Meeting of the Parliament

Meeting date: Thursday, November 1, 2018

Official Report 1333KB pdf

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Aberdeen Western Peripheral Route

The next item of business is a statement by Michael Matheson on the Aberdeen western peripheral route. The cabinet secretary will take questions at the end of his statement, so there should be no interventions or interruptions.

15:00  

I welcome the opportunity to update Parliament on the Aberdeen western peripheral route, which is the most extensive road construction project in the United Kingdom. I am proud that this Scottish Government is delivering this long-awaited project, working with our partners in Aberdeen City Council and Aberdeenshire Council. It is expected to generate more than £6 billion in additional income for the north-east of Scotland and create more than 14,000 jobs in its first 30 years of operation. It will boost the economy, increase business and tourism opportunities, improve safety and cut congestion as well as improve opportunities for public transport facilities.

The bypass was first proposed in the late 1940s, and it took until 2007 for this Government to progress the project in a meaningful way. After one of the longest public local inquiries that has ever been held in Scotland, legal challenges that were submitted in May 2010 and subsequent appeals, the AWPR contract was awarded in December 2014 to Aberdeen Roads Ltd, or ARL—a joint venture comprising Balfour Beatty, Carillion and Galliford Try.

As construction progressed, the contractor cited delays that were attributable to factors that included the cumulative effects of weather events and the well-publicised collapse of Carillion. On 22 March this year, my predecessor, Keith Brown, made a statement to Parliament advising of the potential for a late autumn 2018 opening, despite assurances from the contractor that its target was to open the project by August 2018. Contractors are often ambitious with their targets in order to motivate and challenge the workforce but, as events transpired, our more cautious view has proved correct.

We have worked tirelessly with the contractor to establish further measures not only to ensure that the project is delivered at the earliest opportunity, but to identify whether sections of the new road could be opened in advance. The sections that have already opened to traffic include the Craibstone to Dyce junction section, the 7km section between Blackdog and Parkhill and the 12km section between Balmedie and Tipperty. Drivers are already enjoying significant benefits as a result of those improvements.

In May, ARL reported a technical issue on the Don crossing structure. Minor defects were identified while the contractor was post-tensioning a small number of concrete panels. The defects subsequently proved to be more extensive than was originally anticipated, albeit that they are in a localised area of the structure. Repairs have continued alongside construction work, with ARL reporting that it remained on target for a late autumn opening.

However, last Friday—on 26 October—Transport Scotland was informed that a greater scope of work would be necessary to repair the defects. The contractor has undertaken a full investigation of the defects that has been the subject of rigorous independent challenge. The contractor is working hard to repair the defects, and on Monday this week it reported that it was targeting a December opening date for the whole road.

However, the contractor was unable to provide a definitive date for the opening of the Don crossing section. A number of factors could influence the date, including technical issues and other physical factors such as the weather. We will continue to work closely with ARL to ensure that everything that can reasonably be done is being done, and we will provide a definitive date for the opening of the section as soon as possible. Safety remains our top priority, and there has not been, and will not be, a risk to public safety or the safety of the men and women working on the project.

Although the issues reported require time to remedy, it is important to recognise that they were found because of the rigorous quality control and design checks that have been built into the project.

It is also important to note that the costs of the repairs lie with ARL and will not impact on the public purse. ARL receives payment only on sections of the road that are open to traffic.

Our primary responsibility must be to ensure that the works are completed safely and to the required quality standards, and the Don crossing section will not open until Transport Scotland officials and I have confidence that that is the case. I believe that Parliament, and the public as a whole, will understand and support that position.

For some months, Transport Scotland has been working with the contractor to investigate the potential of opening the 31.5km section from Craibstone to Stonehaven and Charleston. In order to do that, a variation will be required to the original contract. Earlier this week, I spoke to Peter Truscott, chief executive of Galliford Try, to receive an update on the progress that the contractor was making in discussing that variation with its lenders. Mr Truscott confirmed ARL’s commitment to the project and offered assurances that it is doing everything possible, with the right level of resources, to open the road at the earliest opportunity. The clear indication from Mr Truscott was that ARL was making the necessary changes to the AWPR contract to open the section.

Having received those assurances, I was disappointed to receive a letter from Mr Truscott yesterday morning that cast yet more doubt on that mutually beneficial solution. The letter suggests that ARL has yet to agree to open that section of road; furthermore, apparently it has yet even to advise its lenders of the draft terms that have been on the table for a considerable time, despite verbal assurances to the contrary on Monday. Such inconsistency is frustrating efforts to progress the opening of the Craibstone to Stonehaven and Charleston section, as the lenders’ agreement is required to take it forward.

