Tuesday 4 November 2003
(Morning Session)

 

Rt Hon The Lord Fraser of Carmyllie QC opened the hearing at 10.00 am.

 

1.      Mr Campbell QC:  Before we start with Mr Alastair Wyllie, who is my next witness to be followed by Mr Robert Gordon, I wonder if I may make some observations and submissions to you in relation to issues of reporting.

 

2.      The weekend press has reported statements by parliamentarians and others ascribing personal blame for what is variously described as a fiasco and other less complimentary descriptions to a number of people, including civil servants, for a series of miscellaneous ills which have befallen the Holyrood project.  Sir, some of this criticism has been levelled at individual civil servants; some of it has stated, quite wrongly, that the Inquiry is biased or has already determined its own outcome.

 

3.      Sir, may I reiterate what I said in opening this Inquiry?  The process of this investigation is only just beginning.  And just to remind people we have only had two and a half days of evidence.  I spoke to you in opening of “stepping stones to the truth.”  It would appear that in some people’s minds they appear to have found the truth already.  Can I underline that it is the job of the Inquiry, and not, with the greatest of respect, the press nor present or former Members of the Scottish Parliament or any other more or less well qualified observers to reach informed conclusions based on hard evidence?  By no stretch of the imagination, no matter how fevered or exaggerated that imagination is, can the work of the Inquiry be said to have reached any conclusion or even any interim conclusion.  The work, I am sorry to say, Sir, will take some months yet.  I ask through you, Sir, observers of this process, even those with the very best of intentions, to please stick to the facts and not to invent the conclusions they would like to see.

 

4.      Because I announced that I was proposing to take matters chronologically and because many controversial issues were decided early on in the project, it is inevitable that some of the early material will cause recollections to be stirred.  It is also inevitable that opinions may be expressed outside the Inquiry by those giving evidence.  In my respectful view they should not be reported as facts, but should be reported as opinions.  However, when they are reported as conclusions based on the evidence of people who have not yet given evidence, I can only say to you that they appear to me to be designed to hamper the Inquiry process.

 

5.      I need to say a word to you also, Sir, about the position of civil servants.  I ask you to join me in disapproving of the ascribing of responsibility for anything to individual civil servants at the moment; by the terms of their employment they cannot reply.  I should like to place on record that both senior and junior civil servants — and many other witnesses — have come forward voluntarily and speedily in response to the Inquiry’s request for co-operation.  However, civil servants are not able to reply to public criticism in the newspapers.  Now, I have no reason to protect civil servants any more than any other witness, but I do not wish any person who has sought to co-operate with this investigation to be pilloried for no reason, especially when he or she is unable to answer back.  I should place on record that the Civil Service — in sharp distinction to others — has voluntarily made available to me a number of videos of both public and non-public occasions connected with the Holyrood project.  Some of these I have had time to inspect along with a member of the team, and I may decide that they are of relevance to your work.

 

6.      In my opinion, Sir, it is much to be regretted that those in positions of prominence feel that they are able, without having heard all of the evidence so far never mind all of the evidence in the case, to come forward and make doom-laden pronouncements, ascribing fault and/or blame at the foot of people who have not yet even had a chance to give their evidence.  In my opinion, Sir, this is irresponsible, just as it is irresponsible of newspapers to print headline-grabbing statements.  Sir, I hope you might feel able to say something which will encourage this practice to stop and join me in disapproving of premature and knowingly unsafe conclusions being reached in public by, with respect, those who ought to know better.

 

7.      Sir, before you respond I think my learned friend Laura Dunlop, who is here representing the Scottish Executive, may have something to add to that statement and of course I have no objection to her being asked to do so.

 

8.      Ms Laura Dunlop:  Sir, I am obliged.  The concern of the Scottish Executive relates particularly to concerns that they have about comments naming individual civil servants.  You are aware, Sir, that Saturday’s ‘Scotsman’ newspaper, yesterday’s ‘Herald’, and a television programme on Sunday all reported comments which criticise named civil servants.  The name of one of the civil servants seems to be a jumble of several people, but the other two do exist and are expected to give evidence later in this Inquiry.  The comments made about them, despite being expressed in categorical terms, are wholly speculative.  It is suggested that these individuals are to blame in relation to matters which have not yet come before the Inquiry and upon which the Inquiry may in due course require to report.

 

9.      Furthermore, in common with Mr Campbell I wish to emphasise that these comments, in making allegations against named civil servants, attack people who are not in a position to make any public response.  The Scottish Executive, therefore, calls for restraint by those who choose to comment, particularly in relation to matters on which no evidence has yet been laid and in relation to witnesses who have yet to speak.

