Infrastructure and Capital Investment Committee

Meeting date: Wednesday, March 14, 2012

Official Report 526KB pdf

---

Forth Replacement Crossing

Agenda item 2 is the committee’s second update from the Forth replacement crossing project team. We thank the team for its written update, which includes information on the progress of the project. Some of us have visited the project since we last took evidence from the team. I welcome our witnesses from Transport Scotland: David Climie, the project director; and Lawrence Shackman, the project manager.

When Transport Scotland officials last appeared before the committee on 7 September 2011 they gave an oral update on the progress of the Forth crossing project. Will you update us on the three main contracts?

Since we last appeared in September, we have made considerable progress on the project. In September, we were mobilising on the site and ready to start the work. In the past six months, the bulk of the design work has progressed extremely well and we have made a considerable start on the physical works for the project on the ground.

The principal contract is the largest one and includes the main crossing itself and the roads immediately to the north and south of the Forth. We have done considerable ground clearance in that area in order to get started on the line of the roads. We have also done work on Beamer rock in the centre of the Forth, including removing the lighthouse and doing blasting work to break up the rock so that we can remove it and excavate it down to foundation level. We have included some pictures in our report. The work is progressing extremely well.

We now have an excavator on Beamer rock. It is working 24 hours a day, removing the rock and taking it to the Ferrytoll embankment works on the north side of the Forth. Therefore, the material from Beamer rock will be recycled into the foundations for the roadway on the north side. Dredging work on the foundations of the south approach viaduct started at the beginning of March. We mobilised dredging equipment, which is now also working in the Forth.

In parallel with that, we have done a lot of work on the Fife intelligent transport system contract for the north—that will have been visible to the public. The traffic management for that was put in place in September, including 40mph speed limits in preparation for carrying out work on the foundations of the new ITS gantries and to put in the bus hard-shoulder running on the southbound carriageway. In the past six months, a lot of preparation work has been done for the erection of the gantries, which are currently under fabrication in England.

There has also been significant traffic management to the south of the river on the M9 and the M9 spur. We are fortunate that it has been a fairly dry winter, so we have made good progress in preparing for widening the M9 spur and erecting the first four ITS gantries, which were put in place during a night-time closure in early March. The first four gantries are now in place on the M9 spur.

The remaining gantries will be put in place during the summer, and their fabrication is progressing well. That contract is also on programme and running exactly as we want it to. Overall, the project is exactly where we would like it to be. It is nearly a year since the signing of the principal contract, and the initial mobilisation has taken place, the design work is progressing well and there is a lot of physical progress on the ground.

Can you highlight any key events that are likely to occur over the next six months of the project?

We publicised one such key event yesterday, namely the significant traffic management work on the north side of the Forth on the M90. There will be paving work on the southbound M90—we will completely repave the southbound carriageway and the hard shoulder, to allow for bus hard-shoulder running. That will involve putting in place a contraflow in the middle of April.

The southbound carriageway will be limited to a single lane on some weekends, to allow for the paving work. We will apply the surfacing via the echelon paving method, which will require us to close down the entire carriageway in order to pave the entire width of the carriageway at once. That eliminates joints in the surfacing and, therefore, creates a longer-life surface. That should mean that far less maintenance will be required in future. Those are the key things coming up on the north side.

On the principal contract, the caissons for the tower foundations will arrive on the site in about May. They will initially go to our marine facility in Rosyth for final work to be carried out on them before they are installed in the Forth itself. This is very much the year of the foundations as far as the main crossing is concerned.

We will also carry on with the dredging work on the south side of the Forth and progress all the remaining earthworks and roadworks on the M9 junction 1A contract.

Before I ask my question on the three contracts, I want to confirm that you are in a position to answer it. Do you manage the other two contracts for the intelligent transport system and John Sisk?

Yes, we do.