In agreeing to that substantial change to the contract, the Scottish Government has a duty to protect the public interest. The Government must maintain a balance between opening sections of the road and releasing appropriate payment to the contractor at a time when it is dealing with the financial pressures of an overrunning project while retaining the right level of incentive to finish the job.

In addition, inaccurate rumours have been circulating in the north-east media that that section of road has been ready to open for some time. Despite daily discussions to progress its opening, Mr Truscott’s letter confirms that no contractual mechanism is in place to allow that to happen. I have been urging the contractor to conclude those deliberations for some time. I repeated that to Mr Truscott on Monday and have reiterated it in writing today. It is now time for the contractor to stop deliberating and start acting. It must now take the necessary steps to open the majority of the road and let the people of the north-east enjoy the benefits that they have been so patiently anticipating. I have therefore asked for unequivocal confirmation that the agreement is being progressed, and for confirmation of when it will be concluded.

Transport Scotland has been accused of a lack of transparency over opening dates. As has been made clear repeatedly, Transport Scotland can advise on the expected opening date only when ARL reports that the road is ready, which was expected, until very recently, to be late autumn. It has been impossible to be any more specific while the remedial works at the Don crossing were on-going and in the absence of ARL’s agreement to open further sections.

It is a matter of public record that ARL has advanced a commercial claim in relation to the project, but the claim is not related to the current issues at the Don crossing or to opening sections of the road.

I fully appreciate that the project has been challenging for ARL, not least due to the collapse of its delivery partner Carillion. It is well known that that has presented commercial pressures for the contractor. There is a truly exceptional infrastructure project waiting to be used by the people and businesses of the north-east and, clearly, that needs to remain the single focus of all parties until the project opens to traffic. Transport Scotland will continue to work positively with ARL towards a prompt resolution to the current technical issues.

I am fully aware of the eagerness with which the people of the north-east are waiting for their new road, which will be nothing short of transformative for the economy and the community as a whole. I trust that what I have set out today will leave no one in any doubt of the efforts that are being made to open to road traffic further sections of the AWPR as fully as possible, when possible. Those efforts will continue while the matters are considered with ARL.

Thank you. We have about 20 minutes to allow for questions. I ask members to be concise, because a lot of members want to ask questions.

I thank the cabinet secretary for advance sight of his statement.

I appreciate that the cabinet secretary has been in his job only a very short time and that he has no history in the area, so let me remind him that the Scottish National Party said first that the AWPR would be open in the winter of 2017-18; then it said that it would open in March 2018; and then we were told in this year’s programme for government that it would open in late autumn 2018. Now, we are told—again, at the eleventh hour—that there are further delays. The cabinet secretary cannot provide the people of the north-east with a firm opening date.

Today’s statement lists various structural, contractual and communication problems that make clear that the cabinet secretary’s latest teaser that the road might open in December is clearly never going to happen. Decent businesses would have predicted such issues and delays months ago and made provision. It is a disgrace that the Scottish Government has failed to do so, but that is all too predictable, given that the Government blames everybody except itself.

Given that one would assume that the cabinet secretary has interrogated the contractor about the bridge delays, the contract delays and the alleged lack of communication, what is a realistic timescale for the road to open in full? Furthermore, according to the statement, the whole project is characterised by a loss of control between ARL, Transport Scotland and the cabinet secretary. People will feel that the Scottish Government has lost its grip on the process. Are they wrong?

The answer to Liam Kerr’s final point is that the Government has not lost its grip on the process. It is a bit rich for Conservative Party members to give lectures, given that, over decades, the UK Government failed to deliver the Aberdeen western peripheral route. I will take absolutely no lectures from the Conservatives about delivering infrastructure in this country, particularly in the north-east of Scotland.

Liam Kerr says that we should have anticipated the problems. The reality is that when dealing with such a project—the road is some 58km long and has more than 100 different structures on it—it is difficult to anticipate every technical issue that might arise. It is a major infrastructure project, and there will always be challenges and technical issues with major infrastructure projects.

Liam Kerr will be well aware of the reasons for the delays. One reason is weather events, which have had a significant impact on the contractor. Another reason relates to the time that it has taken for other agencies to move some of the utilities that were needed for the work to be carried out. The most recent delays have been caused by a technical issue with bridge at the River Don.