 

10.  Lord Fraser:  Thank you, Ms Dunlop, and thank you, Mr Campbell.  I think it would be appreciated by both of you and by those who have been reporting this Inquiry that none of my powers attract the Contempt of Court Act 1981, and in such circumstances it is legitimate for those who wish to comment on the evidence to do so.  I have no power that would allow me to restrain that.  But I do share your concerns that comment, where there has been actual evidence delivered, should be limited and it would certainly seem to me to be inappropriate to comment on evidence that has yet to be given because for all we know the evidence might be markedly different.

 

11.  Mr Campbell, there is one point I do wish to emphasise, and I think you will be aware of this:  I read some comment that I had already come to conclusions on this matter.  As you point out, we have only had two and a half days of evidence and I expect there will be a considerable number of additional days.  I have reached no conclusions, interim or otherwise. As you pointed out at the outset and I pointed out at the preliminary hearing, what we are engaged in now is a rather lengthy search to establish just exactly what it was that took place over the whole time of the building of the new Scottish Parliamentary Building.  And only at the end of that, when all the evidence has been heard and aired thoroughly, will I be in a position, primarily on my own but with I hope some support of others on my team, to come to a conclusion. 

 

12.  I do strongly emphasise at this stage that I have reached no conclusions and it would be quite improper for me to have done so.  Thank you.

 

13.  Mr Campbell QC:  Sir, thank you.  Unless my learned friend has any other preliminary matters or you do, Sir, I wonder if I might proceed with my first witness today.

 

14.  Sir, the Inquiry’s first witness today is Mr Alastair Wyllie.  Mr Wyllie, good morning.

 

15.  Mr Alastair Wyllie:  Good morning.

 

16.  Mr Campbell QC:  Thank you for attending the Inquiry in response to the request of the Secretary. 

 

17.  Mr Wyllie, can I just ask you to confirm that you are Alastair James Wyllie; that you work at the Scottish Executive currently as the Chief Quantity Surveyor and Head of the Building Division, which is part of what is now called the Scottish Procurement Directorate within the Finance and Central Services Department?

 

18.  Mr Wyllie:  That is correct, yes.

 

19.  Mr Campbell QC:  Can you tell me to whom you report, please? 

 

20.  Mr Wyllie:  I presently report to the Director of Procurement.

 

21.  Mr Campbell QC:  Has he always been called the Director of Procurement?

 

22.  Mr Wyllie:  He has for quite some time, yes.

 

23.  Mr Campbell QC:  Can you say how long?

 

24.  Mr Wyllie:  I could not tell you precisely, but for a number of years.  I have only come under his line management within the last six months or so.

 

25.  Mr Campbell QC:  Can I establish whether there was a Director of Procurement in 1997-98?

 

26.  Mr Wyllie:  There was a Director of Procurement, yes.

 

27.  Mr Campbell QC:  Mr Wyllie, you have professional qualifications.  Can you tell me what they are please?

 

28.  Mr Wyllie:  I am a Chartered Quantity Surveyor, a graduate from Heriot-Watt University and I qualified as a member of the Royal Institution of Chartered Surveyors in 1973.

 

29.  Mr Campbell QC:  And is that by examination?

 

30.  Mr Wyllie:  That was by examination, yes.

 

31.  Mr Campbell QC:  And do you presently hold the status of a member of that institution?

 

32.  Mr Wyllie:  I am a member of the Royal Institution of Chartered Surveyors, yes.

 

33.  Mr Campbell QC:  I think, my notes tell me at least, that you have worked in the public service, in the Scottish Office since 1975.  Is that correct?

 

34.  Mr Wyllie:  That is correct, yes.

 

35.  Mr Campbell QC:  You worked on ancient monument projects, prison projects, within the Construction Industry Branch, within the Housing Division until 1992 when you became Chief Quantity Surveyor?

 

36.  Mr Wyllie:  Yes, that is correct.

 

37.  Mr Campbell QC:  How big is your team, Mr Wyllie?

 

38.  Mr Wyllie:  My total team is round about 11 or 12, and that includes a few admin/clerical staff.  In terms of professional staff I presently have eight working for me.

 

39.  Mr Campbell QC:  Now, do correct me if I am wrong, but I would imagine that for all the construction work with which the Scottish Office is concerned that your team does not work as hands-on quantity surveyors in relation to individual building projects.

