Official Report 231KB pdf
Good afternoon. I welcome everyone to the third meeting this year of the Transport, Infrastructure and Climate Change Committee. We have no apologies to record for today's meeting. As usual, I remind all present that mobile devices of any kind should be switched off.
Thank you for this opportunity. When I previously gave evidence to the committee on 23 June last year, I was able to give an informal summary of the scheme prior to the bill's introduction, which took place on 16 November. In addition to introducing the bill, we have made progress on securing procurement of the project, although completion of that will be subject to parliamentary authority. It should be noted that the project is to be delivered in three contracts. The bidding process has been started for the first of those contracts, for the new crossing and for the connecting roads, with invitations issued to two consortia, each comprising four major international contractors. The other construction contracts will be procured later this summer.
It would be useful to hear whether there has been any change in the project milestones since our previous update in June. Is the timescale that was previously envisaged still the timescale to which people are working?
Yes. We published the bill on 16 November and started the procurement process for the principal contract on 4 December. Those dates are pretty much within a week of the timetable to which we have been working, so we are on target for delivering the project.
Assuming that the Parliament approves the proposals, are you still confident that 2016 will be the delivery date?
Yes, I am.
The Government is still giving a budget range of £1.7 billion to £2.3 billion. Are you confident that the project is on budget and that it will be delivered within that range?
Yes. I recall that there was a considerable discussion about costings the last time I appeared before the committee. I hope that the financial memorandum provides a lot of clarification. It says that we expect the work to cost around £1.345 billion at 2006 prices. We expect that the cost of the scheme that is the subject of the bill will most likely come out at £2.044 billion at outturn prices. On the uncertainties and particularly the inflation range, we are still working within a price range of £1.7 billion to £2.3 billion, which the minister announced on 10 December 2008.
How do you respond to the popular expectation that, in general, the figures for any large construction project will look much bigger by the end of the process than they look at the stage that the project we are discussing is at?
The critical time to reassess is when we get in the actual prices from contractors. That is what we are working to, and those prices will be submitted in December. Up to that point, we are simply looking at our expectation of the prices that the contractor will submit. Having said that, the form of contract that we are using has a very good history of delivering to the price that we receive for the tender. The normal range of pricing overrun for Transport Scotland road projects is around 3 per cent of the tender sum. That has been factored into the optimism bias.
Do you want to say anything about the current economic circumstances and whether they are impacting on the expectation of changed prices for such projects? It appears that we are now at the beginning of what might be a slow recovery, which will obviously impact on the prices for major projects. Is there anything that we should anticipate, based on how the economic recovery might progress, that will impact on the price of the project?
Our delivery partners and their experts, who have an audit role in relation to costs, have given considerable thought to the inflation range. I will make a personal observation. Civil engineering prices were fairly stable through the 1990s. In the first part of the past decade, there was a rapid increase in prices, but we are now going back to a stablish situation. We are looking at a very long cycle within which civil engineering prices have moved. I am fairly confident that, for the period for which we are tendering the job, our experts have made comprehensive allowances.
Okay. Perhaps other members will explore related issues in their questions.
The consultation process as a whole needs to be considered. It must be recognised that we are running a consultation strategy that looks at engineering, design and the environmental impact analysis, and are consulting landowners, communities, interested parties and the general public. There are four aspects to the consultation; last time, it tended to focus on the latter.
Can you identify any key concerns highlighted by residents and other interested parties since June 2009 and explain how you have addressed them?
The principal one was the issue of the construction compounds. The project will require three construction compounds for the works, which we are seeking to secure and provide to the contractors. One is at the north end of the scheme, adjacent to Ferrytoll roundabout. One is at the south end of the scheme, adjacent to junction 1A on the M9. The other is to be positioned in the vicinity of South Queensferry—it is to be the principal site for engineering works. There will of course be supplementary sites. For example, if the contractor decides that he wishes to undertake the erection and assembly of the bridge components locally, he will need to find accommodation for that. We have not covered that.
I will ask about the site compound, which you mentioned. What is your position on the site that you proposed initially? Is it still in the bill or has it been categorically ruled out?
If we are given consent to procure the land that is required for our favoured site, we will not consider the original site for construction purposes again. However, if Parliament decided that it did not wish us to have powers to purchase the land, the proposal would come under the heading of deemed planning consent.