The opening up of the section that could be opened needs to be agreed with the contractor through a contract variation. That contract variation has been on the table for the contractor to agree to for a considerable period of time. That is why it is now time for the contractor to agree to it. That will allow the section of the road that can be opened to be opened to traffic as soon as possible while making sure that the contractor makes progress on the technical issues on the bridge over the River Don in a way that ensures the safety and quality of the work. That is what is happening at the moment.

I thank the cabinet secretary for providing advance sight of his statement.

It was 2003 when the then First Minister, Jack McConnell, announced plans for an Aberdeen western peripheral route. Sixteen years later, it is just not good enough that the transport secretary cannot give Parliament a firm date for the opening of the road; all that he has been able to say is that the latest promise of late autumn 2018 is now worthless.

In his statement, the cabinet secretary said that there are technical issues on the Don crossing. The Government previously reported that those were minor, but today the cabinet secretary said that they are “extensive”. What guarantees can he give that those extensive defects will be repaired by December? Are any of the defects similar to those that were identified when the Queensferry crossing was built? In other words, has there been a fundamental problem with the pouring of the concrete? Do we have details on what the defects are?

The cabinet secretary said that there are contractual problems with the opening of the 31.5km section from Craibstone to Stonehaven and Charleston. Of course, contracts are a two-way process. What lessons has the Government learned from the contractual arrangements that have been used for the AWPR to ensure that the lack of flexibility that is evident is not repeated on future projects? This is not the first major transport project that has been late on the SNP Government’s watch, nor will it be the last.

I understand—

I am sorry, but you have had a minute—could you conclude?

I understand that the final cost to the public purse will not increase, but can the cabinet secretary tell Parliament what the final cost of building the AWPR will be?

I will deal with each of the issues that Colin Smyth raised in turn.

More detailed remedial action will need to be undertaken to deal with the defects in the River Don bridge—that is what ARL reported to Transport Scotland last Friday. In Transport Scotland, we have technical advisers who have oversight of the work to make sure that it is carried out to the proper standards.

With regard to the member’s point about the contract, this type of contract has been used for the effective delivery of other roads in the past, including the M8/M73/M74 bundle and the M80 Haggs to Stepps bypass in my constituency. There is a way in which the matter can be dealt with: through a variation to the contract. That offer has been on the table for a considerable period, and it is for the contractor to agree that with its lenders so that the section in question can be opened. I have called on the contractor to make sure that it does that as quickly as possible.

Mr Smyth made some points about how we manage such contracts. Transport Scotland has a very good track record on the delivery of complex infrastructure projects. That is evident from Audit Scotland’s recent report on the Queensferry crossing and the way in which that project was handled. Transport Scotland is taking the same approach with the AWPR to make sure that the best quality is delivered and the highest standards are met so that the road will serve the people of the north-east in the years ahead.

Mr Smyth can be assured of one thing: I will continue to put pressure on the contractor to open the section of the road that can be opened and to get the necessary agreement with its lenders sooner rather than later. We have been trying to pursue that issue with the contractor for a considerable period.

Eleven members want to ask questions and we have 11 minutes available, so I want people to be concise and fair to their colleagues.

The cabinet secretary has heard the calls for the AWPR to be opened as soon as possible, or at least those parts of the route that appear to be finished. Although I have not been around since the 1940s, I have been waiting for the road all my life, and it has taken an SNP Government to construct it. Therefore, I am prepared to wait for a few more months for this major construction project to be fully completed.

What can the Scottish Government do to ensure that ARL gets agreement from its financial backers to open parts of the route as soon as possible, which I understand is where the blockage might lie?

It is unfortunate that there have been technical issues with the Don crossing. I give all members an assurance that the contractor, along with Transport Scotland, is working hard to resolve those issues as soon as possible.

As I mentioned in my statement, I spoke to the chief executive of Galliford Try, Peter Truscott, earlier this week to ensure that the section of the road that could be opened is opened as quickly as possible and that progress is being made with their lenders for that purpose. I was disappointed to get a letter from him some 48 hours later saying that Galliford Try had yet to put the matter to its lenders—despite what Peter Truscott told me on Monday and the work that was taken forward by Transport Scotland over a period to get that agreement.

I am now seeking a meeting with the board of ARL to look at what further action it can take, so that we move from deliberations about the matter to action to get that particular section of the road completed, and to ensure that it is doing everything possible to address the defects that it has identified on the Don crossing.

