expressed to me. 3 But I can't see, on the basis of the amount of 4 money, that millions of pounds were paid, for that 5 novation, I can't see why it would be reasonable for all 6 risk to come back to tie. 7 Q. If it's not reasonable that that should happen, what did 8 you do when you saw this comment on Clause 1.1? 9 A. To be honest, I in you have -- I guess Steven and I must 10 have discussed it, but I can't really remember what the 11 outcome of that was. 12 Q. Did you or anyone else within tie take legal advice on 13 this issue? 14 A. I would surmise that we did, yes. 15 Q. When you say "I would surmise", do I take it that you 16 can't recall whether you did or you didn't, but you 17 think you might have? 18 A. No, I'm certain we must have, yes. I remember on the 19 night that the contract was eventually signed, 20 and I playfully patted Richard Walker on the back, and 21 said: it's your design, it's now your issue. 22 Q. I want to look at another couple of documents, please. 23 Again, they have got sequential numbers. They are 24 CEC01451053 and CEC01451054. 25 A. Right, I have these documents. 135 1 Q. The first one of them, the one that ends 53, should be 2 an email from Philip Hecht dated 20 March 2008 to 3 various people, and included amongst those to whom it's 4 copied is you and Andrew Fitchie. 5 A. Yes. 6 Q. Do you recognise the name Andrew Fitchie? 7 A. Yes, of course. 8 Q. He was the solicitor? 9 A. Yes, of course. 10 Q. Again, were you actually aware why this was being copied 11 to him? 12 A. It was being copied to him in his capacity as the 13 principal lawyer to the project. 14 Q. We can see the text of the email is: 15 "Please find attached Schedule 4 as agreed today on 16 screen. Please note the variation actions on both 17 sides, as footnoted, to bring this document to a close." 18 A. Right. 19 Q. Are you able to remember, had you been at the meeting to 20 negotiate the terms of Schedule Part 4 at this time? 21 A. On 20 March, I suspect I was, yes. 22 Q. Could we look then at the document that's the attachment 23 to that, the one with the reference that ends 54. 24 A. Yes. 25 Q. The front page of that simply says "PRICING"? 136 1 A. Pricing, yes, got that. 2 Q. If you go forward, please, to page 6 in both the 3 electronic and the paper versions. 4 A. Page 6? 5 Q. Yes. 6 A. Yes. 7 Q. We can see the wording has developed. So it now says: 8 "Pricing Assumptions are: 9 "1. The design premised by the SDS Provider will 10 not (other than amendments arising from the normal 11 development and completion of designs): 12 1.1 in terms of design principle, shape, form 13 and/or specification be amended from the drawings 14 forming the Base Date Design Information (except in 15 respect of Value Engineering identified in Appendices C 16 or D)." 17 If I jump below the numbered paragraphs and 18 continue, it says: 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, did you consider this wording when it was sent 25 to you? 137 1 A. Well, I would have read the wording, yes. I mean, 2 I don't know what the -- I don't know what your question 3 is about. Yes, I read the wording. I remember seeing 4 that normal development and completion of design means 5 the evolution of design through stages, blah blah blah. 6 And you're saying that -- well, yes. I read the 7 wording and considered. 8 Q. Do you consider that met the Council's objective of 9 ensuring that the contractors would bear the 10 responsibility for normal design development? 11 A. Yes, I do. 12 Q. Again, can you remember whether advice was taken in 13 relation to that from anyone? 14 A. I'm certain we must have taken advice on that. 15 Q. Did you -- 16 A. I don't know whether I'm jumping ahead here, but my 17 understanding was that the dispute that eventually arose 18 was related to some clause that undermined this design 19 development that was in a schedule somewhere in and 20 cellophane wrapped before Steven and I got involved in 21 the process. I recall that, and I recall Mr Fitchie 22 discussing that clause after the event, after the 23 contract was let. 24 Q. There certainly were disputes regarding this clause or 25 what this clause ultimately became and how it was to be 138 1 interpreted. It might be suggested that this clause was 2 in fact entirely dictated by the Wiesbaden Agreement. 3 What would your comment be on that? 4 A. My comment -- sorry, are you saying to me that this is 5 the clause that caused the problem in the dispute? 6 Q. I'm asking you to assume that is the case, yes. 7 A. Right. Well, I'm not certain about how it arose from 8 the Wiesbaden Agreement, but I do recall the clause 9 being discussed. I wasn't involved in this dispute that 10 arose. I had moved to the MUDFA programme. But I do 11 recall the clause being discussed and the words that 12 Andrew Fitchie used on the clause were that he disputed 13 that this was a nuclear clause. There was clearly some 14 dismay about, you know, whether this left the programme 15 open to an exposure that it had previously thought had 16 moved over as part of the contract process. 17 Q. When did -- 18 A. But there was some -- sorry? 19 Q. When did Mr Fitchie say it wasn't a nuclear clause? 20 A. This would have been post the signing of the deal. 21 Q. Immediately after or much further after? 22 A. Well, it must have been fairly adjacent because I moved 23 offices down to Leith, and I was in the office when 24 I heard him say that. 25 Q. Could you look at page 9 of this document, please. If 139 1 we could look -- 2 A. Right. 3 Q. This is still within the Pricing Assumptions. If we 4 could look at assumption 24. 5 A. 24? 6 Q. 24. We see it says: 7 "That in relation to Utilities the MUDFA Contractor 8 and/or Utility shall have completed the diversion of any 9 utilities in accordance with the requirements of the 10 Programme save for utilities diversions to be carried 11 out by the Infraco pursuant to the expenditure of the 12 Provisional Sums noted in Appendix B." 13 A. Yes. 14 Q. So in short it's saying the assumption is that the MUDFA 15 works would be largely finished before the Infraco 16 works? 17 A. Completed, yes. 18 Q. By the time this was being considered, and we saw that 19 the covering email was March 2008, what was your 20 understanding of how the MUDFA works were progressing? 21 A. My understanding was imprecise, but -- in the sense that 22 I wasn't fully up to speed with how it was progressing 23 and what the issues were, but I was aware that there 24 were issues. 25 Q. Were you aware that it was thought to be very unlikely 140 1 that it would be possible to finish the MUDFA works 2 prior to the Infraco works getting under way? 3 A. I don't think I was explicitly aware. I don't think 4 I remember -- if you're saying very unlikely, I think 5 I was aware that there may have been a potential, 6 I think, but I wasn't aware -- in fact not even that. 7 I wasn't aware, no. 8 I was asked to go down to MUDFA round about May to 9 audit what was going on, and I wasn't fully aware as to 10 when they were scheduling to complete prior to doing 11 that. 12 Q. Faced with a clause such as this which was making an 13 assumption about the MUDFA works, did you or anyone else 14 negotiating the agreement make enquiries to find out 15 whether that assumption would be true or not, whether it 16 would be correct or not? 17 A. I didn't ask for any investigation of that. The MUDFA 18 contract, however, and the MUDFA Project Manager 19 reported to Steven. So I would have thought Steven 20 would have been fully versed in the progress with MUDFA 21 as it was going on in that regard. 22 Q. Okay. 23 A. So not something I saw the need to personally review. 24 CHAIR OF THE INQUIRY: Mr Lake, are you going to be much 25 longer? I'm wondering about the shorthand writers. 141 1 MR LAKE: This would be as good a time as any. 2 CHAIR OF THE INQUIRY: Mr McEwan, we're going to have 3 a short break for the shorthand writers to have a break. 4 We'll come back in about ten minutes. It will also give 5 you a break as well. So we will see you in about ten 6 minutes. 7 A. Thank you very much. Thank you. 8 CHAIR OF THE INQUIRY: We will resume again at 3.20. 9 (3.08 pm) 10 (A short break) 11 (3.20 pm) 12 CHAIR OF THE INQUIRY: Mr McEwan, you're still under oath. 13 A. Okay. 14 MR LAKE: My Lord, thank you. 15 Mr McEwan, I would like to you look at a different 16 document now. It's an email and it has reference on it 17 CEC01465933. 18 A. Okay, I have the document. 