People are concerned that the ability to use that land still appears to be on the table and in the bill.
The proposal was included in the environmental statement, but that statement is duty bound to include in its scope ideas that we considered and ruled out.
The use of Society Road has raised great concerns. The communities have not yet been told how long the road will be used for access to any site compound and the estimates vary quite dramatically. Can further work be done to give people clarification on the use of that narrow road in the village?
Society Road will be used for the duration of the construction of the marine works, but only the section that adjoins the barracks will be used—that is the only part of the road that we will use during the construction sequence.
We are talking about Society Road being used for a few months for the haul road.
A few months—a number of months, yes.
It is increasing quite a bit—it could be quite a few months more.
I am sorry—I will explain. The works that have to be done are the early mobilisation works, which are to do with adjusting drains, breaking through certain areas and minor earth works. Such work takes no more than a few months but, because of its nature, things sometimes arise. The intention is not for it to go on for longer than a few months.
I have one last question on that. It might still be useful to allow the communities to sit down with Transport Scotland to discuss the transport modelling that has been done so that they can get an idea of how the figures have been developed for the different roads that you will use, which will be used differently after the bridge has been built. I know that the figures are available, but it is sometimes useful to drill down behind them so that people get an understanding of where they came from. Would that be a good sign of openness, in the spirit of the consultation with the community that you are now taking on?
Because of the refinements that we have made to the scheme and the progressive way that we made them, the information on traffic has come relatively late in the process, which we recognise. It first became available round about the late summer. As a result of that, at any time that we have gone to communities, we have made a point of demonstrating to them the flows that arise out of that information.
Perhaps I can save Mr Duff some of the bother. I suggest that, considering that it will have a large impact on the community, it would be useful if some way was found of explaining the information to lay persons, whether they are MSPs who are involved in the committees or members of the affected community. There must surely be a way of explaining it to people such as me and to the community—perhaps not today—in a way that allows them to ask questions about it.
The major concern rests in the South Queensferry area. I do not think that there is the same concern north of the estuary. Therefore, I undertake to approach the Queensferry and District community council and find out whether we can use its good offices to put something on.
I hope that you will approach other community groups as well.
I have a request for a supplementary question from Margaret Smith, whom I should have welcomed to the committee at the beginning of the meeting. I do that now for the record.
I am here as the constituency member for Edinburgh West, which includes South Queensferry, Kirkliston and the surrounding areas. By the witnesses' admission, that is the area in which local residents are likely to face the most disruption as a result of the scheme.
Before the witnesses answer, I remind everyone that although there are perfectly legitimate questions about the practical aspects of the project, the purpose of today's session is not to undermine the Forth Crossing Bill Committee's work in scrutinising the bill itself, as responsibility for such scrutiny properly lies with that committee rather than this one.
I will relay my understanding of the matter; if I get it wrong, Frazer Henderson will correct me very quickly.
Noise is a good example. John Howison mentioned that any regime would be operated by three local authorities, each of which could have different policies, meaning that a consistent approach might not be taken. That could confound the delivery of the project—and certainly its delivery within the set timescale.
That seems to cover a situation in which a contractor or subcontractor thinks they might breach the code of construction practice. The code has a lot of caveats: it does not say, "You will not do this," but, "You won't do this, but in certain circumstances you might be allowed to." What happens if the residents who are affected—as the people who live close to the haul road down on to Society Road will be for many years—consistently find that there is more noise than they were led to believe there would be, or that there are problems?
There are a number of aspects that one must take into account. The first is the interesting aspect that the code of construction practice sits underneath the environmental statement, which contains additional noise constraints. The code of construction practice is effectively a larger envelope within which there are other restrictions. At the Clufflats, for example, lower levels of noise constraint are offered.
Do you want an honest answer?
Actually, yes.
I would like you to pick up on the small question that I asked at the beginning. Is the way in which local authority powers have been dealt with in this instance typical of other transport infrastructure projects?
All projects are different. As you know, I was involved for 12 years with the Channel tunnel rail link. We exercised the sort of level of controls that I have spoken about today.
By inference, your previous involvement was not in Scotland.
No—I am sorry. My reference is down south.
We can perhaps explore those points with the Scottish Government, if it is able to provide further information.