 

40.  Mr Wyllie:  Absolutely not, no.

 

41.  Mr Campbell QC:  Could you tell us then what the scope of your work is in the post that you presently occupy?

 

42.  Mr Wyllie:  The scope of our work is largely to provide professional and technical advice to a wide range of client organisations across the Executive, both those who have responsibility for spending programmes and individual projects and also those who have policy responsibilities where there are capital projects likely to be involved.

 

43.  Mr Campbell QC:  Such as building a new Parliament?

 

44.  Mr Wyllie:  Not necessarily, no.  Primarily dealing with areas like housing, schools, education; to some extent we advise sponsoring divisions who have responsibilities for outside public bodies.

 

45.  Mr Campbell QC:  You talked about client Departments.  Does that mean Departments within the Scottish Executive who you treat as your clients when they come to you for advice?

 

46.  Mr Wyllie:  Yes.  Well, we refer to them as clients or customers, but essentially Divisions or Departments of the Executive who have a need for professional or technical advice in some of their work.

 

47.  Mr Campbell QC: So, if I can take a random example.  If the Prisons Department wants to build a new prison, is it likely that they are going to come to you for professional advice?

 

48.  Mr Wyllie:  No, that is highly unlikely because the Prisons is now an Executive Agency, and while at one time the previous Building Directorate did have responsibility across the whole of the Scottish Office’s estate and responsibilities, with the creation of Executive Agencies a number of those responsibilities moved across to the Agencies so that they manage their own projects and programmes.  They have their own building professionals there, some of whom were my colleagues originally.  So, we are not dealing with issues which are not the responsibility of Executive Agencies.

 

49.  Mr Campbell QC:  My example is obviously a bad one and I apologise for that.  But if a local authority is thinking about building a new school, perhaps Dalkeith is a good recent example, do they come to you or do they have their own expertise?

 

50.  Mr Wyllie:  They have their own expertise.  We have moved away from a situation of perhaps 20 odd years ago when there were a large number of building professionals to whom individual school and hospital projects were perhaps referred.

 

51.  Responsibility primarily is devolved to the local authorities, so we do not have a direct involvement in individual projects.  Where we do have an input in the schools programme is giving any technical or professional advice in the background, largely at a policy level, to the sponsoring division.

 

52.  Mr Campbell QC:  Is it fair to say that nowadays the application of your technical skills is confined to what you yourself have described as background advice?

 

10.15 am

 

53.  Mr Wyllie:  We have moved away from being hands-on architects, hands-on engineers, hands-on quantity surveyors to being technical and professional advisers, largely on procurement procedures and achieving value for money and how to manage programmes and projects rather that actually being hands-on and working on the projects themselves.

 

54.  Mr Campbell QC:  When did this shift take place?

 

55.  Mr Wyllie:  It has taken place over quite a number of years.  Probably over the last 15 to 20 years there has been a gradual shift of responsibility.  Initially certainly with the local authority responsibility being largely placed on their own shoulders and then gradually with the emergence of the Executive Agencies.  They  have taken responsibility for their own projects and programmes.

 

56.  Mr Campbell QC:  Another example might be Historic Scotland?

 

57.  Mr Wyllie:  Yes, indeed, that is correct.

 

58.  Mr Campbell QC:  Would it be fair to say in 1997 that the repository of procurement expertise for buildings lay in your Department?

 

59.  Mr Wyllie:  It lay partly in my Department, but equally there were others in the Executive and Executive Agencies who had procurement experience, but I was at the core of the Building Directorate which had, shall we say, a lead role for procurement policy and procedures, albeit others were perhaps responsible for actually delivering that on the ground.

 

60.  Mr Campbell QC:  Did your Department provide advice about likely costs for a Parliament building to Alistair Brown of the Department of Administrative Services in 1997?

 

61.  Mr Wyllie:  Yes, we did, round about July, I think, 1997 we were asked —

 

62.  Mr Campbell QC:  I will come to the chronology in a minute if I may.  So that came to your Department?

 

63.  Mr Wyllie:  That came from my division, my part of the Building Directorate.  Yes. 

 

64.  Mr Campbell QC:  I ought to get this right, it is right to talk about a division?

 

65.  Mr Wyllie:  It is probably better to talk about the Directorate.  The Directorate had two divisions of which I was one part, but essentially we were part of a multidisciplinary Directorate which was supporting the Director of Building.

 

66.  Mr Campbell QC:  What was the other division called?

 

67.  Mr Wyllie:  The other division dealt with building standards, building regulations.

 

68.  Mr Campbell QC:  That is work that finds its way into everyday practice for building in local authorities?

 

69.  Mr Wyllie:  That is correct, legislation and —

 

70.  Mr Campbell QC:  By the publication of subordinate legislation, building standards, fire standards, that sort of thing?

