Rural Economy and Connectivity Committee

Meeting date: Wednesday, May 23, 2018

Official Report 507KB pdf

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Major Transport Infrastructure Projects (Update)

Good morning, everyone, and welcome to the 16th meeting in 2018 of the Rural Economy and Connectivity Committee. I ask everyone present to ensure that mobile phones are on silent.

We move straight to agenda item 1, which is an update on major transport infrastructure projects. I invite members to declare any interests that are relevant to the item.

As rail is included, I will do my usual and say that I am honorary president of the Scottish Association for Public Transport and honorary vice-president of Railfuture UK.

I am honorary vice-president of Friends of the Far North Line.

I am a member of the cross-party group on rail and a member of the National Union of Rail, Maritime and Transport Workers parliamentary group.

Thank you. This evidence session is an update from the Cabinet Secretary for Economy, Jobs and Fair Work on the progress of the major transport infrastructure projects for which he is responsible. I welcome the cabinet secretary, Keith Brown, and Michelle Rennie, the director of major transport infrastructure projects at the Scottish Government.

Cabinet secretary, would you like to make a short opening statement?

Yes please, convener. Once again, I thank the committee for the opportunity to provide an update on the major transport projects in my portfolio. Since my previous appearance before the committee, work has progressed at some pace on all the projects for which I am responsible, with significant progress being made across the projects.

First, I will comment on the Aberdeen western peripheral route Balmedie to Tipperty project. As I have previously advised, the AWPR, at 58km in length, is the longest new roads project that is currently under construction in the United Kingdom. It is the equivalent of building a completely new road between Edinburgh and Glasgow. When it is complete, it will provide substantial benefits across the north-east, boosting our economy, increasing business and tourism opportunities, improving safety and cutting congestion, as well as improving opportunities for public transport facilities.

In the statement that I made to Parliament on 22 March, I advised that, following consultation with Transport Scotland’s technical advisers, it would be prudent to anticipate a late autumn 2018 opening date. Although I fully appreciate the contractor’s continued ambition to target a summer 2018 opening, Transport Scotland’s technical advisers on site remain of the view that a late autumn 2018 opening may be more realistic.

I also confirmed at that time that we would continue to work with the contractor to identify whether any further sections of new road could be opened in advance of the whole project. I reassure the committee that, where that is possible without impacting on the timetable for completion of the overall project, we will endeavour to ensure that those sections of road are opened.

Works are progressing well. We saw the Balmedie and Blackdog junctions open at the end of April and the beginning of May respectively, and work is nearing completion on the River Dee crossing.

Elsewhere in the project, work is progressing well, and we are now at a stage where we can start to consider plans for a suitable event to mark the opening of this very significant project, which was first proposed, I think, 65 years ago. I look forward to being able to provide further information on the opening event in due course. Meanwhile, I take the opportunity to thank those who reside in the north-east for their continued patience while the essential works are being undertaken.

The A9 dualling programme continues to make significant strides forward with the news that the second section, between Luncarty and Pass of Birnam, is expected to be awarded in the summer. The contract for advanced tree-clearing works for the A9 Luncarty to Pass of Birnam project is expected to be awarded in early June, with works commencing on site soon afterwards. That will help to de-risk the main construction contracts, ensuring that this important seasonal work does not unnecessarily delay the overall construction programme.

Draft orders for five of the remaining dualling schemes were published recently, collectively representing 36 of the 80 miles to be dualled. It is expected that the draft orders for a further three dualling schemes will be published in the coming months. The dualling programme is one of the biggest transport infrastructure projects in Scotland’s history. We remain committed to completing the work by 2025 and we remain on target to meet that commitment.

Of course, that project is not just about the building of the road. My colleague the Cabinet Secretary for Finance and the Constitution, Derek Mackay, recently attended the launch of a tourism app that is being taken forward by Transport Scotland’s A9 dualling team as part of the Government’s innovative CivTech challenge, which looks to new technology businesses to solve technological challenges. The Highland discovery app has been developed to promote the less-visited rural heartlands of Scotland and will help tourists to navigate the many visitor attractions and facilities on and around the A9 corridor. The app focuses on small community facilities and businesses and includes an in-car audio channel offering Scottish stories and songs.

Design work continues on the A96 dualling Inverness to Aberdeen programme. The work that we are progressing includes a rolling programme of regular engagement with local communities and other stakeholders to ensure that locals, road users and businesses that are affected by the work are kept fully informed. More important, that will ensure that the vital feedback that we receive is taken into account as we develop our plans.

So far, 11,500 people have visited public engagement events on the A96 dualling. As part of that programme of engagement, between 27 February and 2 March, local communities and road users were able to view and comment on proposed changes to the options that are being developed for the 46km Hardmuir to Fochabers scheme. Nearly 1,400 people attended the drop-in sessions over four days, and the feedback that was received has been extremely important to the team as it continues the route options assessment process for that section of the A96 dualling. We are on target to identify a preferred route option later this year.

Building on the early meet the team public engagement events that were held in November 2017 on the 42km east of Huntly to Aberdeen scheme, which were attended by over 1,000 people, we expect to present the options under consideration to the local communities later in the year to allow them the opportunity to provide important feedback that will help to shape our preferred option, which we hope to identify in 2019. Along with our commitment to dual the A9 between Perth and Inverness by 2025, dualling the A96 will ensure that the road network between all of Scotland’s cities is of at least dual carriageway standard by 2030.

Since the M8 bundle project fully opened to traffic on 1 June, we have seen significant journey time savings across the central Scotland motorway network. Finishing works are on-going and are expected to be completed in the coming months.

The committee might be aware that part of the Lagan Construction Group went into administration on Monday 5 February. Lagan formed 20 per cent of the construction joint venture that was charged with delivery of that project on behalf of the Scottish Roads Partnership. Ferrovial Agroman is the other partner, and the contract makes it jointly and severally liable to the Scottish Roads Partnership in respect of its obligations and liabilities. The obligation is now on Ferrovial to deliver the outstanding construction works. Approximately 10 Lagan employees were working on the project at the time of administration. Five have moved on to new employment and five are being re-employed through the project. Lagan is not part of the Scottish Roads Partnership, which is the design, build, finance and operate company that is responsible for the on-going maintenance of the project for the next 30 years. The administration will therefore have no impact on the operation of the roads.

I will move on quickly to Prestwick airport. Since the Government purchased the airport in 2013, we have been clear that it must operate on a commercial basis at arm’s length from both the Scottish Government and ministers. That allows the senior management team at the airport the freedom to pursue the business opportunities that align with the strategic direction of the business. My view is that the airport is moving in the right direction. For instance, recent Civil Aviation Authority figures show that, in 2017, it recorded an increase in passenger numbers of over 3 per cent, to approximately 696,000, compared with the equivalent 2016 figures. Although that is a relatively modest increase, it clearly demonstrates a move in the right direction.

The airport performed well during the recent adverse weather. While conditions across the country were certainly challenging, Prestwick, as ever, remained open and operational throughout the period and it accepted a number of flight diversions from other airports, which are quite lucrative forms of business. I was pleased to hear that the committee has taken up the offer that I made for it to visit the airport, and I understand that that has been arranged for 4 June. That will give members a really good opportunity to tour the airport and hear at first hand about the improvements that have been made.

I thank the committee for the opportunity to update you today. I am happy to take any questions.

Thank you, cabinet secretary. The first question is from Peter Chapman.

Good morning. The AWPR, which is the biggest project, as you said, is very close to my heart and we desperately want to see it in place. It will be a huge boost to the economy, as you rightly said, but we hear that it is delayed again. I would like to explore with you some of the reasons why it has been delayed from the spring to the autumn of this year. Will you inform us of the reasoning behind that delay?