Thank you for your indulgence, convener.
I want to explore further the matter of community engagement. Mr Glover spoke about monitoring this lengthy, five-year construction project. What plans have been drawn up to engage with and be accessible to local communities over the lifetime of the project?
We recognise that there should be some on-site facilities for that purpose, and we have been considering creating an education and training centre with a drop-in facility for local residents, so that somebody from Transport Scotland would be on hand, should something happen.
From previous experience, we know that it is vital to advise the community of things before they happen. Therefore, the role of the community liaison officer is important. Community liaison officers will be resident on site and will be the focal point for the community, and regular newsletters will be sent round the community.
In his introduction, Mr Howison talked about an education and training centre. That all sounds very one way. Good communication and engagement work both ways. What is in place to listen to the community and to react to any concerns that arise as the project develops?
I am glad that you asked that question. A key performance indicator will be attached to the response to communities' questions and queries. Those will have to be closed out within a certain period, depending on the severity of the concern. The KPI will be in the public domain and there will be some checks and balances. That is about outreach. It is not reactive; it has to be proactive, and the community is very much part of it.
What progress have you made on acquiring the land required for the project through voluntary agreements? To what extent will you need to exercise the powers of compulsory purchase that are contained in the bill?
We have not entered into any voluntary agreements on the taking of land. The book of reference and documentation associated with the bill set out the land that we wish to take compulsorily. Over the past year we have been in discussion with landowners about the taking of their land and what that might mean for them in terms of severance and the remainder of their land. At the moment, our presumption is that, subject to parliamentary approval of the bill, we will put forward a general vesting declaration in the spring of next year to acquire the land compulsorily. The advantage of taking land compulsorily over a voluntary process is that you get what is known as a clean title to the land, which means that any servitudes or encumbrances on the land disappear. If the land were acquired on a voluntary basis, such issues would have to be negotiated individually, which could be time consuming, frustrating—in terms of the delivery—and, potentially, costly. At the moment, our policy is that we will take all of the land required for delivery of the scheme on a compulsory basis.
Can I be assured that you have entered into dialogue with and contacted everyone who will be affected by that?
The book of reference details the land ownership that we are aware of. You will appreciate that there are pockets of land for which we have been unable to identify title. Those in the book of reference for whom we have title we have contacted. Where we have no title, we have put up notices on the land asking people to come forward. Rigorous checks have been undertaken in the register of sasines, with Companies House and so on to ensure that we have as great a coverage of ownership as possible.
You described compulsory purchase as an advantageous process, the advantage being, as many people will understand it, on the Government's, or Transport Scotland's, side. Is it not reasonable to recognise that the Scottish Government represents the interests of individuals? The Scottish Government is their Government, so should it not balance the interests of both sides instead of simply seeking the most convenient route?
Compulsory purchase is indeed a convenient way to acquire land. The fundamental issue is the requirement of the land in the first place. We have sought to draw the limits of deviation for the scheme tightly so that, in effect, we are taking only the land that is required to deliver the scheme and to provide some working room for the contractor. We have taken cognisance of the impact on landowners by reducing our land take. We looked very closely, and continue to do so, at whether we could mitigate the impact for a landowner by reducing the land take even further.
There is an element of benefit to the landowner. Under compulsory purchase provisions, once the land is taken, the owner is entitled to an advance payment of 90 per cent of the assessed compensation right up front. The two alternatives are that the landowner does not give access to the land until the deal is finally done, which could mean that we did not get it within the project's timescale, or that the landowner agrees to give early entry to the land and then has to argue about the level of compensation with the valuation office. The compulsory purchase scheme provides some security and cash up front for the landowner. It is a mutually beneficial arrangement.
If a particular landowner saw it as being in their interest, would there be any harm in offering them the opportunity to enter into a voluntary process of negotiation if they so chose?
On a few occasions we have gone through a process of voluntary acquisition in parallel with compulsory purchase. One such situation was the M74 completion. The amount of professional time taken up in pursuing legal completion of voluntary acquisitions is very onerous on landowners and on us. We would not normally go down that route, and we will not use it in this case.
Thank you. That answer was clear.
Given that the budget costings for the project have been widely known for some time and that only two consortia will bid to construct the Forth crossing, what are you doing to ensure competitive bids and best value for the public purse?