 

71.  Mr Wyllie:  Yes, that is correct, yes.

 

72.  Mr Campbell QC:  Building standards?

 

73.  Mr Wyllie:  Yes.

 

74.  Mr Campbell QC:  Fire standards, and that sort of thing?

 

75.  Mr Wyllie:  Yes.

 

76.  Mr Campbell QC:  Now in 1997, according to your CV, you were Deputy Director of Building and Chief Quantity Surveyor and reported to John Gibbons. Is that correct?

 

77.  Mr Wyllie:  That is correct, yes.

 

78.  Mr Campbell QC:  And he was the Director of Building and the Chief Architect?

 

79.  Mr Wyllie:  Yes.

 

80.  Mr Campbell QC:  OK.  Were you aware, Mr Wyllie, in June 1997, after the election and the success of the Labour Party in Scotland, of proposals moving around the Scottish Office for the publication of a White Paper?

 

81.  Mr Wyllie:  Yes, I was.

 

82.  Mr Campbell QC:  How did you become aware of that?

 

83.  Mr Wyllie:  Just through general knowledge.  In the office, we were all aware that a White Paper was being prepared; we were all aware of the political changes that were likely to be coming forward.

 

84.  Mr Campbell QC:  You were aware that it was likely to be a significant document?

 

85.  Mr Wyllie:  Oh, yes.

 

86.  Mr Campbell QC:  Were you part of a team, or head of a team, or received instructions about providing estimated costs for anything at all to do with the Parliament Building?

 

87.  Mr Wyllie:  I was asked to provide some costing information in relation to proposals following on from proposals that had come forward from Edinburgh Council, with a view to possibly redeveloping the Royal High School and St Andrew’s House.

 

88.  Mr Campbell QC:  So that I do not go over it again, because we have looked at it already, you are aware that the early drafts of the White Paper suggested that the Old Royal High School was, at least in the public mind, the site where the Parliament was likely to be.

 

89.  Mr Wyllie:  That is correct, yes.

 

90.  Mr Campbell QC:  And we have seen in early drafts that some figures were contained in those drafts initially in an Annex, which was attached to the back of the draft White Paper. Did you see that?

 

91.  Mr Wyllie:  No, I did not.  No, I had no input to the White Paper.

 

92.  Mr Campbell QC:  No.  Not even indirectly?

 

93.  Mr Wyllie:  Not that I can recall, no.

 

94.  Mr Campbell QC:  So, can we just establish then to whom the Building Division provided information?

 

95.  Mr Wyllie:  I did not provide information on the White Paper; I provided cost information to the project team, regarding cost alternatives for either developing the Royal High School and St Andrew’s House, and the options of other new buildings, either at Leith or elsewhere in Edinburgh.

 

96.  Mr Campbell QC:  Was that as early as May or June in 1997?

 

97.  Mr Wyllie:  No, I think that began in June 1997; June and July was when I became involved in that.  But that was running parallel, I think, with the White Paper.

 

98.  Mr Campbell QC:  I would just like to show you one document, and tell me if you recognise it please.  What you are going to be shown is SE/1/011, and it is an Annex to an early draft of the White Paper.  Now, it is fair if I tell you that the White Paper itself went through a large number of drafts — perhaps as many as 30, certainly 20 — and what you are being shown here is one of the Annexes, which contains, as you will see if I read it short, a range of figures between £24·5 million and £34 million. 

 

99.  Mr Wyllie:  Right.

 

100.          Mr Campbell QC:  What I would like to know is, if you recognise this format as something for which you may have had responsibility?

 

101.          Mr Wyllie:  No, I had no involvement in the compiling of that set of figures. 

 

102.          Mr Campbell QC:  Might those figures have come from your Department?

 

103.          Mr Wyllie:  They did not come from the Building Directorate, no.

 

104.          Mr Campbell QC:  They did not come from the Building Directorate?

 

105.          Mr Wyllie:  No.

 

106.          Mr Campbell QC:  Are you able to suggest where they might have come from if they did not come from the Building Directorate?

 

107.          Mr Wyllie:  Well I do know — because of my involvement in doing the subsequent costings — that there were proposals coming forward from City of Edinburgh Council.