The reasons are really those that I set out in the statement to Parliament. The reasons that have been given to us by the contractor include weather effects and in particular storm Frank, which, as I am sure the member knows, had a huge impact in the north-east. People who live there say that they had never seen a storm like that. Many people say that, for a period of months in some areas, some of the ground that was being worked on was inaccessible because of flooding. That had a major impact. The contractor also says that it has experienced delays in achieving utility diversions. That is one of the reasons that it has given, and it has also mentioned that the collapse of Carillion has had an impact on the supply chain.

The dates were set out by the contractor. We let the contract, and those were the dates that it provided. As you say, it is regrettable that it could not be done earlier but, given that it was first proposed 65 years ago, it is good that we are now at the current stage on what is a huge project. If you think about a motorway between Edinburgh and Glasgow, that is the size of the project. It is the biggest in the UK.

I am sure that you will know from your local observations that the road is very near completion. However, there are other processes that we have to go through, such as a road audit, before the different sections of road can be formally opened to the public. We are advised by the contractor that good progress has been made. It is sticking to its estimate of summer, but we are sticking to what we believe is a more realistic date of late autumn.

I noticed that you slipped in the word “late” in your opening statement, mentioning “late autumn”. I think that, last time we discussed the project, you used the term “autumn”. To me, the use of “late autumn” means that there is still huge concern. It tells me that there is more slippage in the system and that you are softening us up for another announcement sometime soon that it is delayed again. It was quite revealing to me that you said “late autumn” given that, last time you were in front of the committee, it was “autumn”. Can we be sure that the road will be open in 2018?

I think you overestimate my willingness—or ability—to manipulate the committee in that way. However, I am sure that I mentioned late autumn in the statement, when I spoke to Parliament. That is not to suggest that I think that it will necessarily be late autumn. The contractor is still saying to us—on both sides of the contract partnership—that it believes it can do this by the summer. We think that it is quite an aggressive programme that it has to achieve that, and we are keen to make sure that the road is done safely, so we have said autumn.

We will try to complete the project as quickly as possible, and we will also try to open parts of the road as quickly as possible. There is no attempt to soften up the committee. We want to get the road done as soon as possible. We are well aware that, as you pointed out, huge benefits will be produced incrementally as different parts of the road open.

That is good. I am sure that everybody wants to get it open as quickly as possible.

There is one other issue that I need to bring up. We welcome the fact that the Balmedie to Tipperty bit is open, even though it is single track either way, but there is an issue there to do with signage. Local businesses, and one in particular, have had huge problems since the opening of that part of the road. They are almost marooned on the old A90. The signage is absolutely unacceptable. It is a hotel and restaurant business, and it has seen its clientele plummet in the past few days simply because folk cannae find it.

I went past it on Monday on my way down to Edinburgh, and I missed the turn-off. That meant a 10-mile detour all the way to Balmedie and all the way back, and eventually I found the way in. It is hard for somebody who knows the area, never mind somebody who does not know it. The business has fallen off a cliff, and it is simply down to a lack of suitable signage to allow folk to find the place.

We need to be aware of that, because other bits of the road will be opening in a similar manner, I assume, over the next weeks and months. We need to get far better signage. The businesses are really suffering. Times are tough anyway, and this is making a huge difference. I implore you to take that on board. I have been speaking to the Aberdeen Roads Ltd guys in the past few days, and they promised that they would improve the signage, but it has not happened yet.

10:15  

Mr Chapman, I am tempted to say that that is more of a constituency question and you might want to take it up with the cabinet secretary afterwards. I am sure that he has taken on board the importance of signage. Maybe he could acknowledge for the record that signage is important and then we can move on to other questions.

I will be brief, convener. It is a constituency matter and one that the member has raised with me. It was looked at last night by not just the contractor but Transport Scotland, and we will get back to the member on their findings in due course.

Thank you.

I have a wee sneaky question first. Am I correct in thinking that the new road will be called the A90?

Yes.

Yes.

That is fine. It was just that I have not heard that before, although maybe I have.

One issue that has engaged us and that the cabinet secretary referred to in his opening remarks is the collapse of one of the partners in the project, Carillion. We have seen a widespread effect on Carillion-led projects in the public sector, perhaps particularly south of the border. Can the Scottish Government, or other Governments in the UK, learn lessons from the approach that we took, which seems to have largely protected the project from collapse?

Certainly, the way that we have constructed the contracts—in this case, with three partners in the partnership that is delivering the project—has been helpful in as far as, if one partner falls by the wayside in the way that Carillion has, the other two project contractors are jointly and severally, in the legal language, obliged to take up that work, so that it does not come back to the public contracting authority. That has been good. However, we are duty bound to look at what lessons we can learn from the matter as well.

It is a large project, and the successful bid was from three large companies. There is an issue about the extent to which we make sure that Scotland’s small and medium-sized enterprise sector can access such contracts, and Transport Scotland is doing some work on that just now. Although we can feel quite satisfied at the way that the contracts have been constructed in protecting the public purse and the progress of the project, we should nevertheless take whatever lessons we can from what has happened and see whether we can apply those to future projects.

I note press comment today that 78 per cent of public contracts in Scotland go to SMEs. Is there scope for increasing that number, particularly in your area of interest? I imagine that most projects will be led by large companies.

With the AWPR project, one of the main contractors, Carillion, established subsidiary companies, particularly in relation to contract staff and transport fleet provision. I am not sure that that is in the spirit of SMEs, so that is the kind of thing that we want to look at. You are right that the bulk of the work will end up with subcontractors and the bulk of those will be SMEs. Given that 98 per cent of businesses in Scotland are SMEs, we really want to try to increase that proportion from the figure that you mentioned.

I have a slightly different question, which we can probably deal with relatively briefly. I understand that Aberdeenshire Council is asking the contracting consortium for help to deal with repairs on local roads, because a lot of the traffic that would have been on the A90 has gone on local roads. Is the Government involved in that discussion at all and can you make any comment on what the expected outcome might be?

The Government is involved to the extent that we occasionally get correspondence about it but, as the question suggests, that really is about the relationship between the contractor and the local roads authority. Private agreements are often reached between the two, so the Government does not have a direct input into that. We know that there is discussion between the local authorities and the contractors in relation to local roads, but that is a matter for the two parties concerned and not for the Government.

Good morning. In a debate in the chamber a few months ago on future technology for travelling on roads, the transport minister admitted that, for example, the M8/M73/M74 project had not been particularly future proofed in that respect. Although the road is fit for purpose for current car usage, thought was not really given to things such as dynamic lane or speed management, electric charging points or lane usage for autonomous vehicles. With the AWPR project and other large road infrastructure investment projects that the cabinet secretary is looking after, how much future proofing has gone in to ensure that they are fit for purpose in light of tomorrow’s potential technology?

It would probably be good to hear from Michelle Rennie on that. If we think about the actual layout and geography of the M8 bundle, the A9 and the AWPR, we find that they all involve expansions in capacity and the footprint of the roads so, by definition, they are more flexible when it comes to taking forward future developments. The designs of some of those projects were a number of years old, but they should be as adaptable as possible. I think that they will be adaptable because, as I said, they represent expansions. For example, on the A9, having a dual carriageway rather than a single carriageway will mean that it is more adaptable to accommodate some of the things that you mention. Of course, it is our ambition for the A9 to be an electric avenue, with charging points along its length.

Michelle Rennie might want to come in on that.

As the cabinet secretary said, significant work is under way on the A9 on the provision of charging points and the like. Across all our schemes, we include provision for an intelligent transport system to give immediate, online, real-time driver information to drivers as they are on the network. The Forth replacement crossing makes provision for a managed motorway, in which we can control the volume of traffic going on and off that section of the network. All of that helps to alleviate congestion and improve journey time reliability.

We will continue to look at what adaptations we can make to our future schemes. However, as members will appreciate, the preparation and the statutory processes for such schemes take some years. Technology is moving at pace, but nothing has been arrived at as a conclusive measure for the use of autonomous vehicles or other new technology. We continue to work with partners right across the world to look at where that might end up, but we do not want to prejudge the outcome of that work.

