Rural Economy and Connectivity Committee

Meeting date: Wednesday, May 15, 2019

Official Report 709KB pdf

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Transport (Update)

We move into public for item 2. I welcome people who are watching and taking part in the Rural Economy and Connectivity Committee’s 16th meeting in 2019. Will everyone please ensure that their mobile phones are on silent?

Item 2 is a transport update. We are somewhat late in starting, which I understand is due to traffic problems this morning—no doubt the cabinet secretary will update us. I will try to structure the meeting so that we get to the broadband issues that members want to raise, but there might be other questions that we do not get to and we might ask the cabinet secretary to write to us on those. I am sure that the cabinet secretary will be happy to acknowledge that at the outset.

With that in mind, I welcome Michael Matheson, Cabinet Secretary for Transport, Infrastructure and Connectivity, and Scottish Government officials Alasdair Graham, head of planning and design; Alison Irvine, director, transport strategy and analysis; Chris Wilcock, director, aviation, maritime freight and canals; and Andrew Mackie, head of rail franchising.

Given that we are so short of time, we will go straight to questions.

Good morning, cabinet secretary. I have questions about the delay in the delivery of the new ferries. Have you received a response to your letter to Ferguson Marine Engineering Ltd that sets out the new programme and the cost of MV Glen Sannox and hull 802? If not, when do you expect to have that information?

Let me first apologise for the delay in arriving. If, after this part of the meeting, there are outstanding questions that need a response, I will of course be more than happy to provide the committee with a written response.

On John Finnie’s question, at the beginning of May, the director of economic development in the Scottish Government received a response from FMEL to our request for further information on its planned programme. She has since had to go back to FMEL for further details on the timetable for the continuing work on both vessels and the associated costs, and she is waiting for those details to be provided.

Caledonian Maritime Assets Ltd has rejected a claim for additional costs from Ferguson Marine. Assuming that Ferguson Marine continues to claim those costs, how will the dispute resolution process progress and—this is important for my constituents—what impact will that have on the delivery of the ferries?

The committee will be aware that we have appointed someone to look at both sides of the dispute between CMAL and FMEL and to provide ministers with an impartial, independent view of the dispute. The process has already started and that work will probably take about four weeks to complete.

If the outcome is that there are costs that are attributable, the normal process of loans from the Scottish Government to CMAL would have to be gone through. However, it would be premature for us to say that will be the position, given the independent review that is being undertaken.

How confident are you that the fixed cost of £97 million will be realised?

It is a fixed-price contract for both the vessels. That remains the sum for their construction. Anything over and above that would have to be identified as an additional cost that was fully attributable to actions on the part of CMAL.

We are not yet at that point. The independent review will allow ministers to evaluate both sides of the dispute and come to a decision on the issue. However, if there were any additional costs that taxpayers have to meet through CMAL, they would have to go through the normal process of how loans are provided to CMAL for the construction of vessels.

Were that to be the case, what implications would that have for further ferry investments, which are much needed, as it is an ageing fleet? In the longer term, what would the implications be for the planned improvements to the ferry service?

At this stage, we are not anticipating it having any immediate impact on our ferry procurement programme. We will have to wait for the final outcome of the independent review to see whether there are any additional costs for CMAL associated with that. I do not want to prejudge that; it will have to be dealt with then. There is a potential impact but we have not arrived at that point.

In relation to the impact that the dispute has on services, it is disappointing that the MV Glen Sannox and hull 802 are so delayed. That means that we are not able to provide the additional services that we wanted to provide. On the Arran and Campbeltown route, the intention was to have two vessels throughout the year. That has not been possible because of the delay. The delay of the planned deployment of the additional vessel, hull 802, on the Outer Hebrides service has also had an impact.

You will be aware that in order to try to mitigate some of that impact, last August, we provided CalMac Ferries with a £3.5 million resilience fund to assist it in maintaining its existing vessels, to improve reliability. We have provided a further £4 million this financial year to continue to support that maintenance work and try to mitigate some of the risks associated with vessels going off-service. There has been an impact on our ability to provide greater resilience on some routes and to enhance services on other routes.

Will you please undertake to keep the committee updated on developments?

Of course. I am more than happy to make sure that you are kept informed as progress is made.

When did you last visit the yard to inspect progress on the two vessels? Can you confirm to the committee that work on both vessels is on-going?

I have not visited the yard; my ministerial colleague Paul Wheelhouse, alongside Derek Mackay, is engaging with the trade unions and the advice that we get on the progress of the two vessels is through CMAL. There is also an appointed independent individual who evaluates the work and the progress that has been made on the vessels. That information is fed back to the ministers to give them an update on progress.

09:30  

My second question was on whether you can confirm that work is taking place on both hulls.

My understanding is that work is being undertaken on the MV Glen Sannox, but I cannot give you exact details on hull 802. Chris Wilcock can perhaps do that.

The latest figures that we have from CMAL indicate that people are still working on both vessels.

So the resource has been spread across both.

According to the latest figures that I had from CMAL, which are probably a couple of weeks out of date, people are still working on both vessels.

Is CMAL on site to monitor progress, or is the Government just sending people periodically?

CMAL has a permanent presence on site.