Our briefing notes tell us that a payment of £790 million to the principal contractor was a fixed cost, but they do not say whether the £12.9 million contract for the intelligent transport system and the £25.6 million contract with John Sisk are fixed costs. Are they fixed costs?

They are also fixed-price contracts. The only difference between the three contracts is that the principal contract for £790 million has an allowance for inflation. Because of the duration of that contract, it was not felt reasonable for the contractor to take the risk of inflation over the six years of the contract. The Fife ITS and the M9 junction 1A contract are of a much shorter duration, so the inflation risk is taken by the contractors and those are truly fixed-price lump-sum contracts.

Right. Sorry—which one did you say has inflation built into it?

The principal contract for £790 million.

So, the overall total of £828.5 million could rise through inflation.

Yes. That is right. We monitor inflation carefully from month to month, and the overall range for the final outturn cost of the project of £1.45 billion to £1.6 billion allows for a range of inflation in the principal contract from 2 per cent, at the low end, to 8 per cent, at the high end. Inflation has been allowed for in the cost ranges that have been published.

So, there will be no more to pay above the £828.5 million other than the 8 per cent inflation cost. Do you foresee inflation being higher than 8 per cent?

No, we do not. When we reported to the committee in September, inflation was trending towards the high end of the envelope. However, since then, inflation has very much come down and is now trending slightly below the mid-range on the project to date.

There has been a lot of interest in subcontracts. Transport Scotland has released information on the main contracts, but it seems that Transport Scotland is limited in the detail that it can release on subcontracts. My questions are about the ability that you either have or do not have to release details on the subcontracts. Before I begin my questions, it would be helpful if you could explain exactly how the subcontracting system works. To what extent does the main contractor have to subcontract, or does it have flexibility around what work it subcontracts? That is my first question. Secondly, to what extent did you know who the potential subcontractors were when the main contracts were awarded?

I will focus on the principal contracts—the largest ones that we are talking about here. When the contracts were awarded, we asked both bidders to include in their tender documents whether they would have any key subcontractors and key suppliers. At that point, they were completely at liberty to supply names or not—it was not compulsory—but we asked them to include the information within their tenders if they had decided during the tender stage that there were specific subcontractors to which they intended to subcontract. As far as the on-going strategy is concerned, it was within the control of each bidder to decide how they would carry out the work—whether they would self-perform it, subcontract it or put it out to supply orders. They had complete flexibility in how they would use their supply chain. We wanted to use these large global companies to ensure that we were getting the benefit of the synergies that they could get from their global supply chains. That was one of the key reasons why we were able to get the bids down to the level that we did, which is low in comparison with the estimates that we had received. We were transferring the risk to the contractors and to get them to accept that risk, we had to give them the flexibility to manage the project and deliver it in whatever way they chose.

11:45

Are you saying that the contractors are completely free agents when it comes to any work that they get someone else to do and where they get their supplies from? If they decide to subcontract, do they have to follow any rules for that, such as public procurement rules?

They would not have to follow public procurement regulations.

Do they have complete flexibility and freedom in those two areas: who, if anyone, they get to do work for them; and where the supplies come from?

They have flexibility as long as they meet the technical requirements of the project. We laid out in our employer’s requirements the fundamental requirements for the various materials and so on. They must comply with the employer’s requirements to ensure that the technical requirements of the final bridge are met—that is fundamental. That is the principal point. Where they go to and so on is completely open to them.

I was about to ask you who the subcontractors are but you seem to be saying that the contractors could have awarded subcontracts without going through any formal process. They could simply say, “These are people we use all the time. We’ll use them,” or, “These are people we always get our supplies from. We’ll go there.”

In some cases they could certainly have done that, if that was the most beneficial route for them.

We did have control over the form of subcontracts that the contractors used—we vetted that, but only to ensure that it did not conflict with the requirements of the principal contract and that all the obligations on the principal contractor flowed down to the subcontractors.

Can you explain why Transport Scotland cannot release full details of all subcontracts let by the main contractors?