Two consortia seek to win this particular prize so there will be serious competition between them. One of the issues is whether we keep both consortia right up to the point at which they submit tenders. We have recognised that issue and have approached it in two ways. One is through the agreement of Parliament to a contingent liability, so that if something untoward and unexpected should happen that results in the competition not proceeding, we will pay the consortia a certain level of compensation. The second is that, on award of the contract, the runner-up will receive a different sum of money as a non-success premium. Therefore, there is an incentive for the contractors to carry on with the process competitively in the knowledge that the costs that will accrue to them during the process—and it will be an expensive process—are, to some degree, shared.
What will be the scale of the non-success premium, and has it been used before in projects, or are you going to use it because there are only two bidders?
I will answer the second part of your question first. The tender support regime was designed before we knew that there would be only two bidders, but it was done in the expectation that such a large contract would draw in consortia, so it would be likely that we would be soaking up a large proportion of the world's top contractors. However, we never believed that we would get more than three bidders, even in the best circumstances, and, as it happens, there are only two.
A number of correspondents with varying levels of understanding of and expertise in this matter have expressed concerns about the eventual cost of the project. How confident are you that you will not end up with two bids that deviate significantly from the expected cost when compared with other similar projects that have been completed in recent years in other parts of the world?
I cannot add to what I said before about confidence in the price. The prices have been estimated by competent, world-class consultants and have been examined by quantity surveyors who are experienced in this type of project. The people who are involved in the estimating have built this type of bridge before—they built Øresund bridge and Stonecutters bridge—and are fully aware of the work that is involved. Therefore, I am relatively confident about the range of prices that we have put forward within a stable financial macroeconomic climate.
I want to follow up the issue of the non-success premium. This is a difficult time in the public sector, as Governments—not just the Scottish Government—talk about cuts in the coming years. Surely, there must have been some concern about how the payment might be perceived. At a basic level, a lot of households are probably familiar with the practice of paying a small amount of money for a quote when someone is going to do something to their property, so the basic principle might not be outrageous. However, given the scale of the payment to the unsuccessful bidder and the possible perceptions of that, did you not consider a different approach to your presentation of it?
Yes, of course. The starting point is that estimates do not come free and firms must consider the amount of money that they are going to spend on estimates before deciding whether they can undertake an estimating process. If they agree to enter an estimating process and they are given no support, they must include within their tender for undertaking the work a sum of money that will allow them to recover the expenditure from the unsuccessful bids in which they have been involved. In other words, over the cycle of their business activities, they must, in one way or another, meet the cost of the tenders in which they are involved.
So, the sum was determined through a process of asking how much the contractors wanted. However, even accepting the argument that the effect is cost neutral, there is the question of perception and presentation. Did you not think about calling the payment something different? "Non-success premium" sounds like a bad joke, does it not?
Forgive me, I have a history of having inadvertently unfortunate names for things, but I will leave that aside. The important feature is that there will not be complete reimbursement of costs, because it is important that bidders price to win the contract rather than simply a consolation prize. It is a bit late to consider whether another name would have been better; that is simply the name that I bring to the committee today.
How about "failure premium"? Failure is another word for non-success.
It is not a failure premium, because bidders' presence at the final tender will mean that we still have a competition and competitive attitudes to putting in prices. If that were not the case and the bidder withdrew prior to putting the bid in, we would be looking at a failure.
The design for the main structure of the new crossing has three towers, rather than the more usual two. Why is that? What impact will that have on the budget?
It is to do with structural mechanics and where we can place foundations. I looked at early civil engineering journals that go back a long way—pre-Forth road bridge—and it was interesting to learn that the route that we are taking is the route that people wanted to take, but it was beyond the technology of the day to do so, because the spans were much too large. As you know, the existing bridge has a very long span anyway.
Yes. That is a comprehensive answer, the second part of which anticipated my next question to a substantial degree.
I would not say that cable-stayed technology is common or garden technology, but it is the normal technology that is used for a bridge of this type. We have just finished Stonecutters bridge in Hong Kong; it has just two towers, but its span is much longer than the spans of the proposed bridge—it has a span of 1,000m rather than two 650m spans. There is nothing particularly unique about cable-stayed bridges. The characteristic of the proposed bridge that makes it slightly different from most other bridges is that it will have three, rather than two, towers, which has been referred to. We simply deal with that through the structural mechanics—it is not a huge risk item that is added into the mix. I would not like to use words such as "unique" about the technology; rather, I would like that word to be applied to the bridge's iconic nature.