I want to ask about the potential impact on the cost. I appreciate that there is an independent arbitrator involved in identifying the cost overruns, but we already know that the cost overruns are in the tens of millions, and that does not include any future additional cost to the build. Given that it was a fixed-cost design and build contract, if CMAL is found to have liability for the overruns, will they be met by the Scottish Government—that is to say, by the taxpayer? Why would that be done in the form of loans to CMAL, and how does that relate to the loans that have already been given to Ferguson Marine? Is there any correlation between the two?

One of the loans that was given to Ferguson Marine was to provide it with working capital for the build, and the other part of the loan was to help it to diversify and develop as a business. That was the purpose of the loans that were provided.

I will ask Chris Wilcock to cover the exact process of the CMAL funding and the loans arrangement that would be necessary. The independent reviewer has been appointed to look at the dispute between FMEL and CMAL and to give ministers an independent view and evaluation of that.

As I said to Mr Finnie, if liabilities are found on the part of CMAL, we would need to consider providing funding in order for CMAL to meet those. However, I do not want to get into speculation on the costs of that. We want the review process that we have set in place to be undertaken impartially and independently, to give ministers an informed position from which we can make a decision. I ask Chris Wilcock to talk about the process of the loans that had to be provided to CMAL.

On a technical point, the standard way that we fund the construction of vessels is through loans to CMAL that are then recovered over time though the charter agreement with the operator.

We would have to revisit that funding. I absolutely second the cabinet secretary’s point about speculation being premature. I am keen to maintain the integrity of the on-going work.

Sorry, I want to come in because I am completely unclear. When those loans were first announced—the £47 million pounds that was lent to Ferguson Marine—we were told in Parliament that they were to develop further business and allow the company to expand. Are you now confirming that those loans were working capital to allow them to build the ferries? The two statements do not tie up.

Two separate loans were provided to FMEL. One element was to develop and diversify the business and the other was to support the company with working capital.

So there were two loans of £47 million.

No. A loan of £15 million was provided for working capital. A loan of £30 million was provided to help to develop and diversify the business.

Thank you.

By default, that is an admission that the £97 million was never the fixed price. You just said that the Government gave an additional loan directly to the yard and not through the due process, which would presumably be via CMAL. Why did you give the money directly to Ferguson Marine, rather than to CMAL to give to Ferguson Marine? It seems like an anomaly in terms of how such projects are funded.

No. The funding that has been provided for the two loans came through a different route altogether, which is why the finance secretary is involved. It was provided through agencies for the purpose of supporting the business. It was not about ships or anything else; it was about supporting Ferguson Marine as business and supporting shipbuilding on the lower Clyde. Given the nature of the work that Ferguson was getting into in developing its ideas, the company had financial challenges around working capital, which is why the loan was provided. There is a measure in that loan for the money to be recovered to the taxpayer.

The loans that were provided to CMAL were provided through a separate process altogether. The process that has just been outlined to you is how we have funded the construction of ships and how we continue to fund them.

We agree that at the heart of all this, what matters to folk is that the ferries are delivered. They are clearly way over schedule. When CalMac was before the committee previously, they explained the extent to which that delay would put pressure on the existing fleet, given that the vessels operating on those routes are ageing and go offline on occasion.

Can you give us, or the people living in our island communities, any indication of when they might expect the new ferries to be in operation? You must have a rough idea.

I completely agree that where we are with these two vessels is certainly not where any of us want to be. We want to see the new vessels being used on routes.

As things stand, indications are that both vessels are expected to be completed next year. One will be completed in the earlier part of the year, prior to the summer, and the other will be later in the year. However, there are still some questions about the company’s ability to keep to that timetable, which is why I said in my response to John Finnie that the director of economic development will seek further details and assurances about the timeframes that have been set out.

I know why we saved Ferguson Marine, and I do not want to get into that. However, we ordered two new ferries, which are delayed. The fleet is getting older—we know that. Do you have any plans to order new ferries in the future? If the ones that are on order just now are delayed, should we not be ordering future ferries right now?

The next ferry that was due to be replaced was the one that operates on the Islay route, and the specification for that particular vessel is being done at the moment. The process is on-going with a view to finalising the specification and putting it out to procurement. That is the next vessel that is planned.

You might be aware that we are undertaking wider work through our review of the ferries plan, with a view to developing a new ferries plan. The current one goes up to 2022, and we are doing a range of work to prepare for the next stage of the new plan.

The process for the next ferry to be replaced is on-going. The work has not come to a halt. We are just waiting for the first two ferries to be completed.

When do you expect to consult on the ferries plan?

We are scoping some of the process at the moment. Some evaluation has already been undertaken of the ferry services in Orkney, Shetland and the Western Isles. We are also carrying out some research on the road equivalent tariff and we will feed all that into the process.

The process is due to be discussed again at the islands transport forum in August this year. That will be chaired by the islands minister, Paul Wheelhouse. We will then be in a position to set out the timeframe for the normal public consultation exercise.

A number of the stakeholders who have an interest in these matters are already engaged in the process and are looking at some of the scoping work and the issues that need to be addressed in the next ferries plan.

You said earlier that both ferries will be delivered next year. Could you write to the committee with some dates? It seems odd to me and I am struggling to understand how a ferry that was launched 18 months ago and is floating will be completed at the same time as a ferry that does not have bows or a stern. If they are truly to be delivered at the same time, I am confused. I am not sure that that is what you meant, but we do not have time to probe further on that. Please could you write to the committee with the exact dates when those ferries will be delivered as soon as you know them?