19 Q. Okay. Now, it's an email. The pagination is probably 20 different in all versions. It's on an email chain. If 21 you go towards the end? 22 A. Yes. 23 Q. You will find an email from Ian Laing to various people 24 dated 26 March, timed at 11.26. It should be on about 25 page 4 of the electronic version. Yes, it's the upper 142 1 version that we have on screen at the moment, although 2 Ian Laing's name is on the previous screen. 3 A. Yes, okay. 4 Q. What he says there is -- it's addressed to all: 5 "Please find an updated version of Schedule 4 6 following the meeting yesterday. Happily this is 7 nearing completion." 8 Then if you look at the next email in the chain 9 above it, you need to go to the previous page on the 10 electronic version, I'm not quite sure where it will be 11 on paper, it's a reply from Philip Hecht of DLA to 12 Ian Laing, again copied to various people, simply 13 saying: 14 "Thank you, Ian. I will action this." 15 Do you see that? 16 A. "Thank you, Ian. I will action this." 17 I can't actually see that, to be honest with you. 18 Q. It should be directly above -- 19 A. Sorry, yes. Well, I have got one from Philip: 20 "Please find attached Schedule 4." 21 Q. It needs to go in the other direction. If you go above 22 the one you're looking at, saying: 23 "Please find attached Schedule 4." 24 You should find the one from Ian Laing that I have 25 just referred to, saying: 143 1 "Please find an updated version of Schedule 4 ..." 2 A. Yes, I've got that. 3 Q. If you go up from that, you should find one from 4 Philip Hecht saying simply: 5 "Thank you, Ian - I will action this." 6 A. I can see it on the screen. I haven't got it on paper 7 form here for some reason. 8 Q. I want to try and find the next one. If you can keep 9 going up, the next one I want is -- if you go to the 10 previous screen on the electronic version. It will be 11 from Ian Laing. It is dated 26 March 2008 with a time 12 on it of 16.23. 13 A. There's so much of the legalese paragraphs. This is 14 disclaimer -- I now have the Philip Hecht email. 15 Q. If you look up -- 16 A. "Thank you, Ian - I will action this." 17 Q. If you look up from that, do you find the one from Ian 18 Laing, 16.23. 19 A. Yes, I have it. "As we discussed earlier today". 20 Q. Yes. It's addressed to Steven/Jim, which is presumably 21 your colleague and yourself? 22 A. Steven Bell. 23 Q. Steven Bell and yourself? 24 A. Yes. 25 Q. It says: 144 1 "As we discussed earlier today, the Design Delivery 2 Programme that will be v28. The Pricing Assumption in 3 Schedule 4 of the Infraco Contract assumes that the 4 design delivery programme will not change from v26. It 5 follows that there is the possibility that there will be 6 an immediate Notified Departure on contract execution. 7 Given the unusual position that we are in, please can 8 you confirm that this is understood and agreed by tie." 9 Do you see that? 10 A. Yes. 11 Q. If we look yet further up in the chain, we will see yet 12 another email from Ian Laing, this time dated 31 March 13 at 10.21. In the middle of the screen in the Inquiry. 14 Do you have that? 15 A. Yes. 16 Q. It should say: 17 "Steven/Jim. Please can you let me have 18 confirmation that the position on the Notified Departure 19 in relation to the Design Delivery Programme is 20 understood and agreed by tie." 21 Do you see that? 22 A. Yes. 23 Q. Again, if you look further up the chain, we can see 24 there's an email from you this time. It's dated 25 31 March, timed at 10.42, and it's addressed to 145 1 Andrew Fitchie and Steven Bell. Do you have that? 2 A. Yes. 3 Q. You say: 4 "Andrew, can you advise on a response to this, 5 please what Ian is saying is factually correct albeit 6 that we are working to minimise the impact and variance 7 between critical path items. While we accept that the 8 version change will be a Notified Departure, we are 9 concerned to ensure that there will be no gaming of this 10 position by BBS, and that only where the change can be 11 shown to materially change the Infraco programme 12 critical path should we be liable for potential 13 additional charges." 14 Now, you were clearly concerned about what was being 15 identified by Ian Laing; is that fair to say? 16 A. I think in reading this again, I need to put out -- if 17 I'm hesitant about some of the responses here, you just 18 have to understand that this is a long time ago. So I'm 19 interpreting what I'm reading here, rather than 20 recollecting. 21 But I'm not sure I was concerned. I think 22 I understood it. I think I just was looking for legal 23 advice on how we should respond to it. 24 Q. Let's see the response you got from Andrew Fitchie. You 25 probably have to move yet further up or to an earlier 146 1 page? 2 A. Yes, yes, all right. 3 Q. It's an email from -- 4 A. We have got the response. 5 Q. What he says is: 6 "Jim, If the situation is that at this point SDS 7 is unable to produce a design delivery programme which 8 is reliable and static at V26 - and this is indeed the 9 situation that SDS have articulated - and this 10 programme will need to be varied immediately post 11 contract award, tie needs to endeavour to negotiate with 12 BBS now the specifics of what is or is not to be 13 permitted as a variation to the Infraco Contract and its 14 master construction programme, otherwise the Notified 15 Departure mechanism is too blunt and will permit BBS to 16 include everything that they estimate is going to affect 17 them to be priced and to be granted relief. That 18 Estimate is bound to be all encompassing and 19 conservative." 20 What did you understand? What did you take from 21 that advice? 22 A. Well, I think he was -- I think he was saying to us that 23 we should actually understand all of the potential 24 differences that may or may not arise. I think my 25 feeling on it was if we do -- if we knew that, if we'd 147 1 known that, and were in a position to do that, then, you 2 know, the issue wouldn't exist in the first place. 3 So there were so many unknowns and issues to be 4 dealt with that, you know, I understood the advice, but 5 it was probably not something that we were able to do, 6 you know. 7 Q. That's just talking about the changes in relation to an 8 alteration of design programme from V26 -- 9 A. Sure. 10 Q. -- to something later. But what about other changes? 11 Were you trying to consider what other changes were 12 known were going to happen and identify them in advance? 13 A. Again, I can only defer to Steven in this regard. 14 Steven understood the design. I had no -- my 15 understanding was that critical design was being 16 delivered to them. In terms of the programme, there was 17 clearly potential for MUDFA to affect the programme, but 18 the true extent of that was unknown. 19 It was unknown to me. 20 The only approach open to tie, in my opinion, was 21 a factual one, not a contractual one. 22 To be honest, I'm in a bit of difficulty with that 23 one in that regard. 24 To capture as many of the identified key changes 25 that tie knows will be required and to attempt to fix 148 1 them, well, I come back to the point. If I could have 2 done all that, then yes, this issue probably wouldn't 3 have arisen and we'd have been going forward with the 4 stable design. 5 Q. But by that time you perhaps would have been aware -- 6 were you aware that the MUDFA contract was running late 7 and that was going to be a change that would arise under 8 the contract? 9 A. My -- my understanding -- I certainly personally wasn't 10 aware that the MUDFA contract would potentially generate 11 a major change, not at that point in time. 12 I knew there were problems. There are always 13 problems. I wasn't aware of the extent of the problems, 14 and to be fair, I don't (inaudible). 15 Graeme Barclay reported directly to Steven Bell. 16 I'm not certain Steven understood the full extent of 17 what -- and perhaps Mr Barclay didn't either -- the full 18 extent of what we were going to uncover and things that 19 were going to delay that project. The issues that 20 delayed that project were legion, and unfortunately, on 21 31 March 2008, weren't fully understood. 22 Q. Were they understood at all? 23 A. Because they were discovered on a daily basis. 24 Q. Were you aware that they were being discovered on 25 a daily basis, that problems were arising? 149 1 A. I wasn't aware of the extent of the problems at that 2 specific time, no. I was -- I was aware of some 3 reporting at tie executive meetings on the ones that 4 I attended that there had been problems. But, you know, 5 frankly, I wasn't particularly tuned into those. 