The information that we receive from the contractors is purely a list of subcontractors and suppliers. Their monthly report lists which companies they have subcontracted to and who their supply orders have been placed with. We are unable to get the commercial details of the financial side of those subcontracts. That information is commercially confidential to the contractors.

You cannot release them or you cannot get them?

We do not have them.

I thought that some information had been released about the value of subcontracts going to Scottish firms.

Due to the good will of the contractors, we have been able to get a running total of what has been awarded to date, but that is as far as we have been able to go. We have been able to split that into Scottish companies and anyone else.

Can you require them to give that information or did they provide it voluntarily?

We cannot require it. We have no contractual ability.

They have given you that information. Is that what the £21 million or whatever is based on?

That is correct.

You have got the contractors to agree to release that additional information. Could you get further information or more detail?

No, I do not think that that would be possible. We have gone as far as we can go with the contractors in terms of what they are prepared to release.

It would not be possible because they would not agree to it or because there is some legal bar on it—

We have no contractual leverage to get more information.

And you do not think that they would want to give it.

I do not believe so.

My final question is whether you can release all the information on subcontracts in a single place. Obviously, the information is very limited but, in so far as you have any information, is it on your website or elsewhere? I do not know.

We intend to publish on our website lists of the companies that are working on the project. Also, in the written update that we provide to this committee every six months, we can give you an update on the running totals of where we stand on the project.

My colleague Margaret McCulloch is very interested in this. I think she wants to ask about it as well.

Before Margaret comes in, I wanted to ask another question about the contractors. You said that they can get whatever they want, wherever they like, but if the value of the contract is over a certain amount, surely they must be subject to European Union procurement rules and other rules.

No, I do not think so. In effect, it is no longer a public procurement. The public procurement stopped when we placed the three contracts for the FRC. Beyond that, it is no longer a public procurement.

Is that a loophole in the regulations?

I am not an expert on that area. It will be covered, I think, in the review of procurement, which I believe the cabinet secretary is considering at the moment.

On subcontractors, you said that you do not go through the procurement process to allocate work to other organisations that have been used before. Is that correct?

The principal contractor may have its own procurement processes, which we are not party to. How the contractor chooses to split up the work—whether it is subcontracted or performed in house—is entirely up to it. We have no input into or knowledge of that process.

Do you go through the procurement process for your subcontractors?

Absolutely. I should emphasise that that process is now complete. All the contracts for the Forth replacement crossing have now been placed—they were all placed in 2011. There are no further contracts or subcontracts to be placed by ministers for the Forth replacement crossing.

Throughout the procurement process, when you have been allocating work to subcontractors, has any consideration been given to building in initiatives to help sustain the employment of the individuals who are working on the project? It is brilliant that Scotland is benefiting by about £20 million but, in the procurement process, is there an allowance so that people will not find themselves out of work when the project comes to an end? Are there initiatives or projects built in that will sustain those individuals within the community or in other work?

The total amount placed with Scottish firms so far is £36 million. The principal contract works are being undertaken by the Forth crossing bridge constructors—FCBC—consortium. Morrison Construction, which is a firm based in Scotland, is one of the four contractors in that consortium. Obviously, any work that it does in house will have a Scottish element. Also, in the supply chain of orders that might have been placed outside Scotland initially, there is potentially a tremendous amount of work that could trickle down and result in local opportunities.

The overall approach to contracting and subcontracting work on the project is very much multi-tiered. We now have more than 400 people on site working on the project. They are all working and living in the area, and bringing money into the local economy. We also built into the contract requirements for training places—an annual average of 45 Scottish vocational qualification places, 22 professional places and 45 places for the long-term unemployed. We have passed down obligations to the contractors to try to ensure that we deliver a legacy from the project.