The Aberdeen western peripheral route is now fully open and that is welcome. Are any snagging works on-going and, if so, how long might those last and what impact might they have on the travelling public?

I am glad that you are enjoying the benefits of the AWPR. All the feedback that I have had from people in the north-east is that they welcome the new road. With any major piece of infrastructure, snagging or tidying-up works always have to be completed after it is opened, and that is the case with the AWPR. There is still some planting to take place and some bits of work around junctions with local roads that have to be updated. My understanding is that that work will be carried out during the summer months and, once it is complete, the outstanding snagging and tidying up work will be complete.

There has been some criticism—rightly so, I believe—that the signage on the road is not particularly clear or beneficial to drivers who are new to the road. Is anything being done to consider how the signage could be made better?

I am sorry, but I missed out the second part of your earlier question, which was on delays from the snagging work. Most of the snagging work will not involve any delays. Where there is a need for a bit of a road closure, it will take place at night and will be of a limited nature, so I do not expect it to cause any particular difficulty for those using the AWPR.

The process for any major road of this nature is that a detailed audit is undertaken of the signage before the road opens. The signage has to go through a standard process of checking it to ensure that it complies with the requirements for a road of this nature. That process was carried out prior to the AWPR opening, and all the signage was found to be compliant. If people have concerns about particular signage, I am always happy to ask for those to be looked at. However, the signage went through the audit process that is laid down for major roads of this nature and complies with the requirements. The appropriate signage is all in place. If the member wants to draw particular issues to my attention, I am more than happy to make sure that they are looked into.

Fair enough. Thank you.

When the AWPR contractors came before the committee on 5 December, they told us that they had lodged a claim against Transport Scotland for additional costs incurred in the construction of the road, which were primarily due to delays in the delivery of utility diversion works and extreme weather. What is happening with that claim and how is it being addressed?

The claim is still outstanding, but I can give you the most up-to-date information that I have from officials. I have said previously in Parliament and in the committee that it is down to the contractors to substantiate their claim. To date, they have not been able to provide a sufficiency of evidence to substantiate it. Therefore, the onus is still on them to demonstrate any additional costs and provide evidence to support that. There is on-going dialogue between Transport Scotland officials and the AWPR companies on the matter.

We are operating in the dark a little, because nobody on the committee knows what level of claim the contractors have put in. I could understand that if the claim was commercially confidential because a contract was about to be awarded—that would be perfectly fine—but we are talking about work that has been completed. The public and members would like to know what level of compensation we are talking about. I do not want to know the exact figure in pounds, shillings and pence, but it would be helpful to know what level of claim the contractors have lodged against Transport Scotland.

09:45  

That is commercially sensitive information. It is important to keep in mind that the onus is on the contractors to demonstrate any additional costs that they have incurred. It is not for me to sit here and accept any liability without the contractors providing the evidence to substantiate their claim. I am prepared to update Parliament should any final outcome to the claim be arrived at, but I will not get drawn into providing figures. If the companies that have lodged the claim choose to do that, that is a matter for them, but the process that is involved is one that is normally dealt with in confidence because of commercial sensitivities and the potential impact on the companies.

The onus is very much on the companies to demonstrate liability and the evidence to support their claim.

We were told that the contract was a fixed-term contract and in the normal —

It is a fixed-price contract.

Yes. That was a slip of the tongue—it is a fixed-price contract.

The layman would normally assume that a fixed-price contract is just that. It is a bit puzzling that the contractors think that they have a claim, given that it is a fixed-price contract, the contract has been completed and delivered and the price has been paid. I am trying to get a handle on why, if it is a fixed-price contract, they would put in a claim.

That is a question for them, because it is a fixed-price contract. Such contracts protect taxpayers. The contractors were told about the construction project that they were being asked to undertake and they came back with a cost, which was agreed as the fixed cost. As I said, the onus is on them to demonstrate any liability that has resulted in their drawing in additional costs. Clearly, the collapse of Carillion had an impact on them, as it was one of the main contractors in the joint venture, and weather events had an impact on the timeline, which will have had an impact on the contractors. However, any additional costs for the taxpayer have to be evidenced and demonstrated. To date, the companies have not been able to do that.

In that case, I think that we need to have the contractors back to the committee.

I am sure that the committee can consider that in due course.

Cabinet secretary, can you provide as with updates on the A9 and A96 dualling projects?

In the A9 project, one section has been completed and the second section is under construction. Balfour Beatty secured that contract last year and progress has been made on it. For the remaining sections, 95 per cent of the orders for the route have been issued. Some will potentially go to local public inquiries, but others will not. The one section remaining is the Tay crossing area at the Pass of Birnam, for which there is a co-creative process, which takes longer to undertake. However, we expect the preferred route on that section to be finalised by the end of this year, which means that all parts of the finalised route will have been agreed by then. Good progress has therefore been made and the project is where we would expect it to be at this point.

Are you a fan of the co-creative process?

We want to evaluate it, given that this is the first time that it has been utilised. It is a longer process and more time consuming, but we want to learn from the use that we have made of it in that section of the A9 and evaluate how it could be used again in the future. Clearly, the process has merits and we want to understand how we can make more use of it.