 

108.          Mr Campbell QC:  Yes.

 

109.          Mr Wyllie:  And they had consultants onboard who had been giving them advice on possible ways of altering the Royal High School and St Andrew’s House.  So, certainly, I think, the costs in relation to the Parliament building, which I have said there — the costs of altering New Parliament House, as it was called — those costs, I am fairly sure, must have come from the work that was being done by EDI.  So far as the costs for St Andrew’s House go, I assume they either came from that same source or possibly from our own Accommodation Division people, who obviously had information about work that was necessary to St Andrew’s House.

 

110.          Mr Campbell QC:  But you are quite clear that it did not come from you as the Government’s Chief Quantity Surveyor?

 

111.          Mr Wyllie:  No, it did not come from me.

 

112.          Mr Campbell QC:  Would it not be surprising to see figures from an outside authority such as Edinburgh in a draft White Paper, without them passing by you to be checked?

 

113.          Mr Wyllie:  I cannot really comment on that because there were so many people involved at that stage, and I was not involved in every meeting or every discussion.

 

114.          Mr Campbell QC:  Did you get to see and did you look at the work that was produced by Edinburgh Council?

 

115.          Mr Wyllie:  I did, yes, I did — but not in the run-up to the preparation of the White Paper.

 

116.          Mr Campbell QC:  Did you inspect it professionally for its accuracy and soundness?

 

117.          Mr Wyllie:  I was asked to look at the plans that were provided and to comment on some of the figures that were being produced, but those were mainly in relation to costs for building a debating chamber in St Andrew’s House.

 

118.          Mr Campbell QC:  And did you do that?

 

119.          Mr Wyllie:  Well, the information we had was fairly sketchy.  We are talking about fairly basic plans, with not a lot of details.  But certainly, the information had been pulled together by professional consultants acting on behalf of City of Edinburgh Council, and as far as we could see the work was perfectly satisfactory — albeit, it was of a fairly rough and ready nature.

 

120.          Mr Campbell QC:  Yes.  You see what is puzzling me, Mr Wyllie, is this: as this White Paper evolves, this Annex changed.  And it presumably changed because the information got firmer, got better, and was inspected by someone.

 

121.          Mr Wyllie:  Yes.

 

122.          Mr Campbell QC:  You seem to be, as Head of the Building Division, the obvious person to have done that inspection work.

 

123.          Mr Wyllie:  Can I correct you?  I was not Head of the Building Division.  I am presently Head of the Building Division; I was Deputy Director of the Building Directorate. 

 

124.          Mr Campbell QC:  Thank you.  It would appear to me that the Building Directorate — in whatever manifestation — would be the obvious place to go to check on the information as it was evolving, hardening up, as the White Paper went forward.  Did that not happen, as far as you were concerned?

 

125.          Mr Wyllie:  It did not come to me; but I cannot comment on whether it went to anybody else in the Building Directorate.  But it certainly did not come to me.

 

126.          Mr Campbell QC:  Who should I ask then, to find out whether the tentative information, which I am showing you here, came to Building Division for a professional assessment?

 

127.          Mr Wyllie:  I think you would have to ask the Director of Building.

 

128.          Mr Campbell QC:  Dr Gibbons?

 

129.          Mr Wyllie:  Yes.

 

130.          Mr Campbell QC:  OK.  When you looked at the plans for the Old Royal High School and/or the Old Royal High School and St Andrew’s House taken as one, were you in a position to give advice about the accuracy of what you were being shown?  In other words, was it rough, was it somewhere in the middle or was it precise?

 

131.          Mr Wyllie:  It certainly was not precise; it was pretty rough and ready.  I think — if I can remember correctly — there were not precise floor areas set down against the Royal High School building.  There were certainly costs given of what it might cost to alter it.  But it was not related to very clear sizes — just rough floor plans.

 

132.          Mr Campbell QC:  Rough floor plans?

 

133.          Mr Wyllie:  Yes.

 

134.          Mr Campbell QC:  That makes a quantity surveyor’s job a little difficult, does it not?

 

135.          Mr Wyllie:  Well, when I say rough floor plans, I think they were reduced versions of scaled drawings — so it was possible to make some kind of estimate of the likely gross floor area by putting a scale against them.

 

136.          Mr Campbell QC:  Just tell us what the process is, will you, that you go through in order to give an indicative order of magnitude for costing something of that nature?

 

137.          Mr Wyllie:  Well for what was intended to be a fairly rough ballpark figure, you would be trying to assess what the gross floor area of the building is; and that means the area ought to be measured to the inside face of the external walls.  So essentially, you are trying to work out the length times the width, establish what the gross floor area is; and to that kind of calculation, you would expect to apply a rate per square metre, which you felt reflected an appropriate standard of repair or new build or whatever.