Is it not sad that the Scottish Government did not have the courage to put the welfare of Scotland first and allocate the whole contract to a Scottish company? You say that you employ only 400 people just now. How many people would have been employed if we had managed to allocate the whole contract in Scotland? How many unemployed people would have benefited?

That is a hypothetical question because, under the regulations, that approach to the awarding of contracts would not have been allowed.

I will move on to community engagement. I was a resident of South Queensferry for many years. When there was work on the existing road bridge, the two principal complaints were about noise levels and road congestion. Will you highlight the key concerns that have been raised by communities in the past six months, and how those concerns are being dealt with?

At the meeting in September, I mentioned that we had set up community forums as a means of communicating news about the project and upcoming events for the local areas and of gathering feedback from communities on how the work was progressing. We also have the contact and education centre as part of the project. It is currently based within the Forth road bridge offices on the south side of the Forth. That has given the general public a means of communicating their concerns—whether general inquiries or complaints—to us through the website, e-mail or our hotline phone number. There are a variety of means of communicating with the project team.

Since the project started back in August we have been tracking inquiries and complaints, which are running at between 40 and 45 a month, with about five of them being complaints. Noise is one of the issues that we have complaints about. For example, a lot of piling work was going on at the Buie Rigg estate in Kirkliston recently. The contractor was out talking to the residents when the work was going on. He gave notice of it before it started and tried to pacify the people as best possible. I think that he offered some residents who work at home alternative locations to work if they wanted. So, those sorts of things were dealt with pretty amicably.

There have been various complaints about landscaping or environmental matters, such as at Parklea on the Fife intelligent transport system part of the project, where we have undertaken to put in additional screen fencing, which was part of the project update report. Planting is going on at that location as we speak.

Those are some of the issues that we have had to address through our community liaison officers, who are appointed by each of the contractors.

On road works that will take place shortly, you referred to the north side of the existing bridge. Road congestion was a serious issue in the 20 years that I lived in South Queensferry. At times, the town was virtually cut off; people could not get out because of the congestion. How will you address such issues when you start working on that end of the bridge?

We are very conscious of the impacts that there have been in the past. We have worked closely with the Forth road bridge people to ensure that we learn from the lessons that they have learned. We also have our traffic management working group, which involves the local authorities and the police, to try to ensure that we work to minimise our impact on the local communities. Work has to be done, but we are conscious that we must find the best possible way of doing it.

We want to ensure that we have an integrated approach, particularly given the recent announcement of the work that needs to be done on the Forth road bridge. We have tried to ensure that we are joined up on that and that, rather than work against each other, we work together to ensure that we can get the maximum amount of work done for the minimum amount of disruption.

A lot of time and effort is going into that work. Originally, the traffic management working group met monthly, but recently it has met every two weeks to ensure that, because of the developing situations with the Forth road bridge, we are looking at the issues and implementing traffic management with the least amount of disruption.

In addition, a press release came out yesterday about the Fife ITS works that David Climie described earlier. We have also worked with ScotRail, which will provide a number of additional services over the weekends of those works to provide further means of getting across the Forth. When we have major traffic management works within the project corridor, our key message to people is if you can avoid travelling when those works are on, please do; use another route if you can, or use public transport to try to alleviate the problems. However, we obviously cannot avoid disruption completely.

We have touched on Kirkliston and South Queensferry, but other communities such as North Queensferry, Inverkeithing and Rosyth are affected, too. How effective have the contractors’ community liaison officers been in addressing the issues that members of the public have raised?

12:00

I think that they have been very effective so far. We have had quite a few compliments about the turnaround for dealing with inquiries or complaints.

There is no such thing as a good number of complaints, but the number has been relatively small to date. Our working to the code of construction practice, which is the set of rules by which contractors must abide, together with the working groups that have been set up through the bill process, has worked pretty well in ensuring that things are sorted out before they actually happen. That is helping to reduce the number of complaints.

You said in your update to us that the contact and education centre is

“on schedule to be completed in autumn 2012”.