Would it be helpful for me to speak on the A96 as well, or do you want to stick to the A9?

I have a supplementary question on the co-creative process, as I suspect that you knew I might. We have been assured of an evaluation of that process for a long time and there is great frustration, particularly in relation to the A96—as you may be aware—that the same level of engagement has not been afforded other communities. When will that evaluation be complete and when can you roll the process out to ensure that there is maximum citizen involvement in these major capital projects?

As you will be aware, the section of the A9 in question has not been completed yet, so the whole co-creative process is not yet at an end, because the final route choice has not been made.

What is the timeframe for that?

That should be completed by the end of this year. A consultation exercise is being undertaken on the route options that came from the co-creative process and other options that have been identified. That will start this month and there will be a number of events that will allow members of the public to get involved and to feed into the process on the identified routes.

When we have completed the route selection process, we will be in a position to carry out an evaluation of the co-creative process to see what lessons can be learned from it and how it can be used in the future. However, it adds a significant amount of time to the process so we want to make sure that we learn from that.

I want to draw your attention to an email about the A96 that the committee has received from a member of the public. I will summarise the main points. They are concerned that the A96 project is being pursued in isolation from wider transport developments in Moray; that co-operation between Transport Scotland and Moray Council on tackling key transport problems in towns such as Elgin and Lossiemouth has been limited; and that the public benefits of the project have been overstated. They also say that the A96 is used as a series of local roads rather than being used for end-to-end journeys and that dualling of the A96 was rejected by a range of community organisations.

When you give an update, could you say whether you believe that the co-creative process being applied across the A96 would have addressed some of those concerns? Will you comment on the point that this is a major project that is being carried out in isolation?

The co-creative process is looking at the particular route options and engaging the community in the process. That is how it was utilised on this occasion.

For the A96, there has been a rolling programme of engagement over an extended period of time. So far, 5,700 people have participated in that. They have attended events that Transport Scotland has organised to look at the dualling of the A96. That has resulted in a significant amount of feedback from local communities.

I recognise that undertaking any major infrastructure project will mean that some are not happy with it happening in the first place, and some will not be happy with the decisions that are made about the routes that are in and those that are out, or with the route that is finally chosen. However, I strongly dispute any suggestion that communities have not had an opportunity to be fully involved in the process and not been able to feed their views into it. The number of people who have attended the events that were organised around the A96 process demonstrates the level of public input that we have had so far.

Do you have evidence that that public input has been reflected in the decisions that have been made? A significant percentage of the public who engage feel that their engagement is academic because this big juggernaut of government will do what it was going to do anyway.

We can evidence that through what will be undertaken during the next couple of weeks. Part of the public engagement programme will look at the routes that remain as possible choices and give details about the routes that have been excluded and say why they have been excluded. That means that those who are disputing the issues around some routes will have the details set out about why routes have been excluded. It is not just a case of pushing on with the routes that have been chosen; it is also about explaining the routes that have been removed from the process. That is an opportunity for the public to understand that and feed back into the process by making their responses known.

On the A96, there is great concern about the routes that are still on the table for the Inverurie bypass. I met members of a group the other week. They were very professional and had a well-argued case that dualling the existing route was far and away the best option. I do not know whether you are aware of this, but I have asked for a meeting with you as soon as possible, to discuss the matter. I invite you to allow those people to come and speak to you, because they are professional people with a well-argued case that needs to be heard. I am talking particularly about the Inverurie bypass section of the A96.

I have had engagement on that specific issue, and I have answered questions in the chamber on it in the past couple of weeks.

The public consultation process that I think will start in the next couple of weeks—my officials are confirming that—will set out the clear reasons why the online route to which you referred has been excluded. A key factor is the space that is available to create the carriageways. It is to do with the number of houses that would have to be demolished and the gardens of people who live adjacent to the road that would have to be removed to create carriageways of the necessary size and the embankments that would be necessary.

There are good, practical reasons why that route has been ruled out, but the people who are involved in the campaign that you mentioned will have an opportunity to feed into the public consultation process, which will explain the situation in detail, in the next couple of weeks. There is a process whereby the individuals can engage, and I encourage them to do so.

I also encourage people who are in favour of routes other than the online dualling route to express their views. The process that is in place is robust, thorough, detailed and fair, and it allows people to express their opinions.

Mr Chapman, I must ask you to take up the issue with the cabinet secretary later, given that time is short.

Cabinet secretary, can you confirm that it is still the Government’s intention to ensure that all our cities are connected by dual carriageways?

In relation to parts of the A96, is it not the case that we are seeing a kind of nimbyism, with people saying, “I have the dual carriageway as far as my place and it doesn’t need to go further”? Is it not important that we get on with the work, regardless of the actions of a number of landowners around Inverurie who do not think that the dual carriageway should go further?

I understand that there is a difference of opinion here. Can you give a short answer, cabinet secretary?

The dualling of the A96 is a major part of our transport infrastructure and improving the local economy, given the economic benefits that come from better connectivity.

There is a robust and thorough process for considering all proposed routes. I am very conscious that when a major piece of transport infrastructure is upgraded or put in, there will be people who are not in favour of particular routes, people who are not in favour of the development at all and people who are in favour of the development and want particular routes. There is a thorough process that considers all the issues—as has been happening—and people who have opinions have the opportunity to use the consultation process, as any member of the public does, to express their views.