 

138.          Mr Campbell QC:  And how would you arrive at what you regard as an appropriate figure for the standard of repair or renovation that you are going to carry out?

 

139.          Mr Wyllie:  Well, if you are working on that kind of work, day and daily, you would have access to cost data from current projects, and you would look for appropriate cost data that was a good match.  In our case, we were not in a position to do that; we did not have hands-on data at our fingertips from live projects or from recent projects.  So in those instances you would go to price books, which are prepared for the construction industry, which give you indicative costs for a range of different types of building.

 

140.          Mr Campbell QC:  And these are indices which are constantly updated, are they?

 

141.          Mr Wyllie:  That is correct, yes.

 

142.          Mr Campbell QC:  And can one derive from them, for example, at one end of the scale, an indicative cost for a brand new build on a green field site, and, at the other end of the scale, an indicative cost for a restoration or a refurbishment?

 

143.          Mr Wyllie:  Yes.  You can get very approximate figures, but they are no more than giving you an area to look at —

 

144.          Mr Campbell QC:  A range of figures?

 

145.          Mr Wyllie:  A range of figures, yes.

 

146.          Mr Campbell QC:  And to be fair, that is what we see here is it not: a range of figures?

 

147.          Mr Wyllie:  Yes.

 

148.          Mr Campbell QC:  But not coming, so far as you know, from the Building Division?

 

149.          Mr Wyllie:  They did not come from my Division, no.

 

150.          Mr Campbell QC:  OK.

 

151.          As the White Paper evolved, Mr Wyllie, the Annex, which I have shown you, disappeared — having gone through one or two other manifestations — and became replaced by a bald statement that the likely cost of a new Parliament Building would be in the range £10 million to £40 million. 

 

152.          Mr Wyllie:  Yes

 

153.          Mr Campbell QC:  Can you help the Inquiry with any understanding of where that range of figures came from?

 

154.          Mr Wyllie:  Well, I do not know precisely where it came from; I could only speculate.

 

155.          Mr Campbell QC:  Are you prepared to do that?

 

156.          Mr Wyllie:  Well, all I can say is that the exercise I was asked to carry out was to look beyond the St Andrew’s House and Royal High School buildings, to look at two other options, which might include, for example, building on a green field site somewhere else in the city, or to perhaps build a new debating chamber down at Leith alongside the Victoria Quay building, and perhaps use the Victoria Quay building as part of a Parliament complex.  And I was primarily asked to give some very broad indicative costs for those two options, to put alongside the ones on Calton Hill/Regent Road.

 

157.          Mr Campbell QC:  Yes; and how did you approach that task?

 

158.          Mr Wyllie:  By using very broad assumptions about the likely cost required for different types of accommodation, and assuming a gross floor area that might be appropriate for a Parliament complex; and I think we came to a figure of 15,000 square metres.  I cannot remember precisely how that was arrived at, but at that stage that was considered to be round about the kind of size of complex we were talking about, so we applied appropriate rates to come to a figure for a new build.

 

10.30 am

 

159.          Mr Campbell QC:  Alongside the process that you have just been discussing with me, the Scottish Office, as it then was, was developing a building user brief for a new Parliament.

 

160.          Mr Wyllie:  That is correct.

 

161.          Mr Campbell QC:  Can I ask whether the Building Division had any input into the compilation of the building user brief?

 

162.          Mr Wyllie:  The Building Directorate did. Occasionally, that might have involved some of my staff, but it also involved other parts of the Building Directorate. They were certainly building professionals, and certainly the Director was feeding into that process.

 

163.          Mr Campbell QC:  Might it be that the building user brief would take an interested reader to an indication of the sort of floor space that might be required?

 

164.          Mr Wyllie:  I cannot honestly recall at that stage precisely what point the building user brief had reached at that stage.  It was an iterative process over a period of time, and I cannot remember precisely if at that point in time we had… I do not think we did have precise floor areas pinned down; it was still very much a developing brief.

 

165.          Mr Campbell QC:  You described it as an iterative process.

 

166.          Mr Wyllie:  Yes.

 

167.          Mr Campbell QC:  So that I can completely understand your evidence, what do you mean by that?

 

168.          Mr Wyllie:  Well, information was being gathered all the time by those who were closer to the project than I was, as to what the requirements of a Parliament complex might be, so for example, visits were being made abroad to other Parliaments which had been established throughout Europe; and that was helping to inform the process of arriving at a brief for the project.

 

169.          Mr Campbell QC: Do you know whether information from such things as visits to Parliaments overseas were being fed into the building user brief?