6 Q. In terms of looking at the content of design, you have 7 referred that there was a design freeze from a date in 8 November. We are now in March 2008. Another four 9 months had passed. Were you aware that the design was 10 continuing to develop during that time? 11 A. That's not -- that's not in my competency. I wasn't 12 aware of the design. I never looked at the design. 13 Q. Would you expect the design to have continued to develop 14 during this period or did you think it was all stopped? 15 A. Again, I don't think I'm competent to answer that quite 16 honestly, in the context of a tram project. 17 Q. Well, I'm not really asking for your experience as 18 a designer. I'm simply saying as someone who was 19 negotiating the contract, what was your understanding in 20 relation to what was happening to the design? 21 A. My understanding was that SDS were slipping in some 22 design elements as far as I'm aware. In delivery of 23 design. But I don't have any detailed understanding and 24 I don't have any detailed recollection of it. I'm 25 sorry. 150 1 Q. Do you have any understanding of changes that were being 2 made to the content of the design in those four months? 3 Whether or not -- 4 A. No. 5 Q. Even whether or not changes were happening? 6 A. My understanding -- I don't know how many times I can 7 answer this. I didn't have a detailed understanding of 8 design. Steven would have been in a much better 9 position to understand changes to the design than I was. 10 Q. You referred there -- I think you read something in the 11 paragraph, that's the second paragraph of 12 Andrew Fitchie's letter, the suggestion that you capture 13 as many identified key changes that tie knows will be 14 required and to attempt to fix them and agree their 15 likely programme and/or cost impact with BBS prior to 16 contract award or at least identify the reasonable range 17 of programme and cost impacts. 18 I think what you were saying is if you could have 19 done that, there might not have been a problem in the 20 first place. 21 A. Well, it seemed a bit superfluous. When I read this 22 again -- I don't recall this stuff, but it seemed, in 23 reading it again and interpreting it, (inaudible) fix 24 all the changes and identify all the changes and then 25 you won't have a problem with unforeseen changes. 151 1 I suspect that even if we'd had the opportunity and 2 looked at all the potential changes that were understood 3 at that moment in time, that more change could possibly 4 have arisen. 5 Q. We see at the top of the email, the first email in the 6 chain is one from Geoff Gilbert in response to that? 7 A. Yes. 8 Q. Before we look at that, I would like to -- keep this 9 email to hand. If you could have your statement, 10 please, and look at page 39 of it. 11 A. Yes. 12 Q. If we look at paragraph 46 at the foot of the page? 13 A. Yes. 14 Q. What we can see in paragraph 36, it narrates the terms 15 of a different version of this email. This email chain, 16 sorry. It starts with the same email from Ian Laing at 17 Pinsent Masons, noting that there would be an immediate 18 Notified Departure. You can see that at the foot of the 19 page, 39. 20 A. Mm-hm. 21 Q. Then if you go over the page, to page 40, in the first 22 paragraph of the page, you can see reference to the 23 email from Andrew Fitchie dated 31 March, where it gives 24 an excerpt of some of his advice. Do you see that? 25 A. Yes, mm-hm. 152 1 Q. Then in this email chain, as your statement notes, you 2 give a response to that. It says, in response to 3 Mr Bell in the same chain, you stated: 4 "My view is that if we pursue Andrew's steer on 5 this, we will open up the whole can of worms on the 6 Infraco contract cost overall, and that we have to take 7 on the chin that the programme version is not 8 consistent, get the deal signed and then fight the 9 notified departure tooth and nail. I understand 10 Andrew's point but if we were at all hopeful of getting 11 this done by the 15 April (this year) we cannot take his 12 suggested approach." 13 Just in terms of your email and what you said about 14 it, what did you mean, the whole can of worms of the 15 Infraco contract cost overall? 16 A. Well, I think I went on to explain this to some degree 17 in my statement. We have still got the document on the 18 screen here, by the way. 19 From my perspective, we had two peers in the design 20 company and the construction company, and getting them 21 into alignment had proved a very difficult task and 22 hadn't been achieved, effectively. 23 My viewpoint was that the only way to get this 24 contract into that alignment was to get the contract, 25 get the design contract novated to Bilfinger Berger and 153 1 make them effectively the prime contractor in this 2 arrangement who were able to express their -- dictate to 3 SDS, and what was required and when. 4 I think, as I said in my statement later on, I think 5 my choice of language might have been better than the 6 whole can of worms, but anything that required -- I'm 7 sorry, could you take the document off the screen here, 8 please? Because I feel I'm talking to a document. 9 CHAIR OF THE INQUIRY: Does the witness have the same screen 10 as us? 11 MR LAKE: The witness can see what we can see in the 12 right-hand corner of that screen. I don't know if I can 13 ask the video operator to revert to -- 14 A. We are back to the document again. 15 Okay. 16 It's kind of difficult talking to a document. 17 My viewpoint is that if we had to go through this 18 process, and I can only surmise that there were many, 19 many attempts by the people involved, tie side, to get 20 alignment between the infrastructure contractor and the 21 designer, then -- then we could potentially have chased 22 our tail for a long time and never got to the end of it. 23 My viewpoint was that we had to translate this 24 contract into a design and build contract by achieving 25 that novation and once we'd done that, we would then 154 1 challenge Notified Departures, challenge changes, and 2 only accept those which were outwith, we felt, the 3 normal degree and normal design development. 4 That was the rationale for that. 5 Q. Is that -- 6 A. We had a -- 7 Q. Is that what you meant by fighting tooth and nail? 8 A. Yes. I mean, at the end of the day, it was basically to 9 say that, you know, any change that was going to come 10 forward, bearing in mind the amount of money that had 11 been paid to the Infraco and to SDS for the novation, 12 would be challenged in the context of that. 13 And, you know, there's always, in any project, 14 a project plan is a living document. And the critical 15 path may well have suggested that a given area, for 16 example, that was supposed to have been cleared, like 17 Haymarket, and the works of Infraco are required to 18 start there, may well not have been. 19 However, there may well have been an area that was 20 cleared, and whilst it wasn't in the programme to be 21 done before Haymarket, it may well have been a suitable 22 alternative. 23 So if a suitable alternative like that emerged, we 24 would have made a case to the builder to say: we 25 understand that we can't progress there, but we can 155 1 progress here. We don't consider that involves any 2 substantial change or any downtime or idle time for your 3 people. 4 You know, so the costs should be minimal in that 5 regard. 6 So that kind of -- that kind of dialogue was going 7 to have to come after the contract. 8 But I would make the point that that would have come 9 irrespective of whether everything had been hygienic and 10 clean at the start of this process. That would have 11 come, because events would have overtaken it. Things 12 would have emerged, you know, that ... 13 Q. If we go back to the paper versions of the email that 14 you had, it's document ending reference 933. 15 A. Document reference what? 16 Q. It's email we were looking at a minute ago. 17 A. Right. 18 Q. The reference for it is CEC01465933. 19 A. Yes, I've got it. 20 Q. If we look back to the very first email in that chain on 21 the paper one, it should be an email from Geoff Gilbert, 22 to Andrew Fitchie, you and Steven Bell. 23 What he says is, it's addressed to you, "Jim": 24 "My view is that we need to: a) confirm the 25 agreements made with SDS on how the differences between 156 1 V26 and V28 will be dealt with eg where and how they have 2 agreed to pull back those dates; b) identify the impact 3 of these mitigations and any unmitigated changes from 4 V26 on the BBS critical path. This presumably shows 5 that their critical path is unaffected. Then agree this 6 position with BBS; (c) include the agreed SDS 7 mitigations in the Programme Schedule." 