Thank you.

I want to ask about the Queensferry crossing. In response to a question from Peter Chapman, you referred to snagging. Can I confirm that your definition of “snagging” is the same as mine? I am using the definition

“minor defects or omissions in building works for the contractor to rectify”

after completion of the project. Is that the definition that you are using?

By and large.

Okay, perfect. There were 23 issues on the list that was submitted to the committee earlier this year. Will all that work be completed by October this year?

The contractor is still working to that timetable. For example, the painting of the cable guide pipes is complete, the snagging work on the windshield is complete, the issue to do with the construction of the tower lifts, where there was—

We will come back to the tower lifts. An omission from the contract is hardly snagging.

The lifts are being manufactured, given the previous technical issues.

The under-deck painting is now under way. Architectural lighting is operational, and the commissioning of internal mechanical and electrical equipment is progressing well. The contractor continues to make good progress on the mobilisation of the workforce, which was a challenge in relation to some of the work that had to be undertaken, and is still working to a timetable for completion this year.

So it should be completed by October.

That is the timetable that the contractor is working to. As you will appreciate, some pieces of work are weather sensitive, which could have an impact on the completion of that work. For example, some aspects of the painting work are weather sensitive. If we get weather that allows the contractor to complete it all by October, it will be in that position, but there is always potential for delays if the weather has an impact.

I want to go back to your comment about the lifts and look specifically at that issue. The lifts had not been put in when the bridge was opened. It seems to me that that cannot be classed as snagging. If a major part of the contract was not built, that is more than snagging. Do you agree?

You understand the reasons why the lifts were not installed.

There will always be a reason for something, but when the contract was completed, we were told that there was just minor snagging to be done. Actually, one of the main parts of the contract was omitted—there were no lifts. It is rather like saying that a house has been completed apart from minor snagging when there is no staircase.

It would be difficult to live in a house without a staircase if you had to live upstairs. The difference is that the bridge can be used without the lifts being in place—

You still believe that that is minor snagging, even though—

The bridge is perfectly safe and able to be used without the lifts being in place. It is a bit different from a staircase in a house.

The next issue with the bridge, which was highlighted earlier in the year, is that cars were damaged by ice dropping off the cables. It was reported that cars were hit by ice and there was significant damage. How are you resolving that?

My understanding is that contractors have been appointed to monitor the issue, identify the exact source of it and look at what mitigation may have to be put in place if that is the case.

Okay, but the problem has been identified on other cable bridges like the Queensferry crossing where it is cold. Should it not have been foreseen on the Queensferry crossing?

I cannot comment on other bridges. The issue was not anticipated for this bridge, and that is why the contractors are trying to identify the exact source of it and what measures could appropriately be undertaken to try to address the issue.

It is of concern, because last winter was not a particularly cold one. We had colder winters in 2010 and 2011. In those years, the problem would have been significantly greater, resulting in the bridge being closed. Do you foresee that happening in the future?

That is why the contractors are looking to identify exactly what the source is and what measures can be put in place. Clearly, if there is an issue with ice gathering at particular points on the bridge frame, it may be that they have to take measures to address that.

When are the contractors due to report?

Part of the challenge is around the time when they can identify exactly where the ice is forming. They have work in place to identify where they believe it may be occurring and to look at what measures can be put in place, but I cannot give you a specific timeline for when the matter will be resolved. I am more than happy to keep the committee up to date as to when it is identified and what measures are undertaken.

It would be of serious concern if we had to wait for more ice to form before they could identify where the problem is. You are not suggesting that that is the case, are you?

I am not. I am just saying that it may take them a bit of time to identify exactly where the main areas of risk are and what appropriate measures can be put in place. They are already taking forward work to try to identify that, and I am more than happy to keep the committee informed of progress.

When do you believe the lifts will be completed?

The work is all due to be completed this year. The lifts are under manufacture at present. The most up-to-date information that we have from the contractors is that they expect the work to be completed this year.

We will move on to the next question, but I have to say that the omission of the lifts seems to me to be more than minor snagging, which is what we were told was outstanding. It is fundamental, and it will be difficult to identify the ice if people cannot get up to the top of the bridge to see where it is forming. However, so be it.

Good morning, cabinet secretary. Will you update us on implementation of the first of the two ScotRail remedial plans on performance? The remedial plan was called for to improve performance, but the agreement does not introduce any new performance requirements. What would happen in the event of the plan being implemented in full only for performance to be still below breach level, as it currently is? Would that constitute default on the agreement?

As I told the committee previously, yes, it would.

Will you clarify what the performance requirements are within the remedial agreement?

The purpose of the remedial agreement is to get ScotRail out of breach. If it does not implement the remedial plan effectively and remains in breach, it will fall into default.

The plan runs until 2020; at what point during the time until then should we see improved performance? If performance continues to fall and it is clear that it will not rise above breach level by the end of the plan, when will you intervene? What action will you take? Will you just wait until the end of the plan?

Do you mean in relation to the areas of breach that the remedial plan exists to address? That is what the remedial plan is for.