The minister will be aware that the Stagecoach group has already postponed a planned bus route linking rural north-east communities to Aberdeen airport using the AWPR. Every day that the road remains closed costs the north-east economy huge sums of money. Given the shambolic delivery of the road, how can any business make long-term plans? Will the minister apologise to the business community for the extra costs and disruption caused by these continuous delays?

The member’s view is that costs are incurred by the north-east economy every day by the road not opening—just think what would have happened had the Conservative Government acted decades ago to build the bypass to support the north-east economy.

When it comes to the north-east economy, all the Conservatives are interested in doing is draining money out of it and into the London Exchequer, rather than investing it into the north-east economy. I will take no lectures from the north-east Tories on doing the right thing by the north-east economy and investing in it. I assure the member that we are doing everything possible to make sure that the contractor agrees to the contact variation, so that we can open up as soon as possible the bit of the road that could be opened up to traffic.

I hope that the member, who gives the impression that he is committed to north-east Scotland, will get behind the Scottish Government in making sure that the contractors, rather than deliberating about it, commit to action to get the road opened as soon as possible.

I welcome the rigorous checking of the Don crossing, which revealed that it is not currently fit for purpose. Opening a duff bridge would not have been a good idea under any circumstances.

In the light of Liam Kerr’s demands for a contingency plan, has the cabinet secretary had any communication from the Conservatives that suggests, as Liam Kerr seemed to, that we should be opening the bridge when it is not yet safe?

I am not aware of having received anything from Liam Kerr on this matter in particular. However, if he has a particular plan, I would be more than interested to hear it.

One thing that Mr Kerr can be absolutely assured of is that we will not risk people’s safety with regard to the work that is being carried out at the bridge. We will ensure that that is carried out to the highest quality in a timely fashion. We are working with the contractor to ensure that that is the case and that the bridge will serve the community in the decades ahead.

We will not get into setting an arbitrary date that could compromise that work being carried out. I know that members might want us to set a date now, but the contractors are clear that, given the technical nature of the work, they cannot give a specific date, because a key part of the work is weather sensitive. Had that remedial work not been necessary, we would not be in this position.

As I have said, once a specific date has been provided by the contractor, we will be in a position to tell people what that date will be.

The cabinet secretary appears to have confirmed that the section of the road south of Craibstone is physically finished and that the only obstacle to opening that section is the contractual dispute between the Government and the contractor. If the contract is structured in such a way that he cannot compel the contractor to move forward with the opening of the section, what incentives and penalties can he apply to produce that result, and what arbitration mechanism exists in the contract to allow him to force the issue?

As I mentioned earlier, the contract is of a style that has previously been used for the delivery of major road infrastructure projects. Mr Macdonald raises a reasonable issue. If, after the opening of the AWPR, we can learn lessons about how we draft such contracts in the future so as to address the type of issue that we have identified with it, then, clearly, we should do that.

However, there is a solution, which is a variation to the contract. That has been on the table with the contractor for a considerable time. The contractor has to get agreement from its lenders to allow such a variation to the contract to be applied. There is nothing to prevent the contractor from doing that now, as was confirmed in the call that I had with Galliford Try’s chief executive on Monday, when I was left with the clear impression that the matter was with its lenders. Some 48 hours later, I received a letter saying that it was not yet with its lenders. That is simply unacceptable. It should be able to put that to its lenders to get that bit of the road open. The contract is not one that prevents that from happening; there is a mechanism that would allow it to happen through a variation, which is why we want the contractor to move on that sooner rather than later. I hope that all members of the Scottish Parliament who represent the north-east will be very clear in saying to the contractor that it should put that to its lenders, to allow the section of the road that could be opened up to be opened sooner rather than later.

The minister is guilty of continuing to mislead the public with this statement. Does he accept that the section of the road from Stonehaven to Westhill is physically ready and waiting to be opened? It is the Scottish Government that has mishandled the contract with regard to opening sections of the road when they are ready. When will he take responsibility for that and stop blaming the contractors, the weather, public safety and anybody but the Scottish Government for messing up the contract in the first place?

Mr Rumbles rarely rises to the occasion, and this is yet another example of that. A so-called north-east MSP, he wants us to ignore issues of public safety in relation to those matters. I think that his behaviour and comments on those matters are utterly irresponsible. Rather than come in here and try to suggest that I am misleading anyone, the member should reflect on his own comments.

Excuse me, cabinet secretary. Sorry—please sit down.