8 Now, getting the agreement with SDS and then 9 identifying the impact and agreeing this position with 10 BBS, did you take that to be essentially saying we 11 should proceed largely as Andrew Fitchie as directed? 12 A. Well, no. I mean, again, I mean, it's very easy to -- 13 with respect to Geoff, to lay out (a), (b) and (c) here 14 as to what should be done and what have you. But the 15 reality is, and Geoff had been involved in this process 16 a lot longer than I had, from the previous (inaudible) 17 throughout the procurement. We couldn't get these 18 people into alignment. That's the reality of it. 19 Q. So what was -- 20 A. So what he's saying -- what I read this email to say is 21 get an agreement between SDS and BBS as to what the path 22 is going to be and wholesale agreement and alignment on 23 that. 24 My understanding was that that's entirely what had 25 been attempted for the preceding 18 months and hadn't 157 1 been achieved. 2 So to say that we were now going to achieve this in 3 a couple of weeks seemed ambitious to me. 4 Q. So what was done after that email exchange? 5 A. Well, at the end of -- at the end of Andrew's email, he 6 has a paragraph that says: 7 "This is one where Steven and Geoff must, I feel, 8 have a better sense of how factually to restrict BBS's 9 ability to exploit this. After this review, we might be 10 able to go about trying to structure ..." 11 I would have to defer to Steven on that. I don't 12 know. I can't remember what happened. I'm assuming 13 they must have discussed it and come to a way ahead on 14 it. But it's something I presume Steven will be getting 15 this -- you know, review at some point. So it's 16 something that I think he needs to answer. I simply 17 can't remember. 18 Q. What was -- you were working with Steven Bell on these 19 negotiations? 20 A. Yes. 21 Q. What was your -- the role of each of you in conducting 22 these negotiations? 23 A. Well, I think Steven as a Director of tie had the prime 24 responsibility, and I was assisting. You know, I had 25 general experience of contract negotiation and -- and 158 1 I'm bound to say that in the context of this 2 negotiation, having been landed in this in January after 3 something like eight months prior to it, ongoing 4 procurement effort, that we didn't have a terrific hand 5 of cards to play in terms of negotiation leverage, with 6 a bidder that had already been signalled as preferred 7 and suchlike. And the contract structure that clearly 8 wasn't working. 9 So my role was assisting Steven in this regard, and, 10 you know, helping articulate the argument from a tie 11 perspective. 12 And I think I did that reasonably well, and, you 13 know, I think Ian Laing would maybe attest to that. 14 Q. I want to ask you now some questions about MUDFA. I'm 15 finished with that email chain. 16 A. Okay. 17 Q. You said you were transferred to carry out a review of 18 MUDFA around the time of contract close in May 2008; 19 have I got that correct? 20 A. Actually, around about the middle of April 2008, I had 21 personal reasons, I needed to go to the United States. 22 So I was out of play for two or three weeks, and when 23 I came back, I was asked to attend that -- I was asked 24 to go down to MUDFA and I was asked to come back for 25 a date on that meeting with the good Mr Enenkel. But 159 1 largely from about May, I went down to Leith and was 2 involved in the MUDFA project. I carried out an initial 3 audit on the project. 4 Q. Was there a reason that you were asked to go down there? 5 Were there concerns about the MUDFA project? 6 A. Well, there clearly was. There was clearly -- whether 7 it was an anticipatory reason or whether it was 8 a factual reason, I can't remember. By that I mean 9 whether the fears had crystallised or whether there were 10 concerns that there might be problems, I can't really 11 remember. But when I went down and had a look at it, 12 then I certainly did discover that there were problems. 13 Q. What were the problems, in outline? 14 A. Well, one problem was that the contractor side, 15 Carillion contractor side, and the tie side weren't even 16 meeting on a weekly basis. We'd no progress meetings 17 happening. The dialogue seemed to have broken down and 18 there seemed to be all sorts of personality conflicts, 19 and I found that -- I found the Programme Director from 20 Carillion who, from my perspective, in fairly simple 21 questions, didn't really seem to understand what was 22 improving on. 23 Q. In this regard, I would like to ask you to look at two 24 documents again. They have got sequential numbers 25 because it's email and an attachment. It's CEC01145982. 160 1 A. 5982? 2 Q. Yes, that's the email. The attachment is obviously the 3 one that ends 983. 4 A. Sorry? 5 Q. The attachment to it, do you have that as well? It's 6 the one that ends with the number 983. 7 A. Yes, I've got the attachment. 8 Q. The first one of those we can see is an email from you 9 to Steve Bell dated 28 January 2009, saying: 10 "As requested a note outlining today's proceedings 11 in brief." 12 Then if you go to the second document, which is 13 CEC -- it's already there. 14 In letter form. It says: 15 "Steven, in discussing the problems and issues which 16 are currently facing the MUDFA Programme today, a number 17 of key issues emerge." 18 Before turning to those issues, is this you 19 essentially reporting the results of your review? 20 A. No, no, this was after. This was substantially after 21 review. The review that I reported -- I -- a document 22 still in existence, but I recall around about July or 23 something of 2008, making some summary recommendations 24 of what we were required to do across the piece in the 25 MUDFA, and one of them was to replace the Programme 161 1 Director from the supplier. 2 So that was achieved long before January 2009. 3 I would have thought that was round about 4 July/August 2008. 5 Q. Sticking with this document then, looking at the 6 numbered paragraphs with what you describe as the key 7 issues, 1 is: 8 "Communication of important data across the project 9 is at best patchy and wholly unacceptable." 10 2: 11 "There is no doubt that the job is of a level of 12 complexity that has been wholly underestimated." 13 3: 14 "The level of co-operation between the tie staff and 15 the Carillion staff is sub-optimal and resulting in many 16 untrapped issues. 17 Underpinning these difficulties is an admitted 18 position from Carillion that they do not have the 19 requisite quality of staff on the job, I put this to 20 Steve Beattie and he accepted the point and was 21 supportive that we should raise the matter with the 22 Senior Management within Carillion." 23 Now, the first question, who was Steve Beattie? 24 A. Steve Beattie was the programme director that came in to 25 replace the Programme Director whose name escapes me 162 1 now. But I found to be not of the quality we required. 2 Q. He seemed to accept the point that you were making that 3 they didn't have the requisite quality of staff carrying 4 out the work? 5 A. That's what it says here, so I presume I'm stating the 6 truth there. 7 Q. These three points, in the numbered paragraphs, were 8 they things that had been apparent to you throughout 9 your review, or were they just emerging towards the end 10 of 2008, into you giving this report at the start of 11 January 2009? 12 A. I think -- I think the answer is a bit of both really. 13 You know, obviously, as I went down there and understood 14 what was happening, particularly in relation to point 2, 15 the level of complexity that the project was facing is, 16 I think, I noted in one of your other emails. I walked 17 the full length of the route and had a look at some of 18 the issues that -- that the project was facing, and 19 there was no doubt that the complexity of this thing had 20 been totally underestimated. 21 And it was a bit -- I likened it to building a ship 22 in a bottle because the reality was that it was hugely 23 difficult to, you know, segment off the areas that we 24 were looking to move the utilities in, and we often 25 didn't have the requisite health and safety space to do 163 1 it. 2 So there were a lot of issues. I was speaking to 3 a utility, senior utility person just last week, and 4 he -- he was of the view that it's hardly controversial 5 to say that utilities don't have an accurate record of 6 where their utilities are. 7 So -- and in those three points, point 2 is 8 certainly something that I acquired a much greater 9 understanding of over months that ensued. 