Yes, the remedial plan is to improve performance. The plan is set to run until 2020, but if it becomes clear during the course of the plan being implemented that performance is not improving but continues to be below breach level, what action will you take? Will you simply wait until the end of the plan to see whether performance is above breach level then, or will you intervene earlier if it is clear that performance is not improving?

One of the aspects that are set out in the remedial plan is completion of crew training by the end of this month. The most up-to-date information that we have from ScotRail is that it is on track with that. That will have an immediate impact on passenger services.

Services that have been being cancelled as a result of a lack of train crew, because crew have been in training, will no longer be cancelled. That was a specific problem on the eastern part of the network. We will see improvements in that respect.

In fact, over the past three weeks we have seen improvements. The number of cancellations resulting from crews being in training has been reducing week on week, as they have completed the training programme. That is a practical example of the benefits that will come from implementation of the remedial plan. I do not expect there to be no improvements, given that improvements have already started as a result of implementation of the plan. However, that breach is specific to the eastern sector and results from cancellations due to a lack of train crew. The specific purpose is to get ScotRail out of that position. The progress that we have seen in the past couple of weeks indicates that we are already starting to see some signs that that is happening.

You are correct that the breach is very much in the eastern region.

On a general point, ScotRail should be hitting a performance target of 92.5 per cent as part of dealing with the breach. When you last came to the committee, you indicated that you believe that the target will be reached by March 2021. Do you stand by that?

That is still the target that has been set—

Is it your belief that ScotRail will hit that target?

I want to see ScotRail reach that target: we are continuing to press it to make sure that it does—

Do you think that ScotRail will hit that target?

Once all the rolling stock is in place, the crew issues are resolved and there is greater resilience in the infrastructure, ScotRail can hit the target.

However, 65 per cent of all cancellations and delays result from infrastructure problems; if they are not addressed, that will inevitably impact on ScotRail’s ability to reach the target. As I have said many times, both parts of the railway need to play their parts to ensure that passengers get the best possible service. If they do that in delivering a more consistent and reliable service, the target can be reached.

The remedial plan does not say that ScotRail will reach the target by March 2021. There is a difference—it says that performance will still be below 90 per cent at that point, whereas the Donovan review says that it will reach that target.

The remedial plan is not to get ScotRail to that point. The remedial plan is to get it out of breach.

The projections in the remedial plan say that ScotRail will not reach that 92.5 per cent target across Scotland. Why is there a difference?

I explained this the last time I was at the committee. There is a difference between what is in the remedial plan and what is in the Donovan review; the Donovan review work will take longer to implement, which is why there is a different target.

You said that it is possible that ScotRail could reach the target, but the question was whether it will. Do you think that it will? That needs a yes or no answer.

ScotRail can and will do that, if all parts of the rail network, including Network Rail, ensure that we have greater consistency on the network, particularly in infrastructure.

I will take that as a yes.

I have been labouring that point for month upon month. ScotRail is doing a good job. I was on a train a couple of weeks ago—it was on time, it did not skip stops and it had an excellent conductor. ScotRail has problems, but its major problem is the fact that we do not control Network Rail. Every day, 950 trains go into Glasgow Central station; they are affected if a signal is down or something else is wrong that is the responsibility of Network Rail. What are we doing to get control of Network Rail? Will we never get control of it?

The Williams rail review is taking place. Our view is clear—the Scottish network needs to be controlled in Scotland, so that decisions about timetabling and all infrastructure matters are made here and not in Milton Keynes, as they are at present.

As I have said repeatedly—I know that the convener did not like to hear this in the chamber—the reality is that Network Rail plays a key part in delivering reliability on our railways. That is not just an issue for the Abellio ScotRail franchise. The impact of Network Rail failures on ScotRail’s performance today alone are marked. The failures include signalling failures, points failures and debris on the line. A major signalling failure occurred at Busby yesterday and went on for hours. That had a major impact on what had been a good day: performance suddenly dropped right off.

People who point the finger at Abellio ScotRail and the Scottish Government miss the point that ScotRail and Network Rail both have parts to play. We can do everything that we can to upgrade the rolling stock—we are doing that with the new Hitachi trains and the new high-speed refurbished trains, which are coming online but have been delayed by Wabtec Corporation—but we cannot ignore the fact that 65 per cent of delays and cancellations are caused by infrastructure failures. That has a direct impact on passengers’ experience. That is why the Office of Rail and Road has recognised that Network Rail’s performance is not good enough and has issued it with notice to address that.

If we are serious about delivering better services for the public, both parts of the railway system need to play their parts, as I have repeatedly said. We will do everything that we can to ensure that ScotRail plays its part, but we need Network Rail to deliver, too.

If you are pressed today to promise that ScotRail will meet this, that or the other target, does that depend on Network Rail—yes or not?

Yes—and I do not control Network Rail.

I think that I have proved my point that ScotRail is saddled with Network Rail.

On 8 February, Transport Scotland issued Abellio with a second remedial plan notice for failing to meet the customer satisfaction targets that are set out in the franchise agreement. Will you provide an update on Abellio’s development of the second remedial action plan, which is to improve customer service?

We received the draft second remedial plan from ScotRail on 3 May. It is being evaluated and assessed in the same way as the first remedial plan was. We will look to embed the second plan as a contract requirement for ScotRail, and we will publish what the plan contains to address the deficiencies.