Before we leave the AWPR, cabinet secretary, you mentioned that there were problems with the utility diversions. I think that that was in November last year. Will you explain what the issues were? I assume that the utilities had been there for some time and the planning for their removal should have been undertaken at the beginning; I just do not understand why there would be a delay.

I did not mention that we had problems with utility diversions; I said that the contractor, in saying why there have been delays, has mentioned utility diversions. At the start of the project—unusually at the time—I gathered together all the utility providers in a meeting in Aberdeen and told them that we wanted to make sure that there was no question of any delays. Remember that, at that time, we were in the teeth of the situation with the Edinburgh tram project, in which utilities had been by far the biggest issue. People did not know what they were going to find when they dug up the roads of Edinburgh. I therefore got the utility companies together to say that we had to ensure that the work was done as quickly as possible. We had a whole-day event on that in Aberdeen, which, at that time, was unusual. However, the contractor believes that it has had issues with utility diversions, so we are investigating that.

Can you say which utility it was?

I do not think that there is just one, but the one that sticks out in my mind is an oil pipeline. That was a big issue for the contractor—getting permission from the utility provider in that case was an issue. Once the contractor had mentioned that to us, although it is its responsibility to arrange the utility diversions, I intervened on its behalf with the provider to ask for things to be hurried up. In fact, I think that I reported that previously to the committee.

I would have to refer to the record. It is interesting that you say that you tried to head the issue off at the pass and that failed, but these things happen.

Good morning, cabinet secretary You touched on the issue of Prestwick airport in your opening comments. Can you provide the committee with an update on the current level of Scottish Government financial support for the airport, including the total loans to date and expected loans for future financial years, and when you anticipate that the airport will break even and begin to pay back those loans?

We have said since the very start of the process—at that time, we enjoyed relative consensus in the Parliament on the Government’s move to take ownership of the airport, although I think that we do not have that consensus any longer—that it would be a long-term recovery for the airport. The reason for that was that, because so little investment had been carried out previously, a great deal of work had to be done to get the airport back into the correct state.

As I have reported previously to the committee, investment in the airport is on a commercial basis in the form of loan funding, and that attracts a market rate of interest in line with state-aid rules. In the previous financial year, we provided loan support of £8 million to the airport. Rolling that together with previous years, by the end of March this year, we had therefore provided a total of £38.4 million to the airport in loan funding. The budget for 2018-19 allocates further loan support of up to £7.9 million, meaning that there is potential total loan funding of £46.3 million to the end of March 2019.

We have also made it clear in previous statements to the Parliament that further loan funding may be required for Prestwick airport. Any confirmed facility would need to be based on a robust business case and would of course be subject to the availability of the necessary budget provision. To come back to the member’s points, we have not set a time limit for a return to profitability or for the repayment of the loan support provided. We have said that that is what we intend to achieve, but we have not set a timescale for that.

Thanks for that. One issue at the moment is the current pay dispute involving workers at Prestwick airport. Given the scale of the financial input and the fact that the Scottish Government is the main shareholder in Prestwick, is it appropriate that staff there are being offered a pay rise that is below that in the Government’s public sector pay policy and that the airport still does not pay the living wage?

I will not comment on any particular dispute but, when we see the words that the airport operates “at a commercial remove” from the Government, there has to be some meaning to that; there has to be a basis on which the airport is able to take those decisions. However, as the member implies, the airport also has to be aware of the Scottish Government’s position on the living wage. My understanding is that it currently pays the national living wage and that it intends to move to the living wage. I am sure that the member will be aware that the approach of the Living Wage Foundation and the Poverty Alliance, which carry out much of the work in that regard, means that not every organisation that they speak to pays the living wage from day 1, but they all have a plan for moving towards paying the living wage. As I understand it, it is the airport’s intention to do that by, I think, 2020.

But the Government is the main shareholder in Prestwick airport—it is a Government-owned company that does not pay the living wage, which is surely wrong. You mentioned the fact that it is an arm’s-length company, but you are on public record—rightly, in my view—criticising the UK Government for failing to intervene in the proposed RBS branch closures. The point that you made in Parliament was that the UK Government is the main shareholder in RBS and should intervene, so why is the Scottish Government not intervening to ensure that staff at Prestwick are paid the living wage?

I have explained it as best as I can. I do not know any other way to state it. We have to operate under state-aid rules and on the basis on which the airport was bailed out at a commercial remove from the Scottish Government. Many other organisations—the member mentioned the UK Government—and companies do not pay the living wage. In each case, I would be pleased if those organisations and companies had a plan, as Prestwick does, to get to the stage at which they paid the living wage. I am pleased that Prestwick has that plan. As you know, the legal requirement is that it pays the national living wage. Of course, it would be far better—although I know that the member and I differ on this—if the Parliament had the ability to insist on the payment of a real living wage, and then the question would not arise.

A few people want to come in. Richard Lyle is next, and then Gail Ross, Mike Rumbles and John Finnie. Is your question on the living wage, Richard?

No.

I will bring John Finnie in and then come to you.

I will be able to come back in.

You will.

Thank you.

I want to pick up on the points that my colleague Colin Smyth raised. Cabinet secretary, it is unusual to hear you commending the national living wage, which, of course, is short of the real living wage that we want in Scotland. However, I find confusing your use, if I noted you correctly, of the term “commercially removed” shortly after detailing the tens of millions of pounds that the Scottish Government is providing. There has to be a moral responsibility. We have raised issues about funding going to companies that have blacklisted staff or which do not treat their staff well. Is there an opportunity to revisit the issue, commercially removed or not, to reach a situation in which we do not have people who, quite legitimately, are presumed to be Scottish Government employees but who are not in receipt of the real living wage?

10:30  

I do not recall commending the national living wage, but I will check the Official Report. I do not think that the national living wage is what people should be paid; I think that they should be paid the real living wage, which is what I said in response to Mr Smyth. We want to see that for as many people as possible.

Of course, in Scotland, 81.6 per cent of employees, I think, are paid the real living wage. That is the highest percentage in any of the countries in the UK, and we want to keep driving it up. I want to see the airport paying that living wage, and it has a plan to do that. That is what is important. You will know the way in which such things work. Often when the Living Wage Foundation goes in to speak to organisations to encourage them to pay the living wage, those organisations are interested in getting to a stage where that is what people are paid, and sometimes there is a process to achieve that. That is what Prestwick is undergoing.

As has been said, the Government bailed out the airport because otherwise hundreds of people would have lost their jobs; in fact, depending on the assessment that you choose, thousands of people would have lost their jobs. We did that to save jobs in the first place, but, having put in the money—the capital moneys that have gone in to help turn the airport around—we are at a remove from the commercial decisions that the airport makes.

There is a moral responsibility here. We will continue to put the moral argument and the economic argument for payment of the real living wage, and I am pleased that Prestwick, at least, has recognised that in its plan to move to paying everybody the real living wage.

Do you not see any leverage connected with the moneys that you put in? A lot of people would presume that it was significant leverage and that you could say, “You will get this, presuming that you meet the legitimate terms and conditions that we expect for Scottish Government employees”.

As you say, there is moral and other leverage in terms of the arguments that we make. We have done that over time with Prestwick. I like to think that that was part of what helped Prestwick to get to where it is now, as people will be paid the real living wage. I think that Prestwick intends to do that by 2020. I will meet the non-executive members of the board next week, and I will put again the arguments to them. There is not just a moral case for paying somebody a wage that they can live on but an economic benefit to companies in doing that.

You will know that I have said that I believe Prestwick is the jewel in our crown and that, basically, we should do as much as we can to support it. However, I note from your earlier comments that although passenger numbers are up by 24,008 on last year, they have actually fallen by 216,331 since 2014. You also said that the airport was open in bad weather and could cope with other things. You will meet the board next week, and I look forward to visiting on 4 June, when I will press these points. What is the board doing to encourage more air freight and airlines? The only operator is Ryanair. As I have said before, I was in Prestwick one Thursday night at 11 o’clock, and I was the only member of the public in the building on that night before a flight came in. What are we doing to improve and encourage people to go to Prestwick and airlines to operate out of it? Sorry for the long rant.