Is it likely to be completed by then? What role will it play during the construction phase, other than the role of contact centre?

The centre is still on course to be completed in the autumn and we very much hope that the facility will be the means of educating people about the project. We are planning to set up a booking system—that will happen as we go into 2013, if I am being realistic—so that school trips, students and interest groups from all backgrounds can book up and come to the contact and education centre, where they can experience what is happening with the project.

We can tailor the experience to suit visitors, depending on whether they have an interest in engineering or are schoolchildren, so that we pitch it correctly. There will be plenty of means of communicating with visitors through webcams, display boards and models of the bridge, which will be in the exhibition space—we have discussed the models in this committee in the past—and we will be able to do presentations. We want to ensure that people can understand the engineering of the project, as well as the communication aspect and other aspects of it.

Can you summarise the impact of current traffic management measures on journey times and traffic flows?

Currently we have a 40mph section on the M90 from the Halbeath junction to Admiralty, and on the junction 1A section we have a 40mph limit from the Scotstoun junction with the A90, along the M9 spur all the way towards Newbridge. The increase in journey time for people, given that a 70mph limit has been reduced to a 40mph limit—although there are sections on the M9 spur where drivers would not go at 70mph, such as the loop and the section at the northern end of the spur, which has a 50mph limit—is about three minutes or so on the M9 spur and two to two and a half minutes on the Fife ITS scheme.

Have many people been caught going over the 40mph limit?

A press release went out—just before Christmas, I think—about junction 1A. A fair few people were caught speeding, but I am not part of the safety camera partnership, so I cannot tell you.

Where would we get that information?

It is held by the safety camera partnerships.

Are you getting a lot of complaints about the 40mph limit? Some people have said that the restricted section is far too long and could be reduced to cover the area where you are working.

We have had some complaints and inquiries. The speed limits are put in place to protect not only the workforce, who are working very close to the live running traffic, but drivers themselves. It is about setting the right balance, from a safety perspective. Safety is paramount when construction contracts are being carried out.

Sometimes, when people are travelling through the Fife ITS project—for example, on a Sunday—there does not appear to be any work going on. That is because the code of construction practice does not permit it unless there are certain circumstances, such as the weekend closures that are coming up to do discrete pieces of work. That can be frustrating to the public.

Have alterations been made by the contractors to reduce delays, or is that not possible?

It has not been possible to date. Of course, getting the works done as quickly as possible, to cut the amount of delays, is the only way forward. Sometimes that is dependent on the weather, for example, and sometimes the sheer logistics of the construction do not allow us to bring forward the opening of a restricted piece of road. We have not had much opportunity to take the speed limits off.

We were surprised that, when we put in traffic management and the 40mph limit on the M9 spur, which goes down on to the M9, that improved the traffic flow. A 70mph two-lane section went down to a single 40mph curve on to the M9. As the contraflow came into place earlier, that allowed better funnelling in of the traffic. It was noticeable that Kirkliston residents commented to us that the arrangements had improved the traffic flow there. We will want to maintain that when we put the two lanes into the final project at M9 junction 1A. That is one area where traffic management has caused an improvement.

Given that we have had a fairly open winter, is that part of the project ahead of schedule? Might the finishing time for the 40mph limits be nearer?

M9 junction 1A has certainly benefited from the dryish winter and the lack of snow—that has helped. The contractors indicate that they are optimistic that they may well finish early, but there is a long time between now and then and there are unknowns. The best that we can say is that the situation looks positive.

Will you provide details of recent activity on the development of the Forth replacement crossing public transport strategy and complementary public-transport-related schemes?

Since we last appeared before the committee back in September, the public transport workshop has had five meetings—two main meetings with all the stakeholders and three sub-meetings. Producing a refreshed public transport strategy has taken slightly longer than we might have envisaged, but the next draft is pretty well finished and we are nearing the stage of getting the minister to endorse that and getting public involvement, to see whether the public have any comments on the strategy. That will take a little bit of time. I like to think that we will certainly have a refreshed public transport strategy in place by the end of the summer.