Does the plan deal with car parks, litter and the state of the outside of stations? Some car parks are not even near the stations. Should we really be assessing ScotRail based on how a car park looks?

I do not want to cut you off in full flow, Richard, but I am concerned, because we have lots of questions to get through.

Other members have asked questions, and I am asking mine.

Mr Lyle—please.

I ask for a brief answer so that we can move on to other questions and all members get a chance to ask a question.

10:15  

The remedial plan relates to Transport Focus’s national rail passenger satisfaction survey, which has a wide scope. The areas that it covers include station facilities such as car parks. Separately, we audit ScotRail through SQUIRE—the service quality incentive regime—on car parking and so on.

Jamie Greene has a brief follow-up question.

The cabinet secretary will be aware that this is mental health awareness week and that ScotRail recently announced that it will train 50 of its staff in mental health first aid, which is to be welcomed. Are you aware of any other publicly funded or subsidised travel operators in your portfolio that are looking to do the same?

No—I am not aware of any, at present.

Will you press other operators to think about that?

I certainly want to encourage them to do that. The work that ScotRail intends to undertake is positive and sends out a strong message. I encourage it to consider extending the programme beyond the 50 staff that it is initially setting out to train in mental health first aid skills.

The “Cycling Action Plan for Scotland” says that 10 per cent of all journeys are to be made by bike by next year. The latest figures that we have are that the figure for journeys to work has risen from 2.3 per cent to 3 per cent, although there is wide variation by area in that. The target obviously will not be met, although the whole point of having a target is to work towards it.

There are practical ways to do that. In 2017, I moved an amendment in Parliament that said that we should give schoolchildren access to cycling proficiency training, but the latest figures show that most children do not have access to it. As transport secretary, how can you make a practical difference in order to get the figure up to 10 per cent, rather than just setting a target and saying that that is what you want to do?

I agree that it will be extremely difficult to achieve the target within the timescale that we now have. You are right that there are variations across the country: for example, in Edinburgh, the number of residents who cycle to work has increased to 9.8 per cent, so there has been a marked increase there. However, the average is about 4 per cent, so we are well off target and are not where we want to be.

A number of key things are important. There is no doubt in my mind that cycling infrastructure is an important element in helping to encourage and support people to choose to cycle. That is particularly the case with parents who are trying to encourage their children to cycle.

Our active travel budget has doubled to £80 million a year, and we should keep in mind that the money from the Scottish Government is matched by local authorities so, in any given year, we could have up to £135 million being invested in cycling infrastructure. That is a key part of supporting people to take up active travel options such as cycling.

I recently visited the south side of Glasgow, where a major cycleway is being put in. There are plans for several other major cycle routes throughout the city to make cycling easier. That work is being supported by our active travel budget and funding from Glasgow City Council.

A second important element is cycling proficiency. You are right that some local authorities are more proactive than others in supporting cycling proficiency training. I would like a more consistent approach to cycling proficiency being taught in schools, so that young people have confidence in their ability to cycle and have the necessary road sense.

One thing that I want to happen as a result of where we are with the target is consideration of how we can better achieve an increase in cycling by increasing the number of people who are confident about being able to cycle to work. We are presently looking to undertake that work.

I understand entirely that the infrastructure has to be there, that you are focusing on trying to achieve that and that a lot of progress has been made. However, the Parliament and the Scottish Government are in agreement—you just repeated it—that we have to get our kids into the way of cycling.

I know that your focus is on the infrastructure, and obviously the Cabinet Secretary for Education and Skills is focused on schools. Have you had discussions with him about trying to get our schools to increase their uptake of cycling proficiency learning, because it is about joined-up government, is it not?

It is about joined-up government—it is not just about education, but is about sport and physical activity, so there is a health element that we should acknowledge. A number of Government portfolios therefore have an interest in the matter. We have had initial discussions about how we can try to address that, particularly on the health side and the sport side.

Would you take that up and act as a catalyst?

I have already identified cycling as an area in which I think that we need to do more. Of the £80 million a year that we provide, about two thirds is capital investment and the rest is revenue funding. We support a range of organisations and initiatives to support walking and cycling. For example, near my constituency office is an active travel hub that is funded by the active travel scheme to help and support people in getting information and advice if they are looking to take up an active travel option. It is proving to be very popular.

I accept that we clearly need to do more, and I accept your challenge that it be taken up on a cross-portfolio basis.

Thank you, cabinet secretary. I would have liked to bring in John Finnie, because I know that he has a question, but we are pressed for time. I am sorry, John.

I invite John Mason to ask his question succinctly, because I would like to get something in about the reaching 100 per cent—R100—programme.

Can you update us on the national transport strategy and the strategic transport projects review? Will the Glasgow metro be part of that?

The NTS process is on-going and the public consultation process will start in the summer, which will allow people to feed in. We have up to now engaged with stakeholders and a range of interested parties, but the engagement will be more intensive over the summer months, which will allow us to consider finalising the NTS by the end of this year. That will, in part, allow us to undertake the STPR 2 process.

We have already started some of the work on STPR 2—for example, the Borders transport corridor study, work that we are doing in the south-west of Scotland and work that is being done in Argyll. That is all pre-appraisal work that is necessary to feed into the STPR 2 process.