Cabinet secretary, before you answer that, there is an ancillary question that links into that from the deputy convener. I would like to bring her in at this stage.

My question comes right on the back of Richard Lyle’s question. In February, Ryanair announced that it was closing its base in Glasgow and reducing its flights from 23 to three. Should we not see that as an opportunity, as Richard said, to increase the flights out of Prestwick, given that the airline in question is Ryanair?

On Gail Ross’s point, two or three years ago, the reverse situation occurred, in which Glasgow felt that Prestwick was, if you like, taking business away from it. People know that Ryanair moves around quite a bit. It also had major cutbacks at Edinburgh, and then it reinstated many of those flights and opened additional routes. That is part of the extremely competitive nature of airports, and, in Scotland, the airport sector is extremely healthy. If there are opportunities, it is for the board and those who work at the airport to make sure that they exploit them.

I come back to Richard Lyle’s point. Of course members who visit Prestwick will be able to ask the board directly what it is doing. From my knowledge of what the board is doing, I know that a lot of work is done on providing incentive packages for new routes and new business from passengers, but the board is finding that difficult—there is no question about that. However, it is seeing substantial success with maintenance operations, with Chevron now on site and operating at capacity. Prestwick also takes flights that are diverted from elsewhere, which is very lucrative, and it is getting more business from aircraft fuelling.

It has always been the case that Prestwick does not have quite the same composition as Glasgow, Edinburgh or other airports in Scotland. It has other things that it can offer, and it has sought to increase—indeed, it has increased—the business that it has in those other areas. There is no question but that there is real pressure in relation to passenger traffic, but it would be best if individual members of the committee took the chance to meet the board to find out in more detail what it is doing to address that.

Prestwick is wholly owned by the Scottish Government, which is separate from the owners of other airports. There are landing fees. Can the likes of Prestwick undercut Glasgow and Edinburgh on landing fees to encourage more airlines to go there?

I think that you will find that all airports have discretion with landing fees, which they can use as part of a package to try to attract new routes. That is fairly common practice in the industry, but, again, that is a decision for the board; it goes with the ability to offer marketing support. Quite rightly, the Scottish Government has to be, if you like, agnostic with airports. If we were to be involved in a package that supported a new route coming to Scotland, we would have to be neutral when it came to which airport to support. You will have seen the work that we have done to get direct flights to China from Edinburgh and a number of other flights into Glasgow and Aberdeen. We do not just support Prestwick airport, but we can support it as well as other airports.

I would like to pursue the questioning on the information that you have given us this morning about the loans to Prestwick. You just told us that, up to now, the figure is £38 million and that there is another £8 million coming down the line, which takes us to more than £46 million. You have also told us that although the Scottish Government owns Prestwick, it operates at arm’s length and that the decisions that the board makes are commercial ones. I am a bit puzzled as to why the Scottish Government is ploughing another £8 million of taxpayers’ money into Prestwick airport. Obviously, if it is making commercial decisions, it should be able to raise money commercially. Is it the case that it cannot do that, or is this just a case of a taxpayers’ money pit? Will we be lending even more money?

We will be lending more money. I mentioned the potential additional loan funding for next year. Beyond that, any loans will be considered according to budgets. It is the case that, initially, Prestwick could not raise the money elsewhere. Infratil sold the airport to the Scottish Government for a pound, which I think tells you quite a bit about the financial situation that the airport was in.

When we make such loans, we make sure that they are for things such as the airport’s condition, which I mentioned. Those who went to the airport before it was bought by the Scottish Government and have been back since then will have seen the change in the infrastructure around the hotel, and especially at the front of the airport and in the main passenger area, which is also at the front. There was a huge backlog of work to be done on maintenance and improvement of the airport, and a lot of the money that has been drawn down has been for that purpose—for realising capital assets. It may well be that future loan funding helps to provide further facilities, including hangar space. There is, of course, the open question of a spaceport, with Prestwick in the running to win a spaceport licence.

Prestwick is a different kind of airport from other airports. We provide the funding, and it would have struggled to get funding from commercial sources, although the money that we loan is loaned on commercial terms.

It is of concern to me if Prestwick cannot raise the money commercially and has to come to the Scottish Government for it, and if the Government lends it to Prestwick on commercial terms. Can you give us an idea of when you think that the taxpayer will get that money back, if ever?

Our intention—we have said this from the start—is that the taxpayer will get the money back. I suppose that there are two ways in which that can happen. The first is that we turn things around such that income is coming in. We are getting the money back now because Prestwick is having to pay it back now. That is the basis of the loan: Prestwick has to repay it on commercial terms. If it can then get the business through that will allow it to pay the money back over the term of the loan, at that stage we will get it back—and far more besides, as we will get the continuing employment of hundreds of people at the airport and hundreds of others who rely on the airport for their livelihood. The second, of course, is for the airport to be purchased by somebody else. We would make sure that taxpayers’ interests were looked after in that eventuality as well.

The cabinet secretary said in his opening statement that things are heading in the right direction. However, since the Government took ownership of Prestwick airport, in the past four years passenger numbers, aircraft movements and freight volumes have fallen. The cabinet secretary says that more money might be made available if he is happy that a successful strategic plan is in place. Given the relative lack of success and progress so far, how confident are you that the current structures and strategies are heading in the right direction and will be able to turn the airport around? On the surface, that does not seem to be happening.

Jamie Greene rightly points to the fact that the trajectory when the Government bought the airport was that it was losing passenger traffic hand over fist, and it was losing routes and freight traffic. It was bound to have continued on that trajectory, but I think that we are seeing increases; I have mentioned increases in passenger and freight traffic.

The airport also has a much more business-focused approach. Infratil had interests other than Prestwick airport, but we now have a very focused approach there. We have satisfied ourselves on the strategic case that has been made by the airport, but of course individual members will get the chance—I think that Jamie Greene has maybe taken it already—to ask the board directly about its plans. We believe that Prestwick is worth investing in—that the benefits to Scotland are worth our investment at the level that I have mentioned.

I am aware that there are commercial opportunities for the airport to grow, specifically around private aviation, which is often reported to be one of the areas in which the airport could see growth. There is a problem, however, in that the airport does not allow private operators to run their businesses at the airport. Many of the companies that were there when state ownership was put in place in effect lost their businesses because of state-aid rules. Those companies want to come back to the airport to provide to customers competitive services—ground handling, for example. Lack of competition is inhibiting growth in aviation at the airport.

I appreciate that there is an arm’s-length situation, but I press the cabinet secretary to suggest to management team that it should be more flexible in respect of private companies coming to the airport and reinvesting in it—especially those that were there before public ownership.

No. I cannot do that. The case that Jamie Greene mentioned was a contractual decision that taken by the airport for reasons that it must satisfy itself were commercially sound. The issue was raised by others at the time, and I looked into it then. The airport was entitled to take that decision and was convinced that it was the best commercial decision.

I do not get any sense that the airport is turning away private sector business, including private jets; it is open to that. If you look at the investment by other companies—I have mentioned Chevron already—you will see that the airport is quite open.

If committee members have suggestions to make to the board and executives about further opportunities, I expect that they will make them. I cannot comment on individual contract cases, but I am satisfied that there is a very welcoming approach to the private sector, as there should be. Of course, the committee can satisfy itself about that further when it meets the board.

10:45  

I wonder whether this would be helpful. In connection with the question that we have just heard, can the cabinet secretary confirm that there remains at Prestwick a private flying base, that there is a light aircraft maintenance company there, that business aviation aircraft are welcome and that aviation gasoline 100LL and aviation turbine fuel JP-4 are available, which means that it is providing all the facilities that private aircraft might require at an airport.