You mentioned a bridge in Hong Kong, which seems to be a kind of comparator. How much did it cost?
The problem with cost is that it is shrouded in all sorts of numbers.
Indeed. How true.
The only way to answer the question that has been posed is by stripping away some of the numbers. All I can say is that the designers of the new bridge are the designers of the Stonecutters bridge, and they are now designing the Macau bridge, which will be the longest-span bridge in the world. The designers are the same, the technology that they are employing is the same, and the people who have arrived at the design estimates and so on are, by and large, the same. Therefore, the numbers that we produce must be relevant and must be given credence.
It remains to be seen whether saying "Trust me: I'm a structural engineer" goes down better with the public than saying "Trust me: I'm a politician."
I am not the best person to talk about the cost ratios between China and here or to speak about different accounting practices in different countries. A comparison between Stonecutters bridge and the Forth crossing is inappropriate, as costs must be seen in their geographic and environmental contexts, and there are differences. However, the numbers that I have given are comparable.
I would like to provide some clarity. Mike Glover gave the price of the bridge, which is £500-odd million. That is not to say that that represents a quarter of £1.7 billion to £2.3 billion. To that price need to be added risk allowance, optimism bias, VAT, inflation and the cost of capital, for example. If we say that the whole project is the road works, those various other items and the bridge, what element is the bridge? The bridge represents about 70 per cent of the total cost. Mike Glover was saying what the basic cost would be if the bridge were built now, no VAT were paid on it and the optimism bias and risk elements came out favourably. That is the comparison with the bridges that have been built.
Do you have figures for how much building a two-tower cable-stayed bridge would cost, even if that required the use of thicker cables and was less aesthetically pleasing?
We have not designed a two-tower cable-stayed bridge, which would be more expensive.
Such a bridge would be beyond the bounds of what is being built in the world—it would go beyond the technology that we could reasonably apply and would involve taking enormous risks for a cable-stayed bridge. Such a design would involve missing out Beamer rock. The span would be more than 1.3km—people would gulp.
The cost of a bridge comprises the cost of foundations, the tower and the decks. Moving from three towers to two saves to an extent on foundations and the number of towers, but the deck becomes much more expensive. The whole exercise is to optimise the bridge's overall cost. We are relatively confident that if the bridge configuration were different, the bridge would be more expensive.
The policy memorandum says that
The policy memorandum is clear about the issue—the way in which you related the figure shows that. As part of the tender process, we are asking contractors to give us their response on carbon. When we have that information, we will have a better figure with which to respond to your question.
Is a process being completed to ensure that that figure is kept as low as possible? I accept that, until you have the tenders from the contractors, you will not know their best estimates, but will you then try to ensure that the embodied carbon level is kept as low as possible rather than just pick a figure?
The competition will be decided on two elements—one is price and the other is quality. On quality, we are considering how the contractor approaches risk, wider social benefits, the organisation of management and how much carbon the product will generate. We recognise that the project will cost so much in pounds, shillings and pence and so much in tonnes of carbon and we will assess both costs in the final award assessment.
The policy memorandum also says that, in 2032, the additional carbon emissions that will be due to the Forth crossing might be 20,317 tonnes. Why did you pick 2032? That does not relate to the Climate Change (Scotland) Act 2009 or anything else on the general climate change agenda.
I will definitely ask Alan Duff to explain the choice.
The answer is simply that 2032 is the year for which the traffic model predicts traffic flows. It is 15 years after the bridge opens and we have traffic figures for that year, which we can feed into the carbon calculation.
Given that, do we have figures for each year?
We have figures for 2017 and 2032.
So, we just extrapolate from the figures for those years.
That is correct.
The figures that were quoted in the policy memorandum were produced by a conventional traffic model. However, we are concerned about the way in which that replicates real traffic conditions, as the crossing operates under stop-go rather than free-flow conditions, so we have undertaken further estimates using a microsimulation model called Paramics. As a result of that, and taking into account the amount of carbon that cable replacement would generate, our current view is that the new bridge will be carbon neutral, in comparison to a cable replacement operation, up to the year 2025 or thereabouts.