10 Q. You raised a couple of issues there of things that 11 presented problems, and one of them was the complexity 12 of the work in terms of what was in the ground? 13 A. Yes. 14 Q. Another was the fact that the records being provided by 15 the utility companies were poor, inaccurate? 16 A. Indeed. 17 Q. In your statement you also refer, and it's essentially 18 what you say in this report too, that you were unhappy 19 with the performance being given by Carillion? 20 A. Indeed. 21 Q. Did that change, your view of Carillion? 22 A. I think what happened, you know, can I ask a legal 23 question here? Am I at any risk -- well, I know I've 24 got to tell the truth or not, which I am doing, but I'm 25 not at any risk of Carillion coming after me here, am I? 164 1 CHAIR OF THE INQUIRY: No, you're not at risk of any action, 2 sole action of defamation or anything of that sort. (a) 3 assuming you're telling the truth, but also, even if 4 it's not true, as long as you're not being malicious. 5 A. Well, my Lord, thank you for that clarification. 6 I think my concern is that -- and you will understand 7 this -- that it is ten years now since some of this -- 8 has been going on for ten years, and I don't have any 9 proof of what I'm saying. So all I can give you is an 10 opinion based on my recollection of the time. 11 My recollection of the time was that we carried out 12 the audit and there was an immediate improvement from 13 Carillion. They saw me, I think, as new person in town, 14 and there was an upswing in their performance. 15 They made representations to tie that their contract 16 was onerous, they'd inherited the contract from 17 MacAlpine, and that the contract was unfair in the way 18 that it was holding them to account for dealing with 19 a lot of stuff that hadn't, you know, been originally 20 foreseen. 21 Steven took a very hard line on this, and his view 22 was the contract may have been inherited, but it was 23 a contract that was signed in good faith, and as an 24 experienced practitioner, they should have been aware of 25 its dimension when they were buying over MacAlpine and 165 1 buying over whatever they were inheriting from that. 2 They made repeated representations to us for 3 additional monies, and they were repeatedly rebuffed in 4 that regard. As that process continued, my perception 5 was that their performance started to dip because 6 I think there was enormous passive aggressiveness about 7 them not doing their job, you know, or not focusing all 8 their energies in getting this job done. 9 So that was what happened in the context of that 10 relationship. 11 MR LAKE: Could I ask you to look at something in the 12 relationship a little bit further on then. Once again 13 it's an email and attachment, and the references are 14 CEC00959119 and the attachment to it, which is 15 CEC00959120. We will take the email first. 16 A. This is date 16 April 2009. 17 Q. Yes. It's an email from you to Steven Bell, Susan Clark 18 and Dennis Murray? 19 A. That's right. I've got it. 20 Q. You say: 21 "Steven, I’ve redrafted this paper with greater 22 focus on the executive summary and a summary view on 23 options together with a de-duplicated detail on the 24 options empty." 25 And it's for his review? 166 1 A. Yes. 2 Q. If we look at the attachment to that, the document that 3 ends 120, you will see it's headed "Executive Summary". 4 If we look at that, and we look at the introduction and 5 the three paragraphs underneath it to start with, you 6 can see the third of those paragraphs says: 7 "For performance, quality and cost reasons it is now 8 considered that the timing is right to close the MUDFA 9 programme, while recognising that there is still an 10 outstanding workload to complete. The tie MUDFA team 11 have reviewed the options available and these are 12 discussed in some detail in the attached option paper." 13 Now, was that a review that had in fact already been 14 performed, not only by you, but by Steven Bell, 15 Susan Clark and Dennis Murray as well? 16 A. I think I had expressed the view a lot earlier than 17 that. I think it was probably around about the 18 preceding quarter, September 2008. October 2008. That 19 we were -- that we should explore this as an option. 20 The reality was that whilst we had a contract, the 21 performance against the contract wasn't matching our 22 expectation. And there was a -- there was certainly -- 23 I can understand that there was comfort in the contract 24 because it had a fixed price, and actually in this 25 context a fixed price was sticking. When I left tie in 167 1 November 2009, as I recall, the fixed price had still -- 2 had still remained. 3 But my concern was that in the greater scheme of 4 things, there was something we weren't getting the 5 progress we needed, and in that sense I felt that we 6 should consider, you know, finishing the contract and 7 stopping the contract, and giving the works to other 8 people. 9 Q. If we could look at the second paragraph here, the one 10 that's headed 2, "Commercial". If we could look at the 11 heading and the text underneath it? 12 A. Yes. 13 Q. It's particularly the second half of the paragraph I'm 14 interested in, but we will look at the whole of it: 15 "There are a number of key commercial issues 16 presently with Carillion, who have found the contract for 17 measure agreed and signed to be disadvantageous to them 18 and in their view does not recognise the additional 19 scope and complexity they have required to deal with, 20 and accordingly a number of claims for extension of 21 time, and monthly claims on delay and disruption have 22 been lodged." 23 I think that's what you've referred us to; is that 24 correct? 25 A. Yes. Yes. 168 1 Q. "In tie's view, the impoverished performance, 2 particularly in the earlier stages of the contract, has 3 been causal in large measure of the delays experienced. 4 Discussions are ongoing on these issues, there is 5 little doubt however commercially that the earlier this 6 contract is concluded, the better." 7 So really that's -- you were sufficiently 8 dissatisfied with the Carillion performance that you 9 wished to get out of the contract as soon as 10 practicable. 11 A. I was keen to get the job done, and in the course of my 12 weekly progress meetings, I had become incredibly 13 frustrated at agreeing a line of progress to be made in 14 the week ahead, and that not being achieved. It 15 certainly didn't sit well with me. It's not what I was 16 used to. 17 So you take that for so long before you -- as the 18 CEO of GE was famous for repeating: if you can't change 19 the people, change the people. That was my perspective 20 on it. 21 Q. Could we go to the second page of this document, please. 22 If we can look at the heading, "Recommendations", and 23 the first three paragraphs underneath it. 24 A. Yes. 25 Q. You can see your principal recommendation number 1 is: 169 1 "The MUDFA programme is closed down by no later than 2 31 July 2009 and the required consolidation of the tie 3 MUDFA resources to the Infraco programme to commence and 4 conclude in June 2009." 5 Is that saying the closing down of the MUDFA 6 programme is obvious, but is that saying that thereafter 7 the MUDFA works would be administered through the 8 Infraco programme? 9 A. I don't know -- I don't think that was necessarily the 10 case. 11 Q. What did you -- 12 A. Because I think the -- I think we had other -- tie had 13 other -- had recruited people, notably a very excellent 14 chap called Frank McFadden who had long tooth experience 15 of doing this kind of works. And I think the reality is 16 that some of this may have been -- I think the reality 17 was that some of this was done outwith the Infraco 18 contract. By engaging directly with another supplier. 19 Q. Just looking at engaging with other suppliers, we see in 20 paragraph 2 and paragraph 3, you respectively suggest 21 that diversion works in section 1a at Ocean Terminal and 22 Section 7, which is at the airport, should both be 23 removed from the Carillion MUDFA scope of works and let 24 out to other contractors. 25 Is that broadly what you're suggesting? 170 1 A. Yes. 2 Q. That's the two ends essentially of the tramline? 