I had forgotten about avtur JP-4. Yes—those things are all there. I think that I mentioned that those are lucrative activities for the airport, especially in terms of refuelling. If a plane is diverted for weather reasons from another airport to Prestwick, that is lucrative business for the airport. The airport is well aware of that. I heard a suggestion, before we took over, that it might want to brand itself as a resilience airport, for that very purpose. That would require capital investment.

The board does other things about the facilities at the airport that members can ask about when they meet the board directly, but it is probably best that they are not in the public domain. There is nothing in my mind that says that the company—the board—is turning away private business. In fact, exactly the reverse is the case: the airport is keen to welcome it.

I will ask about the Queensferry crossing. Can the cabinet secretary provide an update on progress in completing the minor works on the crossing, which were highlighted in Michelle Rennie’s letter to the committee in January?

Michelle Rennie is here. The snagging works that were mentioned in the letter, and which have been mentioned in previous committee meetings, are still in progress. Of course, key members of the consortium left on completion of the crossing, in terms of when it was opened. That, to some extent, marked the transfer of responsibility for the crossing from me to Humza Yousaf. It is now an operational road, so he is the responsible minister. I think that the snagging and other works must be completed by September. That work is in progress.

Thank you very much. I wonder—

Are you pushing on the actual snagging list and where it is? I get confused, cabinet secretary. On the transfer to Humza Yousaf from you, it is my understanding that until the snagging work is actually complete, it falls within your portfolio. That is Humza’s position on the matter. Is Michelle Rennie in a position to give us an update on the snagging? Kate—I am sorry. I do not mean to cut across your bows. It would be useful to hear where we are on the snagging items.

We provided the committee with a list of target dates that the contractor gave us, and I think that we said at that time that none of the dates is contractually binding, other than the September date. Snagging works are progressing and it is intended that they will be complete by September.

Your letter with the snagging list is dated 8 January 2018. Perhaps it would be helpful to the committee to have an updated list of where all the snagging issues that were referred to in that letter are. There are issues. On 7 May and 21 May, the bridge was back to one-lane travel again. One of those days was a bank holiday: reducing the bridge to one lane in both directions on a bank holiday seems odd to me. It would be useful to have an updated list for the committee. Sorry, Kate.

There has been talk of car drivers continuing to use the Forth road bridge, which is now a public and active travel facility, as I understand it. What are Transport Scotland, Amey and Police Scotland doing to ensure that is not the case?

That is the designation of the bridge: it was always the intention in legislation that it would be a public transport corridor. It is worth pointing out that the traffic that uses it, including buses, can legally travel on the new crossing as well, but the advantage to that traffic should be that there is far less traffic on the Forth road bridge. The reverse has happened—some car drivers have wrongly used the public transport corridor. We have reflected on how it is working, and the company that operates the bridge is in the process of enhancing signage to make sure that, when that happens, it is not because of confusion in the minds of drivers, so it is providing additional clarity and supporting compliance with the public transport corridor designation. That work is programmed for the end of this month and early next month.

Of course, the police can enforce the restrictions and will continue to monitor and patrol the Forth road bridge, when operational demands allow. They have taken a very considered and sensible approach thus far, but people will not be able to continue to use the excuse that they were unaware of restrictions on the bridge. We are going through a period of change and the additional signage will help.

Are there penalties for car drivers who use the wrong bridge?

Yes. If drivers are charged by the police, there are penalties.

There is a piece in The Herald today about contractor court cases—I do not know whether you have seen it yet. Is the Scottish Government aware of those cases and is it likely to be involved in any way?

We are aware of the cases, but they are disputes—which are not unusual, to be honest—between contracting partners, and are for the contracting partners to resolve between them. They will not have an impact on the budget for the bridge.

I will move to another subject—high speed rail. We understand that there have been discussions between Transport Scotland, the Government, Network Rail, High Speed Two Ltd and so on about how high-speed rail between Manchester and Leeds will impact on Scotland, and how we will move forward from that. Can you give us updates, or can you comment on that?

I can, to some extent. I had conversations with the Secretary of State for Transport; I think that the last time I did so directly was last year. I have made the point consistently to the UK Government that simply saying that there will be benefits from high-speed rail south of the border and that Scotland might benefit from that is not all that we are seeking.

We have made the case that high-speed rail will have to come to Scotland. Think of the east coast or the west coast main line: the west coast main line, in particular, on which £9 billion was spent just a few years ago to upgrade it, is now substantially at capacity. If there is high-speed rail to the Midlands but it is not improved beyond there, there will still be choke points. The only way we can see to resolve that—the work is being done jointly by the UK Government and us—is to introduce elements of high-speed rail north of the border.

A joint working group—the north of HS2 to Scotland working group—which comprises the partners that John Mason mentioned, has prioritised a shortlist of potential infrastructure enhancements on the east coast and west coast main lines that merit further study. We have commissioned a feasibility study of two of the better-performing options among those that were previously identified in work to improve train journey times, capacity, resilience and reliability on services between Scotland and England. The studies will focus on the east coast line south of Dunbar towards Newcastle and the west coast line between Glasgow and Carstairs.

Our arguments to the UK Government are underpinned by its own commitment. I think that it was Patrick McLoughlin who, as Secretary of State for Transport, spoke to his party conference and said that the party was committed to a three-hour journey time between Edinburgh and Glasgow and London. In our view, that cannot be achieved—this is not challenged—without some high-speed rail in Scotland, so we are using that as the basis for our discussions with the UK Government.

If I understand you correctly, there would be different stages, in that, if there are elements of high-speed rail in Scotland or at least north of Manchester and Leeds, the high-speed trains would be able to come all the way to Glasgow and Edinburgh but at varying speeds. One of the fears has been that they would actually be going more slowly through Cumbria and the south of Scotland, where there are a lot of bends and so on, than the present west coast trains, which are designed for that route. Is my understanding correct: that is the interim solution, but in the longer term we want full high-speed rail all the way to Scotland?

That is exactly right. We have said that. We can reasonably expect to hold the UK Government to its commitment to a three-hour journey time. It is possible to achieve that three-hour journey time with less than full high-speed rail all the way to Edinburgh and Glasgow, but our ambition is to have full high-speed rail all the way. It is not possible to achieve it without changes—John Mason mentioned gradients and bends in parts, especially in the south of Scotland and on the west coast main line. That is where stretches of high-speed rail would allow high-speed trains to run at full speed to meet that three-hour journey time. That is not necessarily the solution: there are a number of options with which I am happy to furnish the committee, so that you can see the working.

Something like that would be great.

On finance, would the UK Government pay for anything between Manchester to Carlisle and would the Scottish Government pay for improvements between Carlisle and Glasgow and Edinburgh?

The Scottish Government would pay for that under current arrangements and, from the discussions that we have had—they are not complete—it is likely that consequentials would flow from money spent south of the border. We would expect to use those consequentials and, perhaps, additional monies to pay for high-speed rail north of the border.

I have a little question that relates to a previous UK Government commitment—when I say “previous”, I mean quite a long time ago—on what is now HS1. It was promised that there would be international trains running from Glasgow and Edinburgh through the Channel tunnel; indeed, the rolling stock was purchased, but subsequently sold without any of the trains having run. Has that subject returned to the discussion between the Governments? Clearly, the attraction of being able to get on a train in Edinburgh or Glasgow, rather than flying, and decant in Paris, Brussels or Amsterdam, to where the new HS1 route has just started, would be attractive and highly supportive of tackling climate change.

As in many things, Stewart Stevenson’s memory is far longer than mine—although I recall that rolling stock being bought, commitments being made and then being ditched, pretty much overnight.

I would not say there has been a minister-to-minister discussion on the issue. I have raised with my officials the point that Stewart Stevenson mentioned, which is not just about the attractiveness of being able to get a train in Paris or Brussels to get to Edinburgh or Aberdeen, for example, but about being able do so on a sleeper train, perhaps, which would be very attractive for many people.