Having said all that, I think that things have moved forward quite positively, particularly for the Halbeath park-and-ride site, which is out to tender—all the land issues for that have been resolved. Fife Council is taking the project forward and expects the facility to be built in the middle of next year. That is a good and positive aspect of the public transport strategy that is going ahead and which will dovetail nicely with the bus hard-shoulder-running scheme in the Fife ITS.

We have engaged considerably with the bus operating companies. We have looked at the types of bus that will use the hard-shoulder-running strategy. The companies have commented that they would like us to change from using buses of 28-plus seats down to using buses of 24-plus seats in our strategy, to align more closely with the types of bus that they might want to use. We are looking to take that forward as we go into the latter stages of the Fife ITS, so we hope to permit buses of 24-plus seats, for example.

A lot of discussion has taken place at the workshop meetings about the southern end of the project corridor—the terminal junction at Newbridge. A host of problems seems to be associated with bus movements through and across that junction. That is one area on which the refreshed strategy will focus. Additional bus lanes will be provided on the east and west sides of Newbridge junction, in conjunction with West Lothian Council and the City of Edinburgh Council. Together with other park and rides in the area, that is part of a larger potential improvement to get buses through and across the junction.

Thank you. We look forward to seeing the refreshed strategy and hearing the public’s views on it.

We heard previously from Transport Scotland that a decision on the future management of the new bridge and involvement of the Forth Estuary Transport Authority would not be made until 2013. However, a headline in The Scotsman on 19 November read, “Forth Bridge privatisation plans meet with anger”. In the story it was suggested that the Scottish Government intends to abolish FETA and let the management and maintenance of the two bridges to the private sector. I think that that might be a tremendous idea. Is there any truth in the story?

The minister announced that FETA would be dissolved through a parliamentary bill and a competition would take place to find a maintenance operator who would look after both bridges. The competition would be undertaken so that a new operator was in place well before the new bridge opened and there would be a chance for the new operator to have a handover with the contractor and Transport Scotland, in relation to the operation and maintenance of the new bridge.

On FETA staff, colleagues in Transport Scotland are working to ensure that there will be no job losses through the dissolution of FETA and that an arrangement under the Transfer of Undertakings (Protection of Employment) Regulations will be in place to transfer staff across. That is a positive step forward, and I think that the FETA board and staff have been pretty positive about it, in view of that information.

Will there be an open tendering process?

I believe that it will be a fully competitive tender. A timetable needs to be established for that, because there will need to be legislation to dissolve the existing FETA arrangements. I think that the idea is that the whole process could take about three years, so it will be 2014 or 2015 before the competitive tender goes out and is fully in place to enable the new operator, whoever that might be, to come in and take over the existing bridge and work with us to understand the maintenance requirements for the new bridge, in advance of it opening to traffic in 2016.

I understand from news reports last week that an independent advisory board is to be established to choose a shortlist of names for the new crossing, and that there will be a public vote in 2013 to choose the new name. Can you give us more detail about the process? What is the timetable likely to be for choosing a name for the new crossing?

We can give some initial indications, although the minister made the announcement only last week. The minister said that the advisory board will be appointed in the summer. The concept is that the timing will tie in with the opening of the new contact and education centre, around September, because we want to use that as the focal point for the exercise.

There is keen public interest in getting involved in naming the bridge, as the feedback from the press announcement showed. The intention is that at the time when the contact and education centre opens, we will open the competition for receipt of names. The panel will choose a shortlist from the suggestions, which will be put out for some sort of public vote in 2013. The idea is to try to have a name in place in advance of there being a lot to see of the bridge itself.

If there are no more questions, I thank both witnesses. We look forward to hearing about much progress when we see you in about six months’ time.

12:15 Meeting suspended.

12:16 On resuming—