 

170.          Mr Wyllie:  I am fairly certain they were.

 

171.          Mr Campbell QC:  Can I ask you, in relation to proposals at Leith, were you presented with information by the Forth Ports Plc, as they now are — the Forth Ports Authority, as they were then — in relation to their proposals for a site for the new Parliament?

 

172.          Mr Wyllie: I can recall that Forth Ports were coming forward with proposals because they had land, but I think primarily I was asked to consider what it would cost to build something on the site adjacent to Victoria Quay rather than specifically to try to assess what Forth Ports’ own proposals might be. 

 

173.          Mr Campbell QC:  If Forth Ports Authority had come forward with — I hesitate to call them worked-up proposals, but certainly proposals developed to some extent, in schematic or diagrammatic form — would you have seen those for assessment?

 

174.          Mr Wyllie:  I think I am right in saying that I saw them briefly, but we were not, I do not think, asked to formally assess them.  There was no formal assessment done of them, not by me anyway.

 

175.          Mr Campbell QC:  Was there a process later on where outside architects were asked to assess candidates, on a shortlist?

 

176.          Mr Wyllie: Candidates for what?

 

177.          Mr Campbell QC:  Candidate sites for a new Parliament building.

 

178.          Mr Wyllie:  Candidate sites?  Yes.  At a later stage, design teams were brought on board, but that was some way down the line, after the choice of potential sites in Edinburgh had been narrowed down.

 

179.          Mr Campbell QC:  I will come back to this if I may.  But why was it thought necessary within the Scottish Office to put to outside assessors a job of considering the relative merits or demerits of candidate sites once the shortlist had been reduced?

 

180.          Mr Wyllie:  As I understand it, at that stage there was dialogue going on between the Scottish Office and the City of Edinburgh Council, who clearly through their development arm had information about sites which might be available or might become available; and I gather there were discussions to try and establish what might be a long list of potential sites around Edinburgh. Clearly, there were those out there in the field, so to speak, who had close knowledge of available sites and what might be suitable. That was helping to inform the process.

 

181.          Mr Campbell QC:  Once the list of candidate sites was narrowed, initially to three and then to four, as we know, I think the decision was taken — perhaps it is a little difficult to see from the papers, —but certainly in the summer of 1997 to instruct outside feasibility studies in relation to potential sites at Leith, Haymarket and the Old Royal High School.

 

182.          Mr Wyllie:  That is correct.

 

183.          Mr Campbell QC:  And outside professional teams were engaged, no doubt for a fee, to carry out those feasibility studies?

 

184.          Mr Wyllie:  Yes.

 

185.          Mr Campbell QC:  Can you tell me why it was thought necessary to proceed in that way rather than to engage the expertise in the Scottish Office — such as your own — to assess candidate sites?

 

186.          Mr Wyllie:  Well, as I have mentioned earlier, most of our staff had not been directly involved or had hands-on experience of actively designing or cost-managing projects for a few years.  We had gradually moved away from that role; and it seemed to the Scottish Office that the best way to proceed was to work up schemes for the sites and to engage experts who were carrying on that type of work as their day-to-day business, and who could advise us on the detail from a more informed position.

 

187.          Mr Campbell QC:  If we take an example, as one of the three… If we have Leith… We have Forth Ports Authority who are large landowners in that area and experienced developers at that time.

 

188.          Mr Wyllie:  Yes, indeed.

 

189.          Mr Campbell QC:  They built Victoria Quay, and it was known at the time that they wanted to build Ocean Terminal.  That is right, is it not?

 

190.          Mr Wyllie: Yes.

 

191.          Mr Campbell QC: They no doubt had their own property development people, their quantity surveyors; they were able to engage architects and all the other appropriate building professionals.  And they made a submission that the site either lying to the east or, alternatively, the north — depending on which version you look at — of Victoria Quay might be a suitable position for a new Parliament building and a block for MSPs. All of that was known to the Scottish Office.

 

192.          Mr Wyllie: Yes.

 

193.          Mr Campbell QC: Why was it decided, though, to go out to — in that case, Benson and Forsyth, architects — to assess the site, when it would appear that among you and your colleagues in the Building Directorate, you had the skills to assess the project?

 

194.          Mr Wyllie: They were looking at three sites by this time, of which Leith was one; there was also Haymarket and the Calton Hill complex.  Clearly, Forth Ports had their own agenda, and quite rightly so.  We have a responsibility to deliver value for money and make sure that public accountability is met, so there was clearly a feeling that if we were looking at all three sites, it would be better to take them all on an equal basis by bringing in outside agencies to help us arrive at potential design solutions and costs.  Now, clearly, if one of those sites belonged to a developer who had his own team on board, one could argue that that might not necessarily give you a balanced equation to look at.