Stewart Stevenson might be aware—I have heard this through preliminary inquiries that I have made of officials—that that would involve some major work, especially at St Pancras in order to facilitate immigration and such things because, not least, of Brexit. However, that would be a tremendous thing, although we are not involved in direct discussions with the UK Government on that.

I want to focus on the route selection for the A96. The cabinet secretary, along with me and other members from the north-east, was at a meeting with the save Bennachie campaigners, so I know that he is well aware of the issue. The campaigners say that they are very concerned, as we approach the choice of the route, that desktop studies are being done and that site study work is done only after a route has been selected. They are concerned that that work is not sufficiently comprehensive to address all the issues properly. Is that the process that will be undergone? Is it just desktop studies that are being done, or is site study work being done on each of the routes so that the decision makers, including you, have all the information available to them?

Does your specific question relate to the Bennachie stretch?

Yes.

I think that there is much more work going on. As the member knows, apart from anything else we had that presentation from the action group. I had hoped to visit the site before now, but I had to call off my visit at the last minute. The visit is being rearranged in the diary so that I can see for myself the issues around the route. Ground investigation and other work is also going on.

On the process, perhaps it would be best for the committee to hear from Michelle Rennie rather than from me. However, having heard not just from the Bennachie campaigners, whom we met along with the member and others, I know that the representations I received beforehand wanted more information about that. The campaigners also raised the issue of whether a co-creative process could be put in place, and we are looking at that. We have one example of that being undertaken on the A9 project, and that would represent far more than a desktop study.

11:00  

A variety of work is being done across the A96 development. As the member will appreciate, as with all such schemes the programme is complex and is reliant on detail about what happens locally, whether that is about the topography, sites of special scientific interest, particular features, flooding, hydrological surveys or the geology—a variety of things is taken into the mix.

A desktop study might appear, on the face of it, to someone who is not familiar with that kind of work, not to be sufficiently detailed, but a phenomenal amount of information can be gleaned as a consequence of a desktop study. That is not to say that the people who are involved in that work are not familiar with the landscape that they are dealing with, or with the issues that that landscape involves.

In the development of all these projects, Transport Scotland and our technical advisers—as you can imagine, they are pretty experienced in this kind of work—take into account a variety of factors in arriving at a conclusion. The process that we follow across all our projects is outlined in the “Design Manual for Roads and Bridges”, so it is best practice, if you like, in the development of road schemes.

You are, quite rightly, taking a long time to decide on or to recommend to the minister the most appropriate route. As a layperson who is involved in this, I am surprised—the campaigners and those who want to protect the iconic Bennachie may find it surprising, too—that all the projects are being done by a desktop study.

You said that that is the standard practice, which you always undertake in developing a route. I find it surprising that, when you are making the final recommendation to the minister, teams have not been out on the routes.

The teams have been out on the routes.

What do you mean by the term “desktop study”?

That is what we call it. We produce reports on the basis of all the information that is available to us. Not only do we do that, but we have significant engagement with local communities. As you heard in the cabinet secretary’s opening remarks, that involves speaking to thousands of people right across the routes.

Perhaps the term “desktop study” is misleading because it suggests that something is happening in isolation—in a darkened room, almost—and that is not what is happening. There is a lot of engagement and a lot of knowledge is gained about the area, but some of that information is gleaned through reference to details that are already there.

Thank you—that is exactly what I wanted to hear. My point was that the term, as you just suggested, might give lay folk the wrong impression.

My final question on roads concerns the A9 and the A96. Are there any known issues that could lead to delays in either of those projects? I think that the cabinet secretary said, in his opening statement, that everything seems to be on track.

The biggest uncertainty is always the issue of public inquiries; if there are quite a number of those, that can start to extend the timelines. I mentioned in my opening statement that we engaged with more than 1,000 people in one case—in another case, it was more than 1,400—on the A96. Part of the benefit of that approach is that if the people who are consulted feel that they are happy with what is proposed, that obviates, in a way, the need for a public inquiry. Of course, that is part of the democratic process, which we always observe, but it helps if we can put enough information out there so that the process does not result in a public inquiry.

The biggest risk to public infrastructure projects is probably public inquiries. The public inquiry on the Beauly to Denny power line was the longest inquiry in Scottish history. It lasted over a year.

Based on our current projections, we do not expect the 2025 or 2030 opening dates to be affected.

In an answer to Jamie Greene, you mentioned electric vehicle charging points on the A9. Are they being considered as you progress with the dualling project or will that be a separate project?

I said that it was an electric avenue, which shows my age; that was the name of an old song by Eddy Grant. We were talking about the electric highway. Michelle Rennie can talk about the work that will be done on that, but the two projects are being considered together.

Incidentally, we are also trying to capture the active travel route along the A9, which has not been well maintained, to ensure that it is well maintained as part of the future contract.

That is right. The two things are being progressed in parallel.

Presumably, that will get people off the A9 and into some of the smaller villages that you mentioned down the highway.

Yes—depending on where the charging points are.

With the dualling works on the A9, have you noticed any increase in traffic on the A82?

I am afraid that I cannot give you that information at the moment, but I would be quite happy to supply you with something afterwards.

Thank you.

At a previous meeting, I raised with you the issue of the co-creative process. Indeed, I have written to you and been grateful for the positive response that I received. That has not necessarily been reflected in the approach of Transport Scotland officials, who seem considerably less enthusiastic about that level of public engagement.

In response to Mr Rumbles, you suggested that a co-creative process might be an option for the stretch of road that he asked about. A lot of people feel frustrated that, notwithstanding their engagement, the work will happen anyway. Should your officials be picking up more positively on that type of engagement?

To be fair, it was officials who proposed the process in the first place; the suggestion came from Transport Scotland. The instance in which it is being used is the first such instance, so we are trying to learn lessons from that. It is true to say that some things have taken longer to put in place than we expected, and we are quite keen not to undermine our target dates for the projects.

Furthermore, in the instance in which the co-creative process has already been used, around the Dunkeld area—this applies in some measure to nearly all of the A9—there are conflicts with railways; with the communities’ use of roads; with on and off-roads; and with the small villages and settlements next to the A9. We have a very complicated series of challenges, and that is why the project is well suited to a co-creative process. At the end of that process, there will be some tough decisions to take, but people will feel that they have had their say and have perhaps changed the decisions based on what has come out through the process. To some extent, we are feeling our way through the process, but it seems to me that the process is most appropriate in a situation where there are a number of large conflicts.

I am not sure that that is the case across the A96 in different areas. It may be, and I have said to Transport Scotland that it should maintain an open mind. However, it was Transport Scotland that came up with the idea in the first place. We have to keep an eye on how long the process takes and try to make it as quick as possible.

The question is not so much about whether you have a co-creative process. If we need to have one, we need to have one. It is more about the timing of the co-creative process and where such a process can best be used. As Mr Brown said, it is particularly useful in the scenario that we have on the A9 at the moment, although we have still to learn the lessons from that process. Where we are at a much earlier stage of project development, the advice that we are receiving is that such a process would probably not be as useful because we still have to go through the current process in order to arrive at a preferred route option.

It was not my intention to come in on this issue, but since the cabinet secretary offered that as an option to Mr Rumbles, I am just concerned that there is a potential for tokenism and that what we are saying is, “There’s the possibility of a more in-depth system of engagement, but we’ll decide when it is appropriate.” I appreciate the time imperatives, not least in respect of the contract but also on another issue that I have raised, which is about roundabouts versus grade-separated junctions and the overall journey time imperative. However, you either have meaningful engagement or you do not. Some months on from the Dunkeld experience, I would have thought that we would be in a better position to understand the benefits or perhaps otherwise of that system.

If we could have a longer conversation about why the process is taking longer than expected, including the appointment of consultants and some of the reasons behind that stretching out, that would give you a greater understanding. However, it is not a question of being either for engagement or not. Engagement is done in a number of ways. The public exhibitions that are held, which are very well attended, are open to anybody and many people get the information that they need in that way.