We are also in the process of setting up the regional transport working groups, which are bringing together stakeholders in the regions to identify the transport issues and feed into the STPR 2 process, which will be completed during this session of Parliament. The work is on-going and the consultation this summer will allow people to feed into the NTS process specifically and then the STPR processes.

And Glasgow might not be forgotten about.

No, Glasgow will not be forgotten about, Falkirk will not be forgotten about, Paisley will not be forgotten about, Lanarkshire will not be forgotten about, the Highlands will not be forgotten about and the north-east will not be forgotten about. It is a national process, so all parts of the country will be given due consideration.

I am sure that somebody will scrutinise the Official Report to find out what area you left out.

The islands will be included as well. [Laughter.]

There are some very important questions on climate change that, unfortunately, we are not going to get to, so the clerks will write to you with members’ questions on that.

We move now to the R100 programme. I welcome Robbie McGhee, who has joined the panel. Gail Ross will ask the first question.

Good morning. Cabinet secretary, can you or your officials provide the committee with an update on the completion of the R100 tendering process? At the Conveners Group last week, the First Minister implied that it would be completed later this year.

The First Minister was correct: the procurement process will be completed later this year. The dialogue process is complete and the companies that are involved in the procurement process are working up their bids, which are due to be submitted this summer. That will allow them to be evaluated and allow us to appoint a preferred bidder later in the year.

Without prejudicing that process, can you give us any insight into the delay?

There have been a couple of factors. Early in the process, one of the bidders raised a complaint about one of the other bidders breaching the code of conduct. That had to be investigated, which caused a delay in the process.

As we took forward the gainshare process from the digital Scotland superfast broadband programme, a number of areas were identified where additional investment could be made. The commercial market then identified areas that matched some of the areas that we were planning to go into. The United Kingdom Government then slightly changed its position on how some of its funding could be used in the gainshare element, which meant that properties that were in had to come back out, and we then had to allow the companies time to take that information back into their modelling processes.

At the core of all that is our keenness to get the best possible deal for the delivery of superfast broadband. This is the only project of its type and size in the UK. It is a complex project, so it has resulted in some real challenges for the industry. The geographical challenges that it will face, including the civil engineering challenges, must be looked at. As a result, the industry has asked for a bit of extra time to undertake those evaluations more fully.

Rather than pushing the companies to the point of disengaging from the process, we have sought to give them additional time to allow them to go through what they need to do more thoroughly. We want to keep them engaged in the procurement process and, to date, our approach has been effective. That is why we have given additional time and why the process is slightly behind the original timeframe.

I just want to make a quick request for you to write to tell the committee what the gainshare is at the end of the process.

I am more than happy to do that.

Thank you.

Cabinet secretary, we were expecting the contracts to be awarded and agreed in February, but they were delayed until May. It was then announced that they would be awarded in the summer. You are now talking about later in the year, which obviously means after the summer. I am just trying to understand specifically when we think the contract will be announced and when who has got it will be made public.

We expect that to happen in the autumn. Once the process has been completed, we will be in a position to look at awarding preferred bidder status.

You know that I have a problem with seasons, cabinet secretary—they stretch over three months. Could you give me some clarity? Are you talking about the end of the autumn?

You will understand my reluctance to give you specific timescales when there are issues that lie outwith my control.

We failed to get a date earlier. Autumn is the closest that we are going to get.

It will be in the autumn—around September or October, we expect. That is the timeline that we are on with the contractors just now. However, I need to emphasise that we are giving the contractors the additional time that they need to undertake the procurement process as thoroughly as possible, so that we can get the best deal possible.

I will let Peter Chapman ask one brief question, and then we will close the discussion on time.

The timescale is obviously slipping. Even before these delays, Audit Scotland said that it would be difficult to deliver 100 per cent superfast broadband by 2021. It is pretty obvious that that timescale is not going to be achieved. To me, “by 2021” means by the end of 2020. Is that what you believe?

No—otherwise we would say “by 2020”. When we say “by 2021”, that refers to the year 2021.

Is there any chance—

I am sorry to interrupt but, to add clarity, when I asked the First Minister that question, she made it clear that the timescale that the Government is working to is “by 2021”, and she intimated that it would be May—about the time of the election.

10:30  

When can we realistically expect the R100 programme to be completed?

Peter Chapman raises a reasonable point. As the Audit Scotland report highlighted, the timescale is challenging and will be difficult for us to meet. The contractors will be presented with challenges, given the nature and complexity of the contract and the civil engineering that will be needed in some rural areas. We will have a more accurate picture once we have the final tenders from the companies, which will give us a clearer outline of the timeframes within which they believe the work can be achieved.

Given the nature of the R100 programme, we are not working to the UK Government’s target of connecting all UK premises to a full-fibre network by 2033. That would be far too long for us to wait, so we have stepped in, in an area that is wholly reserved to the UK Government, in order to ensure that Scotland has the right digital connectivity. The R100 programme is important to our rural communities and to our economy in ensuring that the country has the right digital connectivity. We will certainly not wait until 2033, which is the timeline that the UK Government has set out. The R100 programme is very ambitious.

Unfortunately, we are out of time. I thank the cabinet secretary and his officials for their evidence.

Normally, I would suspend the meeting at this point, but given that we are pushed for time, I will move straight on to agenda item 3, so I would appreciate it if the cabinet secretary and his officials could leave quietly.