It would be useful if you could provide in writing to the committee the calculations that lead to the conclusion that the new bridge will be carbon neutral. It is perhaps a bit too complex to go into here, but it would be good to have the figures on that at some point.
Yes.
Has there been any calculation of what would happen to traffic flows and the resulting emissions if that very brave assumption did not hold until 2032?
No.
There is no intention to do that?
No.
The figure of 20,317 tonnes—which we acknowledge is an estimate at this point—is an annual figure, so the cumulative figure for emissions by 2032 would be around a third of a million tonnes.
Yes.
As has been mentioned, the crossing is a very long-term project. What is being done to minimise the disruption to the existing—and very busy—commuter routes at various stages of the project?
The project will involve several areas of extreme sensitivity. The most difficult part of the construction will take place around the Ferrytoll junction, north of the Forth, where the new bridge joins in. We need also to weave in fresh ramps onto the public transport facility of the existing bridge. It is fairly complicated—I invite Mike Glover to explain how that will be done.
Do you want me to explain how the Ferrytoll junction operates?
Yes.
You have a go, and then I will answer.
The first point is to recognise the community routes that exist, such as the route from Dunfermline—Castlandhill Road—and the route up from North Queensferry. The design has been altered since it was first put forward in January 2009 in order to pull those routes out of the general conglomeration of traffic going through the Ferrytoll junction. That will allow much of the construction work to go on without impacting on those local roads.
The drawings would be helpful.
Members have a copy of the scheme map in front of them—you might refer to that.
I am afraid that that map is at a different level of complexity. You will appreciate the fact that bits of road will be moved around, backwards and forwards, in five different phases to accomplish the project.
If you can provide that information subsequent to the meeting, that will be helpful.
It is a question of the level of detail. I was not sure what you wanted. As John Howison says, the best thing would be to look at a series of phased plans. Looking at the plan will just show you what the plan is; it will not show you how we will get there.
Given the recent tragic loss of life on both the Forth and Tay rail bridges, can you explain what you will do to ensure the safety of those who will be working on building the Forth crossing?
A fairly elaborate safety hierarchy has been established in the UK under legislation. We have certain responsibilities to ensure that we employ competent and experienced contractors and designers. Under the legislation, the responsibility for maintaining safety on the site then passes over to the principal contractor. We must recognise that there is an industry-wide responsibility to ensure site safety and that it is not for us to try to impose measures on the contractor. The contractor will need to set out the measures that it will take and specify to us before each operation how it intends to proceed safely. It will seek to maintain its own reputation as a contractor that preserves life rather than loses it.
It is a serious question, in the light of what has happened.
Although the contractor will adopt his own construction techniques, we have produced what we call the specimen design in which we have designed the construction with safety in mind. For example, we envisage many of the components for the marine works being pre-cast components that are made in a safe location and floated into position, thereby reducing the risks of working in a marine environment. We cannot avoid all the risks, but that is where the planning comes in and the construction techniques that are chosen often reduce those risks. For example, a cable-stayed bridge is a safer type of bridge to build than a suspension bridge.
Can you provide an update on the current status of the main cables and the cable anchorages on the Forth road bridge?
That is a task for the Forth Estuary Transport Authority. I think that it will make an announcement on that in the near future.
You said that the state of the cables is fundamentally an issue for FETA. However, given that your project includes the bridge as a transport corridor, it must be an issue for you, as well; you need to be sure that it can perform the task that you want it to perform. I appreciate that there are issues around loading but, given the catalogue of problems that you have outlined, do you have any regrets about the fact that financial constraints mean that the new bridge will not be multimodal?
No. We think that the current solution is better and represents better value for money.
We will deal soon with item 2 on the agenda, under which we will consider aspects of the Forth Crossing Bill that will overlap slightly with some areas that we have touched on so far, but I have a final question before we do so.
I think that FETA regularly updates its board at board meetings, and I presume that it will continue doing what it normally does.
It will do what it normally does. That—
It will, at the moment, have information that we do not have.
We can put the question to FETA or ministers at another time.
Meeting suspended.
On resuming—
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Forth Crossing Bill