Mike Rumbles rose—

Mr Rumbles, is this a point of order?

It is a point of order.

Really? Let me find out.

It is my opinion that the code of conduct is being broken here.

It is my opinion that counts—I am sorry, Mr Rumbles.

Indeed it is, but I must be able to make the point to you, Presiding Officer.

No—this is not a debate, Mr Rumbles. Please sit down.

It is a point of order.

It is a robust exchange, in my view. Please sit down.

Can I not make a point of order?

Please sit down. I have ruled on the matter.

Cabinet secretary, please continue.

Presiding Officer, I suspect that Mr Rumbles does not want to accept the fact that we are in a situation in which the section of the road that is complete and could be opened requires a contract variation.

It is your contract.

No—it is a contract between the Scottish Government and ARL. However, the reality is that ARL has to agree to the variation in the contract. To date, it has not put that to its lenders.

I know that Mr Rumbles often gets things wrong. He has just demonstrated that—yet again—and he is letting down the people of the north-east. However, he can be assured of one thing: given his own party’s track record in the Scottish Executive on delivering for the people of the north-east, we will take no lessons from Liberal Democrats on such matters.

I welcome and support the cabinet secretary’s efforts to get the Craibstone to Stonehaven section open as soon as possible. He will be aware that if that opens prior to the Don bridge being finished, traffic wishing to connect northbound from Craibstone or southbound from Parkhill will have to divert through Kirkhill, Pitmedden or Wellheads industrial estates, and potentially Dyce village as well. I ask that he takes steps now to liaise with local authority transport officials to ensure that appropriate traffic management is in place so that residents and businesses are not disrupted as a consequence of any traffic movements that take place as a result.

The member raises an important point. If the section opens, temporary traffic management measures will have to be put in place at a number of points. Transport Scotland has already undertaken work with local partners to identify what traffic management arrangements would have to be put in place. One of the matters on which I have also sought assurance is that the necessary plans will be put in place as quickly as possible, so that there is no undue delay to the opening of the section that could be opened at the present time.

The member raises an important point on behalf of his constituents, and I know that Transport Scotland has already given consideration to the issue, to make sure that the interim traffic management arrangements are appropriate to deal with any additional traffic.

I call John Mason, and I will take Alexander Burnett if you are both brief.

In his statement, the cabinet secretary said:

“the costs of the repairs lie with ARL and will not impact on the public purse”.

Later, he said:

“It is a matter of public record that ARL has advanced a commercial claim in relation to the project”.

Will he explain how those two issues tie together?

Cabinet secretary, could you also be brief, please?

The cost of the Aberdeen western peripheral route package is £745 million. That continues to be the case—the remedial work on, for example, the River Don crossing must be carried out within the contract. The cost of that is borne by the contractors, given the additional work that they have to undertake.

As is often the case with major infrastructure projects, there will be additional costs that contractors may not have foreseen as a part of the work that they are undertaking. Contractors can incur additional costs that are associated with things such as the weather or ground conditions that were not identified at an earlier stage.

The commercial claim relates to additional costs that the contractors have incurred as a result of unidentified factors arising during the construction phase. As I say, such costs are often the case with many major infrastructure projects and the AWPR is no different. The commercial claim will be dealt with in the same way that such claims are normally dealt with through the different parties, as has been the case with other major infrastructure projects.

Mr Burnett, you must be brief, as we are going into the time for the next debate.

Why are my constituents still contacting me about the impact of the AWPR on their land and homes? Matters that have been brought to the contractors’ attention many months ago are still not being acted on.

Although the cabinet secretary cannot offer any progress on the opening, will he at least reassure my constituents that progress will be made on defective works and compensation claims?

Compensation claims must go through normal due process and will have to be considered by the parties who are involved in lodging any claim and considering any payment.

If the member can identify specific areas where there has been a lack of progress by ARL in carrying out remedial work in relation to individuals’ land, I would be more than happy for him to write to me with that information and we will ensure that that is brought to the attention of the ARL board to take action on the matter.

That concludes questions. I apologise to Gail Ross, Jenny Marra and Tom Arthur, whom I failed to reach.

On a point of order, Presiding Officer. Do you believe that paragraph 5 of section 7 of the code of conduct has been breached during this statement? I ask that you look at the Official Report and let me know, please, whether, in your view, the code of conduct has been breached.

I am happy to do so Mr Rumbles—I just do not want to eat into the next debate. I will do that, and we will report back to you.