3 A. Yes. 4 Q. You note there that they should be awarded under the NEC 5 contract. The existing MUDFA contract was a bespoke 6 contract. Was there any reason for preferring NEC to 7 the -- a re-run of the bespoke contract? 8 A. To be honest with you, I can't really recall. 9 I must have taken some advice on that, from more 10 experienced practitioners in that area, but I can't give 11 you any clarity on that. 12 Q. Then if we enlarge paragraphs 4, 5 and 6, paragraph 4 13 says: 14 "MUDFA utility diversion works remaining post 15 31 July 2009 to be removed from the Carillion MUDFA 16 scope and procured/awarded to either the individual 17 utilities (subject to the scope and availability and 18 willingness of the SUCs to carry out the works) or 19 a suitable contractor following a competitive tender." 20 So that's saying the two ends had been awarded away 21 one way and this is all the work in the middle also to 22 go to another contractor? 23 A. Yes. 24 Q. Now -- 25 A. Basically taking Carillion out of the picture 171 1 altogether. 2 Q. That was done, wasn't it? That was approved and carried 3 out? 4 A. Yes. 5 Q. An agreement was concluded with Carillion to take them 6 out of the contract. Were you involved in the 7 negotiation of that agreement? 8 A. Can you tell me when it was? 9 Q. I'll see if I can find out for you. Excuse me one 10 moment. 11 Neither party thought to write in the date. It's 12 been left blank 2009. 13 A. Truthfully, I can't recall being in that -- in that 14 meeting. 15 Q. Right. 16 A. And I'm conscious of the fact that I left tie in 2009, 17 and I was moved back from the MUDFA programme circa, 18 I think, the August, July or August 2009. So I may not 19 have been involved with that. 20 Q. Do you have any recollection as to why certain terms in 21 the contract would be agreed then? 22 A. Can you give me an example on that. I'm not sure. 23 Q. One of the terms of the contract were that Carillion 24 were to be given an extension of time for their works, 25 so as to in effect it would extinguish any claim that 172 1 tie might have against them for late performance of 2 their works, and the question would be whether or not 3 that was done in recognition of the fact that delays 4 hadn't been Carillion's fault, or it was done to dispose 5 of the delay issue. 6 A. I don't -- I don't specifically recall that. 7 In the context of Carillion's fault, I do believe 8 that, you know, there were issues that occurred that 9 weren't Carillion's fault. It would hardly be a fault 10 that we'd found hundreds of dead bodies outside 11 a graveyard perimeter wall, or that we found 12 a World War II bomb shelter or we found that 13 Princes Street was hollow underneath when everybody 14 thought it was solid. 15 So there certainly were areas where you couldn't 16 really ascribe fault to Carillion in that regard. 17 I will stress the view that Steven was certainly 18 prone to making. They were an experienced contractor 19 and they should have understood some of the pitfalls and 20 some of the issues that they would encounter as part of 21 their bid process. 22 Having said that, of course, they inherited the 23 contract from MacAlpine. So they may well have taken 24 a different view. 25 Q. Without going through your statement in detail, I think 173 1 it's fair to say there are a number of places in your 2 statement where you record your dissatisfaction with the 3 performance of Carillion. 4 A. Yes. 5 Q. Do you consider that they had no responsibility for the 6 delays or just weren't entirely responsible for the 7 delays? 8 A. I think there were instances where they weren't 9 responsible for the delay, but I think there was a lot 10 of instances where they were. In the context of their 11 performance as a contractor. 12 MR LAKE: Thank you very much, Mr McEwan. 13 My Lord, those are the only questions I had for 14 Mr McEwan. 15 CHAIR OF THE INQUIRY: Are there any, Mr Dunlop? 16 MR DUNLOP QC: My Lord, there's a couple of matters that are 17 not quite arising as I anticipated from the statement of 18 the witness, in particular with regard to the finality 19 of the Wiesbaden Agreement, and to the involvement of 20 DLA therein, and I would appreciate ten minutes to 21 explore those matters with the witness. 22 CHAIR OF THE INQUIRY: Mr McEwan, Mr Dunlop will ask some 23 questions now. He's representing DLA Piper. 24 MR DUNLOP QC: I'm obliged, my Lord. 25 Examination by MR DUNLOP QC 174 1 MR DUNLOP QC: Mr McEwan, you were asked about the finality 2 of the Wiesbaden Agreement. Could you go back to your 3 statement, please, which you hopefully still have in 4 front of you. It's reference TRI00000057. Page 24 in 5 that statement. 6 A. I've got that. 7 Q. If you see, it's at the top of the page, if we expand 8 the first half of the page, question 16, and then there 9 is a subparagraph B and then a sub-subparagraph 1. Do 10 you see that? 11 A. Yes. 12 Q. "What was your understanding of the purpose and outcome 13 of the Wiesbaden discussions and agreement?" 14 Your answer is: 15 "To achieve solid agreement on cost and delivery 16 timescales for 1A." 17 A. Yes. 18 Q. Is that correct? 19 A. Yes. Mm-hm. 20 Q. So what was the point of solid agreement if after that 21 agreement, everything was still up for grabs? 22 A. Is that your question? 23 Q. Yes. 24 A. Well, I think the ambition was to achieve a solid 25 agreement. I think the perception was that that -- 175 1 certainly the initial perception was that that had been 2 achieved, but quickly it became known that it hadn't. 3 Q. Insofar as matters were agreed at Wiesbaden, and they 4 were signed off as agreed by Mr Gallagher, then they 5 were taken as agreed, were they not? 6 A. In the context of that agreement -- I'll be honest with 7 you. I'm not -- I wasn't particularly involved in the 8 Wiesbaden Agreement, and got a presentation, if you 9 like, along with many other staff on what the outcome 10 had been. So I don't know exactly what was agreed or 11 what wasn't agreed, and what the latitude for or 12 conditions on that agreement were, and what the 13 potential for change in that agreement was. 14 Q. What you said at the outset of your evidence, Mr McEwan, 15 was that you were given a list of matters that hadn't 16 been agreed at Wiesbaden, and asked to finalise those. 17 Now, that is the position -- 18 A. No, I don't think I did say that actually. I said that 19 that I had been given a list of matters that had to be 20 agreed. Whether those were changing what was happening 21 at Wiesbaden or not, I'm not altogether sure. They may 22 have arisen subsequently to Wiesbaden. 23 Q. Okay. Well, if you think about the Wiesbaden Agreement, 24 please, can you tell his Lordship which material aspects 25 of the Wiesbaden Agreement did you alter in subsequent 176 1 discussions? 2 A. I have already stated that I'm not sure what the 3 Wiesbaden -- that I'm not fully embraced with what the 4 Wiesbaden Agreement was and what the conditions on it 5 were. I think there was clearly some movement in the 6 cost based on the menu list of items that we had to deal 7 with post January 2008, and some of those may well have 8 arisen, you know, after the Wiesbaden Agreement, and in 9 fact I suspect they did. You know, I mentioned the 10 tiresome viewpoint of the street furniture and the 11 Edinburgh Council having given -- Department of 12 Edinburgh Council having a predilection for a specific 13 form of street furniture which was more pleasing to the 14 eye. That may have arisen after the Wiesbaden 15 Agreement. That was -- for some reason that's an 16 example that sticks out to me on that list. I can't 17 tell you what was all on that list. I don't know. 18 Q. If you have the Wiesbaden Agreement in front of you, 19 please, or on the screen at least, it's CEC02085660. 20 A. Yes. I'm sorry, I'm accessing this on a different 21 laptop. Right, I've got it. 22 Q. I wonder if we could have it on the screen here, please. 23 Thank you. 24 If we go to page 9, please, we see it's -- 25 A. Page 9? 177 1 Q. It's actually listed as page 5 on the original document, 2 but if you see the underscore? 3 A. Oh, right. 4 Q. 0009 reference for the Inquiry. 5 A. Right, I've got it. 6 Q. Do you see it's been signed by Willie Gallagher on 7 20 December 2007 for tie? 8 A. Yes. 9 Q. And just wondering, what is it substantial or material 10 that you say, if you look back through that agreement, 11 was the subject of change, material change, in the 12 period post-Wiesbaden? Is it just things like figures 13 or was there any alteration to the fundamental precepts 14 upon which that document proceeds? 