In the case of Dunkeld, there was a particular, complicated series of conflicts, if you like. That is why we found the co-creative process to be appropriate, and I think that it is not unreasonable to say that this is the first time we have done it, and we want to learn lessons from it. There is not a prejudice against doing it again, if we think that it is appropriate. If another level of engagement—say through public engagement, public exhibitions and discussions and community meetings—is not enough and is not the right way to proceed, of course we will keep that as an option. However, we should have the ability to learn the lessons from what we have done so far.

Peter, do you want to come in?

Yes, I have a fairly detailed question that may be in Michelle Rennie’s remit. It is about the A96. Is option Q still on the table, which is the one that goes via Meldrum and would obviously help the Aberdeen to Banff road as a consequence? Is that option still on the table, or has it been ruled out? I heard that it had been ruled out.

I cannot give you an update on precisely what options are still under consideration, but I am happy to write to the committee providing that detail.

We will leave that there.

Cabinet secretary, we have looked at existing projects and discussed some past projects. I would like to ask some questions about the strategic transport projects review. I understand from our papers that Transport Scotland issued a contract notice on 10 May. Are you able to set out the timescale for that exercise and say how Parliament will become involved?

That would be for Michelle Rennie to answer. It is in Humza Yousaf’s remit, and I think that the committee asked him about that as recently as last week. He will take that forward, not me. The major transport projects for which I am responsible are the ones that I was responsible for previously, and I will continue with those until they are completed, but transport is Humza Yousaf’s area.

We anticipate that the next strategic transport projects review will be available in 2020, and I think that a commitment has been made to complete it within this session of Parliament. We are still on track to make that happen. It will happen in parallel with the national transport strategy. There is significant consultation going on for both, and we are still on track with all that.

Forgive me, but I am a bit confused here. Is it the case that we will be in a position to question you on such issues only retrospectively and that you cannot comment on future major projects?

No. What I am saying is that I am responsible for a series of major projects—the Forth crossing, the A9, the A96, the M8 bundle and, previously, Prestwick airport. Transport generally is the remit of the Minister for Transport and Islands, and he will have the responsibility for the STPR going forward. That is the only point that I was making.

Sorry, but there is some confusion. I share John Finnie’s confusion over major transport projects. Do major transport projects still fall under you?

Only the ones that I have mentioned, I think, a number of times to the committee. Major projects other than those come under the remit of Humza Yousaf. I think that I offered to write to the committee—and I think that we did so—with that clarification, but I am happy to do so again.

It would be helpful if major transport projects are identified so that the committee knows who is responsible for them, because some of them may be passed to you. I think that that would be helpful to know.

John, do you want to come back on that?

I have a series of questions for the cabinet secretary, he will be devastated to know that.

Can I take this at a more political level? The Cabinet clearly has a number of priorities. There are climate change priorities and issues to do with low-carbon infrastructure, and the Government made a commitment to establish a just transition committee. We talked about electric vehicles and the A9. I am trying to understand how all the issues come together. I understand that the demarcation is in the portfolios but, for instance—I appreciate that this is not your portfolio—if we have a commitment to use diesel trains for 15 years, but ScotRail is, quite rightly, trying to future-proof upgrades of car parks for electric vehicles, and the Government has a commitment on that, we will have people plugging in electric vehicles at a station and then a diesel that has been rolled out elsewhere pulling up at that station. An awful lot of things have to come together. Although I accept that this might not have manifested itself into individual major projects that we can discuss with you in the future, can you discuss how that will be pulled together?

11:15  

Certainly. First, I should say that the STPR covers far more than major projects. There is a very large number of much more minor projects, and Humza Yousaf is taking that forward.

The member mentioned the just transition group. Because I have responsibility for trade unions, I am involved in discussions with the trade unions about just transition. In case other members are unaware, just transition is about making sure that the transition from very labour-intensive industries to much less labour-intensive industries because of automation is as fair and effective as possible for the people involved in it.

The discussions that we have, certainly in the Cabinet, about such things as the climate change targets and the environmental legislation that is being brought forward by Roseanna Cunningham will have benefited from discussion among all cabinet secretaries beforehand and will have covered things such as electric charging points. On a bigger scale, how many electric charging points we intend to have, what their prevalence should be and the electric highway idea are considered together at Cabinet. The responsibilities for them being taken forward are, in this case, with Fergus Ewing and Roseanna Cunningham.

The member asked about diesel trains. Of course, with the electrification of the Edinburgh to Glasgow line and the introduction of electric trains there, there will be a rollout of some of the diesel stock to other parts of the country. Sometimes, that will be more efficient diesel stock, and, of course, the ability to have only electric trains on the network requires us to electrify the entire network, which would take some time and some money, to put it mildly. However, it is our ambition to get as much of the network electrified as possible. In my area, for example, substantial progress has been made on the Stirling and Alloa and Dunblane lines, but it is also true in Shotts and in other parts of the country where we have had electrification.

I just want to get a handle on this, too. You are responsible for big on-going contracts such as the M8 bundle. Who decides the future big contracts such as a new bypass in Ayrshire or a new road to Stranraer? We have now completed the M8, the Queensferry crossing, the AWPR and the A9. What is the next big project that you can take care of and complete on time and on budget?

Who decides? The First Minister decides. Large-scale transport projects, with the exception of the ones that I have mentioned, which I have answered questions on previously for the committee a number of times, are the responsibility of Humza Yousaf, as the transport minister, and Fergus Ewing at Cabinet level. With the projects that I am responsible for, the First Minister saw that I had been involved with them for a number of years beforehand and wanted me to see them through to completion. You mentioned the M8 bundle. I am also responsible for the projects on the A9, the A96, the Queensferry crossing and Prestwick airport, which I have been involved in previously. New projects and the contracts that go along with them—

Send them to someone else.

That is right.

Thanks for touching on that point. All the major roads projects that we have discussed today are in the north of Scotland, and that is fantastic news for that part of Scotland. However, you can travel south from Inverness on trunk roads for 200 miles and not have to drive through a village or a town until you hit Ayrshire or Dumfries and Galloway; if you are travelling to the busiest ferry port in Scotland, at Cairnryan, you will have to travel through village after village at 30mph. You know from your role as economy secretary the massive impact that that has on the economy of the south of Scotland, which is the lowest-paid part of the country. As economy secretary, at what point do you get involved to make sure that the economic case for the A77 or A75 is taken into account when it comes to determining future strategic roads, given the lack of investment in those roads over many years?

Well, I refute that. I think that you are right to say—as Patrick McLoughlin once did—that the problem with transport infrastructure in Scotland is that it has not had investment for decades. He was speaking three or four years ago but as somebody who had been a transport minister back in 1989. It is right to say that there is a legacy of underinvestment. If we think about the litany of different projects for which we have been responsible, including, for example, the Borders railway—the biggest piece of rail infrastructure or rail line built in the UK for over 100 years—the Maybole bypass plans, the Dalry bypass and the work that has been carried out at Dunragit, I do not think that it is true to say that the south of Scotland has not featured. Future projects will be taken forward by the transport minister.

Of course, there is a much wider discussion to be had about economic impact. The south of Scotland enterprise partnership and what will become the south of Scotland agency will be involved in that. As Cabinet members, we have met in the south of Scotland, we have heard representations and we are all party to those decisions. Transport projects will be taken forward in the transport portfolio by Humza Yousaf and Fergus Ewing.

We have also recently commenced the west of Scotland transport study and the output from that will be included in STPR2.

I want clarification on why that review is happening. Is it something that would have been happening anyway as part of your governmental term or has something prompted it?

We undertook a review in 2008—STPR1—and it recommended 29 strategic transport interventions at that time. Those interventions have largely been delivered or are in the process of being delivered. Because of that, and because, I suppose, the world has moved on, this seems like the right time to look at our future national transport strategy and, on the back of that, identify what the strategic transport projects ought to be. That will be considered across a multimodal function including buses, active travel and ferries. It will consider everything right across the range.