15 A. I honestly don't think I'm qualified to answer that. 16 I don't know. 17 Q. Well, I'm asking you, Mr McEwan. If you just -- 18 A. There are clearly aspects like the novation of SDS as 19 set out in the novation plan. 20 Q. The reason I'm asking you, Mr McEwan, is that you have 21 indicated to the Inquiry that this was not set in stone, 22 that it was all up for grabs, and I'm just wondering 23 what was it that you treated as up for grabs, what was 24 it that you renegotiated? 25 A. I don't recall saying everything was up for grabs. 178 1 I think the reality was -- the question I was asked 2 earlier was: was this set in stone; and I'm expressing 3 a view that clearly, given that it didn't hold, it 4 obviously wasn't set in stone. 5 I come back to the menu list of items that we were 6 asked to debate and get over the line with Bilfinger 7 Berger and the consortium, that -- I would have thought 8 that list must exist somewhere. And some of those 9 undoubtedly would have a potential for changing what was 10 agreed at the Wiesbaden Agreement. 11 What those were now, I simply can't remember, and 12 whether they occurred prior to the Wiesbaden Agreement 13 or post the Wiesbaden Agreement, I suspect the answer to 14 that is more the latter than the former. It may well 15 have been different timescales or something or whatever. 16 I'm sorry, I can't give you any more detail than that. 17 Q. Okay. If you go back to page 7 in the document, please? 18 A. In the Wiesbaden Agreement? 19 Q. Yes. 20 A. Yes. 21 Q. Now, you will remember my learned friend, Counsel for 22 the Inquiry, asking you about the provision in Schedule 23 Part 4 and telling you the provision that caused the 24 problem. If you look to the top of the page, please, in 25 the Wiesbaden Agreement, "For the avoidance of doubt". 179 1 Do you see those words? 2 A. Yes. 3 Q. Those are the same as the words that Counsel to the 4 Inquiry explained to you became problematic, aren't 5 they? 6 A. I can't swear to it being exactly the same, but it looks 7 the same. 8 Q. So when he suggested that it might have stemmed from 9 Wiesbaden, he was obviously correct, wasn't he? 10 A. I can't really comment. I don't know. 11 Q. Okay. 12 A. It may have been before Wiesbaden. It may have been 13 after. I don't know. 14 Q. Now, insofar as there were discussions between Wiesbaden 15 and final close, DLA were often at meetings. If you 16 understood there was a contrary suggestion, that's not 17 the case. 18 So it's accepted DLA were often at meetings, but 19 technical and engineering matters were left to you, 20 weren't they? 21 A. Left with who? 22 Q. Technical and engineering matters were left to you and 23 Mr Bell? 24 A. Well, technical and engineering matters were left with 25 Mr Bell. I've got no technical engineering knowledge of 180 1 tram design. But whether -- whether there was a legal 2 opinion required in the technical engineering matters is 3 another matter. 4 Q. Now, some matter -- some meetings, for example, do you 5 remember the Rutland Square meeting that resulted in the 6 Rutland Square Agreement? 7 A. Yes, I was there as an observer. 8 Q. So that was at DLA's offices? 9 A. At Rutland Square, I assume, yes. 10 Q. But there were other meetings that you and Mr Bell 11 attended to agree matters with the consortium that DLA 12 were not at, is that correct? 13 A. No, I don't think that is correct. I think there were 14 matters where things would be discussed, but I don't 15 think there was matters where things would be agreed. 16 Q. Do you remember the CityPoint Agreement? 17 A. CityPoint Agreement? Have I got a document here that 18 refers to it? 19 Q. Well, not -- not presently. I just want your comment on 20 this. On 7 March 2008, 8.6 million was added by way of 21 the CityPoint Agreement? 22 A. Yes, yes, I do remember. I remember that Richard Walker 23 and Mike Flynn came in to address a number of issues 24 that they had concerns of, and which had the effect of 25 adding cost to this proposal. 181 1 Q. And it was called the CityPoint -- 2 A. It was considerably in excess of the 8.6 million that 3 was agreed. 4 Q. It was called the CityPoint Agreement because the 5 meeting took place at the CityPoint offices; is that 6 right? 7 A. Right, yes. 8 Q. And on tie's part the negotiations were concluded by you 9 and Steven Bell alone; is that not right? 10 A. If you're asking was there a DLA representative there, 11 I don't recall. 12 Q. I'm -- 13 A. There may well have been. 14 Q. I'm putting it to you that there was no such DLA 15 representative, and it was you and Steven Bell -- 16 A. Well, I'm putting it back to you that we didn't agree 17 anything without ensuring that DLA were involved in it. 18 Q. So if the Inquiry sees reference, for example, from 19 Mr Bell, to a CityPoint Agreement, concluded without any 20 DLA representation, are you saying that's wrong? 21 A. I think that whether there was a DLA representative 22 through the entire meeting at these things or not, that 23 there would have been consultation with DLA before 24 anything was memorialised into a contract. 25 Q. Okay. 182 1 Now, on the question of design risk, and the 2 involvement in between Wiesbaden and close, you 3 understood that design risk lay with tie, didn't you? 4 A. I understood that the design -- design risk lay with tie 5 when? 6 Q. Following Wiesbaden and up to and including close, you 7 understood that design risk lay with tie? 8 A. No, I didn't understand that. My understanding was that 9 once the contract with SDS was novated to Bilfinger 10 Berger and the consortium, that the design risk for 11 normal design development would be in their bailiwick. 12 Q. If you think back to the email that my learned friend 13 took you to, 31 March 2008. Do you remember that one? 14 A. Mm-hm. 15 Q. It might be of assistance to put it back on the screen? 16 A. Yes, the one from Ian Laing, yes. 17 Q. That's right. And the one from Mr Fitchie, telling you 18 that as soon as the contract was signed, there was going 19 to be a Notified Departure; yes? 20 A. Mr Laing had pointed that out, yes. 21 Q. Mr Fitchie said it was correct, didn't he? 22 A. He did. 23 Q. Your response was not to accept Mr Fitchie's advice, 24 which was try and get as much agreed with the consortium 25 before close. Your response was: fight them tooth and 183 1 nail on every Notified Departure. 2 A. My response was, as I articulated earlier in this 3 meeting, was that what Andrew was recommending was 4 entirely what the parties involved had been unable to 5 achieve in the 18 months of the procurement process 6 prior to it. So recommending that we get everything 7 sorted out to that hygienic level within that time frame 8 was, you know, advice that wasn't especially useful. 9 The reality was that we were looking for SDS to be 10 novated to Infraco and we were looking for that to 11 convey the risk of normal design development, which we 12 couldn't -- nobody could anticipate all the detail of in 13 advance. That's the -- that's the reality. 14 There was clearly an uncertainty in there, but the 15 reality was that in the final agreement, which -- 16 probably the Dr Enenkel meeting, that a contingency was 17 put in by Infraco that in terms of amount of money 18 measured more than the cost of the entire SDS contract. 19 So my understanding was we were moving something 20 which were not explicit. There was a general principle 21 that they were taking on a responsibility for normal 22 design development. 23 Q. I'm not sure I understand that, Mr McEwan, because what 24 was being said was the agreement at the moment is tied 25 to version 26. SDS has by March 2008 moved to version 184 1 28, and accordingly, everyone is telling you there are 2 going to be Notified Departures straight upon the 3 signature of the contract. It's nothing to do with 4 normal design development. This is to do with the fact 5 it's been priced on V26 and we've now moved to V28? And 6 you understood that -- 7 A. You -- you have said Notified Departures. As I read 8 Ian Laing's memo there was an initial potential Notified 9 Departure, not Notified Departures. 