Again, just on a point of clarification, am I right in saying that, when you go on to dual the rest of the A9 up to Scrabster, it will be Mr Yousaf and Mr Ewing that we will have to interact with for that?

I think that I will let them answer that question, convener. Of course, you will know about the work that we intend to do at the Berriedale Braes.

I do, indeed.

I get it that your responsibility is at the most strategic level, but how do you address the understandable concerns that there are the length and breadth of the country that, although the major infrastructure is being enhanced, all around it the other infrastructure—which I accept you will tell me is the responsibility of local authorities—is not being maintained, repaired or replaced? Surely there comes a tipping point where all the benefits of having—if you would view them as benefits—dualled roads are going to be lost, if everything off those roads is substandard.

I will meet your expectations and say that, of course, it is not just a political division of responsibility but a legal one. Local authorities are the roads authorities. When I was a local authority leader, if the Government had come in and said, “We are going to do this to this road,” I would probably have said, “Yes, thanks for the money, but we will take control of that because we are the responsible roads authority.” Sometimes there are distinctions. One of the proposals in the Ayrshire growth deal is for us to be involved in a road that is not ours. Another example that you may be familiar with is the Longman roundabout, where, although part of the project is not in the Scottish Government’s remit, we are working with the local authority.

When I was the transport minister, I made an open invitation to local authorities in whose areas there was, say, a dual carriageway or other major road butting on to local roads, as they will inevitably do, to come forward to the Scottish Government if they wanted to work jointly with us in those areas as well. That was some time ago, and it is obviously some time since I have been transport minister, so I do not know the extent to which that has progressed, but that offer of joint working is there for local authorities to take up. It is encouraging that, in some areas, there is a willingness among local authorities—I am thinking again of the Ayrshires—to work together across boundaries to more effectively look after the roads. Ninety-six per cent of the roads in Scotland are local authority roads, and about 4 per cent are Scottish Government-controlled roads.

In our committee papers we have a very helpful table showing snagging works in the Queensferry crossing. It details the items of on-going or planned work, and it has a target date, which I appreciate is perhaps an estimated date. I put in a freedom of information request for the same piece of information for the M8/M73/M74. I was helpfully given half the table and a list of works, but my request for target dates was met with the response that the Scottish Government did not have the information I requested and therefore my FOI request was refused. Could you explain why you have it for the Queensferry crossing but not for that other infrastructure project, and would you consider producing a list of target dates for the snagging works on that piece of road?

I think that it is best if I let Michelle Rennie answer that.

To put it most simply, the two projects are let on quite different forms of contract, and there are different requirements in each form of contract. We can give you only the information that we hold. The contractor on the M8 has told us that it intends to complete any outstanding works this summer, but it has not given us a detailed breakdown of how it intends to complete those works.

I am going to relent—I may regret it, although I hope not—and allow a short question from Stewart Stevenson.

It is short. I just wondered whether, in project management terms, it would be normal for the Government to have access to the work breakdown structure that is an integral and very detailed part of the project management system.

We tend to have access to what you would call the strategic programme on these major projects. Where there are fairly minor works, it is less likely for us to have that information and, actually, the contractor needs the flexibility to be able to move its resources around the site as weather conditions and resource allow.

I go back to the previous discussion that we had at the committee about the nature of contracts and the extent to which we would want them to be prescriptive. You can be endlessly prescriptive, and you can also work to absolutely minimise risk, but if so you will see the cost of projects rise and perhaps the willingness of contractors to bid for them reduce. We have to strike a balance. We are always willing to look at how we do that, but we have to give contractors discretion, and we have found that the balance we have just now of giving them that discretion is very important. The Queensferry crossing was funded in a very different way, of course, with direct Government funding. Finally, I just want to say that we cannot release information that we do not have, obviously.

That neatly leads on to the question that I have about your experience of major contracts, which you mentioned today. A lot of these contracts are overseen by partnerships or joint ventures, which then rely on subcontractors, which are in many cases SMEs. Do you feel that those businesses are getting a good deal and are benefiting from the Government’s business pledge in 2015 to make sure that their invoices are promptly paid, or do you think that they are not getting a good deal?

The Government has a very good record of paying promptly where we have the responsibility to do so. Sometimes, of course, that is done by local authorities. I am aware of a couple of instances where payment has been three or four days late. That has happened, but I think, generally, that we have a very good track record of making prompt payment, and project bank accounts are being investigated as a means to further improve that. There is also a lot of discussion about blockchain technology and whether it can be used to make it more efficient and effective. I think that we have a good track record on that. Where it is down to individual companies to sign up to the business pledge, they have to look to their payment terms, which are part of the business pledge, as you mentioned.

11:30  

Beyond that—on your broader question about whether SMEs are getting a fair crack of the whip—we have been conscious that, going back many years, some of the contracts that have been let by the Scottish Executive or the Scottish Government are of such a scale that the financial and legal expertise that is required is beyond the ability of certain small construction companies to take on. We are very keen to see whether there is any more that we can do to make sure that they do not feel precluded from doing that. As I mentioned before with the AWPR, if it is the case that even previously big players such as Carillion or Balfour Beatty or Galliford Try do not want to go forward on their own, it is very unlikely that SMEs will attempt that. I think that that is one thing that argues for the 12 phases of the A9, rather than one huge project.

We are trying to do these things by framework agreements. I talked previously about this after the Carillion situation, much of which we do not control, as it is down to company law, pension regulation and so on. I have asked Transport Scotland to have a further look at what we can do not just to maximise the involvement of SMEs—I think that we have got very good involvement of SMEs—but to address the power relationship between the subcontractor and the main contractor, which is of particular interest. Within that, there are particular issues such as retentions, which are always being discussed. We are looking to do more, but I think that the figure of 78 per cent that was mentioned is indicative of the efforts that have been made so far, although I am sure that there is more that we can do.

I understand that SMEs cannot necessarily compete with joint ventures that are put together, but they often work for the joint ventures that are awarded the contract and, whereas the Government will pay the joint venture, I suspect that SMEs sometimes have to wait a long time, well outside the terms of the business pledge that the Government has signed up to. Are you comfortable with that, or is there more work that you could do on that?

Transport Scotland has included project bank accounts in all our major projects, so that goes some way towards reducing the amount of time that it takes for SMEs to get paid once the initial payment is made by the Government.

On the A9, we have also looked at what work we can award directly to SMEs and, with that in mind, we have procured a framework contract for smaller works: for accesses, demolition, utility works and some preparatory works. That has a variety of benefits. It helps us to de-risk the main contracts, particularly where those are seasonal works and are affected by things such as the bird nesting season, and it gives direct payment to SMEs without there being anyone between Scottish Government payment and the SME directly receiving it.

We will continue to look at where we can intervene in that way for all our major contracts, and we also regularly ask our main contractors to give us details of any issues that are arising with SMEs. More widely, we see a variety of subcontractors working across all our major projects. Therefore, although I appreciate that some SMEs have difficulties, one can only presume that others are benefiting as a result of these major projects because of their repeated involvement.

Cabinet secretary, I am going to push you. Are you happy that the Government is doing enough to help SMEs when they are subcontracting to joint ventures?

I have said a couple of times, not least since the collapse of Carillion, that I have asked Transport Scotland to look at what more we can do and will continue to do that. It is never the case that we are satisfied with all that is being done. We have to continually look at that. In any event, the situation changes. The collapse of Carillion has changed the situation. We always have to look at what more we can do.

My final question is on joint ventures. Sometimes the assets of the joint ventures that are set up to run these contracts are less than the money that they are being paid, so if the joint venture folds, there are insufficient funds to pay the SMEs. Do you feel that you have that in hand and that it is not an issue that can happen?

Since we have been alerted to the Carillion situation, we have altered our financial checks on companies so that we are doing them much more frequently to ensure that that situation does not arise.

I guess that the proof of the pudding will be in the eating as the projects are delivered.

Thank you very much for coming to the committee today.

11:35 Meeting suspended.  

11:39 On resuming—