10 There was a mechanism in the contract to deal with 11 Notified Departures and there was a contingency within 12 the tie budget to deal with Notified Departures. The 13 reality was nobody knew the extent or otherwise of what 14 those Notified Departures were going to be. 15 Q. Well, in the email that we looked at earlier -- 16 A. I don't have a clear position of the delta between V26 17 and V28. You're making -- do you? Do you have a full 18 detail of what those differences are? 19 Q. Mr McEwan, as I think you know, the way this works is 20 I ask the questions and you answer them. 21 A. Okay. 22 Q. You will recall in the March 31, 2008 email, Mr Fitchie 23 told you that BBS's estimate was bound to be all 24 encompassing and conservative; yes? 25 A. Sorry, say that again? 185 1 Q. Mr Fitchie told you that BBS's estimate on the Notified 2 Departure as to what it's going to cost is going to be 3 all-encompassing and conservative? 4 A. I don't understand that point. 5 Q. Well -- 6 A. All-encompassing and conservative on what? 7 Q. If we can have it on screen, please, it's the last 8 document I want you to look at. It's CEC01465908. 9 MR LAKE: The witness has a limited number of hard copy 10 documents and he doesn't have that version. He has the 11 one that ends 5933 that still records Andrew Fitchie's 12 advice. 13 MR DUNLOP QC: I also want him to look at his own response. 14 Mr McEwan, you may have to look at it on screen, 15 which involves talking to a document rather than to me. 16 I'm sure you'll welcome that. 17 A. That may be better. 18 CHAIR OF THE INQUIRY: Mr Dunlop, he does have a, document 19 but Mr Lake explains a different -- 20 MR DUNLOP QC: What he doesn't have, my Lord, is the top 21 part which I want him to look at. 22 MR LAKE: His own response? 23 MR DUNLOP QC: Indeed. 24 MR LAKE: That's in his statement. You can take it from his 25 statement if you need it. 186 1 MR DUNLOP QC: Can you see the document on screen just now? 2 A. It's not -- yes, I can see it now. 3 Q. So we see -- 4 A. Yes. 5 Q. -- towards the bottom half, that's Mr Fitchie's email to 6 you. On the first paragraph what he says is: 7 "The estimate is bound to be all encompassing and 8 conservative." 9 Do you see that? 10 A. That estimate is bound to be -- yes, I see it, yes. 11 Q. He goes on to say: 12 "The only approach open to tie, in my opinion, is 13 a factual one, not a contractual one (since the 14 mechanism for Notified Departure puts the advantage with 15 BBS by creating an automatic tie change): to capture as 16 many identified key changes that tie knows will be 17 required and to attempt to fix them ..." 18 He goes on to give you that advice, doesn't he? 19 A. Yes, but I've already made the point many times. 20 Do I need to say this? The reality was what he was 21 prescribing, which was a bit of a hand-off, was that we 22 get everything fixed. And what I have said time and 23 time again is that the procurement team had spent 24 18 months trying to get these parties into alignment and 25 hadn't succeeded. 187 1 Q. What he's -- 2 A. So he's giving us advice to say: get it done in the next 3 two weeks, but it was hardly likely to be that useful. 4 Q. What he's talking about very clearly, Mr McEwan, is the 5 difference between version 26 and version 28, and to 6 capture the changes that tie know will happen? 7 A. I'm not sure that that was -- personally speaking, 8 I can't tell you what the deltas between those two were. 9 Q. We saw earlier -- 10 A. And I'm not sure what the extent of them was. There was 11 a potential for a Notified Departure. 12 Q. We saw earlier Mr Gilbert at least agreed with 13 Mr Fitchie's advice, didn't he? 14 A. Well, to an extent. But I mean, at the same time, it's 15 a bit rich because, at the end of the day, Mr Gilbert 16 was involved in looking at the procurement of this and 17 he's fully aware the difficulties in bringing these 18 parties into some form of alignment, something 19 I considered was never going to occur until they were in 20 the one contract, in a design and contract -- I don't 21 know what the deltas were between V26 and V28. 22 I suspect Steven had a greater handle on that. 23 Q. Okay, Mr McEwan, last question. 24 If you go to the top of that page, please, the 25 document we're looking at. We've already looked at the 188 1 part where you say, the third line: 2 "The only approach is to get the deal ..." 3 Sorry, it's not there yet. If the document could be 4 put on the screen for Mr McEwan. 5 A. This is the can of worms thing, is it? 6 Q. Yes. So in the third line -- is that legible to you? 7 A. No, not yet. Yes, it's okay now. 8 Q. So you say: 9 "The only option is to get the deal signed and then 10 fight the Notified Departure tooth and nail." 11 But before you say that, you say this will "open up 12 the whole can of worms on the Infraco contract cost 13 overall". What did you mean by "open up the whole can 14 of worms on the Infraco contract cost overall"? 15 A. I have already apologised. You know, you write these 16 emails at the time and you don't expect to be facing 17 a public Inquiry on them. But the reality was my view 18 was any -- any action that required us to go through the 19 contract again tooth and nail with Bilfinger was only 20 likely to come out with avenues for additional cost to 21 be added. So it would have been basically ripping up 22 what had already been done and starting again. 23 Q. I'm just trying to understand what you meant by the 24 whole can of worms on the contract cost. 25 A. Well, it was an unfortunate choice of phrase. What 189 1 I meant was that we had a contract which, if memory 2 serves me, was 2,000 pages in length. We had 3 a contract, and if the answer to this issue was to try 4 and determine the deltas between what was now and what 5 was then by going through the contract, the 2,000-page 6 contract, then (a) it would have taken a huge amount of 7 time, and (b) -- which was not available to us, and (b), 8 you know, would have certainly represented a risk of 9 greater cost. 10 Can I put a number on that? No, I can't. It was 11 just an intuitive feeling that that would be the case. 12 Q. And on the delta, the two options that were open to you 13 were either to close that delta there by agreeing 14 matters with BBS or, alternatively, fight the departure 15 tooth and nail? 16 A. As far as I'm concerned, the whole thing came down to 17 a question of degree. There was compensation given to 18 both SDS and Bilfinger to take this process on, and any 19 Notified Departure that came in that we adjudged or that 20 tie adjudged to be part of normal design development 21 would certainly be contested because they had been paid 22 to take that risk on, from our perspective. 23 Q. And you chose that route, didn't you? tie chose that 24 route, fight the departure tooth and nail, as opposed to 25 trying to -- 190 1 A. I don't think there was any choice in it. I think that 2 the reality was -- and it's not been mentioned and it's 3 in my statement. The reality was that in May of 2008 -- 4 which I think was the anniversary. I wasn't there when 5 they made their bids in 2007, but I think that was the 6 anniversary of their bid, and on the anniversary of 7 their bid the supply chain that was included within that 8 contract was going to collapse. 9 I'd heard mention that commodity prices had shifted 10 very disadvantageously, and if that was to happen, then 11 there was going to be costs accruing to the project to 12 the extent of tens of millions of pounds. So, you know, 13 you had to view it in the context of that. And the role 14 that I saw and certainly I felt was for tie -- there 15 wasn't a perfect outcome in any of this, but was to 16 pursue the route that represented the less risk. 17 MR DUNLOP QC: My Lord, I'm obliged -- 18 A. And that's what I think we did. 19 MR DUNLOP QC: I'm obliged for the indulgence. 20 CHAIR OF THE INQUIRY: Thank you very much. 21 Thank you very much, Mr McEwan. That's all, and 22 we're grateful to you for appearing via videolink. 23 Technically you're still under citation. So we 24 could come back and ask you some more questions, but 25 hopefully that won't be necessary. Thank you very much. 191 1 A. Thank you very much, my Lord, and thank you again for 2 your consideration in letting me do it via this way. 3 CHAIR OF THE INQUIRY: We will adjourn until 9.30 tomorrow. 4 (4.33 pm) 5 (The hearing adjourned until Thursday, 19 October 2017 at 6 9.30 am) 7 192 1 INDEX 2 PAGE 3 MR MARK BOURKE (sworn) ...............................1 4 5 Examination by MR LAKE ........................1 6 7 MR JOHN CASSERLY (sworn) ............................60 8 9 Examination by MR LAKE .......................61 10 11 MR JAMES MCEWAN (sworn) .............................99 12 13 Examination by MR LAKE .......................99 14 15 Examination by MR DUNLOP QC .................174 16 17 18 19 20 21 22 23 24 25 193