 

195.          Mr Campbell QC: OK.  In the case of Haymarket, to take another example, we have a consortium of prospective developers who presented, in the same way, indicative designs, indicative costings, indicative timescales and so forth — for Haymarket.  Did you have anything to do — perhaps we can just ask this one more question and then move on from it — with the instructing of the feasibility studies?

 

196.          Mr Wyllie:  No, I did not.  No.

 

197.          Mr Campbell QC:  Do you know whether those feasibility studies encompassed only architectural questions, or whether they encompassed an examination of the likely costs of what was being proposed in each of the three cases?

 

198.          Mr Wyllie:  It covered the costs as well.  Essentially, a team — an architect and a structural engineer — was brought on board to work up a proposal that might suit each of the sites, so there were three design teams, if you like, brought on board. In addition, an independent quantity-surveying consultant was brought on board to look at all three of the proposals that came forward, to compare them and to produce costings for them.

 

199.          Mr Campbell QC: I think we know that that was Davis Langdon and Everest.

 

200.          Mr Wyllie: That is correct.

 

201.          Mr Campbell QC:  — on a direct commission from the Scottish Office.

 

202.          Mr Wyllie:  Yes.

 

203.          Mr Campbell QC:  And their report to the Scottish Office encompassed all three sites at that time?

 

204.          Mr Wyllie:  That is correct.

 

205.          Mr Campbell QC:  Did that pass across your desk?

 

206.          Mr Wyllie:  I think I am right in saying that I saw it, but we were not directly involved in commenting on it, other than being asked for our views on where the costs lay and how they compared with earlier comparisons that had been done at an earlier stage.

 

207.          Mr Campbell QC:  I am having trouble at the moment completely understanding what it is that the Building Directorate was contributing to this discussion.  You have told me several times that you either did not see a document or you were not involved in the preparation of costings.  What was the Building Directorate actually putting into the matrix to help the politicians take a decision?

 

208.          Mr Wyllie:  From my own point of view, on the cost or value for money side, there was a progressive refining of the costings. We have mentioned earlier the figures in the White Paper, which you correctly point out I did not have any direct input to; but we had involvement in the initial costings of options to sit alongside St Andrew’s House, which we initially did ourselves, as I have indicated, on a fairly broad-brush basis.  We were then asked to produce something a bit more refined, and what we have not covered is an intermediate step where we ourselves engaged a quantity-surveying consultant to come on board to help us to refine these costs a degree further.

 

209.          Mr Campbell QC:  Who was that?

 

210.          Mr Wyllie:  That was Doig and Smith, who were engaged to help us, to give us clearer figures on the three prospects of a chamber at Leith or a new build somewhere on Edinburgh or Calton Hill.  We worked on that with them and worked those up into figures, which then arrived at the figure of £35 million to £40 million as a possible cost range for a new build on a site somewhere in Edinburgh.  Now we have missed that stage out, and have now jumped onto the next stage where we got onto the three definite sites and the feasibility studies that were prepared by each of the design teams.

 

211.          Mr Campbell QC:  OK, that is helpful.  Thank you very much.  I missed that stage out on purpose because I want to get on with the evidence.  Did Doig and Smith’s work largely mirror your own, or did it tell you anything that you did not know?

 

212.          Mr Wyllie:  It mirrored our own inasmuch as they were looking at the four options on three sites that we had been looking at, but they had more robust cost information than we perhaps had access to, so it enabled us to put more accurate figures against those options.

 

213.          Mr Campbell QC:  OK.  All of this is made more difficult in the absence of a design, is it not?

 

214.          Mr Wyllie:  Absolutely, yes.  As I mentioned before, these were very much ballpark figures.  They were not precise figures, and it was making many assumptions about the potential size of accommodation and the standard of accommodation you would require.

 

215.          Mr Campbell QC:  Assumptions, though, based on some empirical evidence —

 

216.          Mr Wyllie:  Yes.

 

217.          Mr Campbell QC:  — but not in any sense on even indicative designs for the shape of the building?

 

218.          Mr Wyllie:  No.

 

219.          Mr Campbell QC:  Now, where was this information fed by Buildings Directorate when it was prepared?

 

220.          Mr Wyllie:  It was fed into the Accommodation Division and project team, and those who were preparing submissions for Ministers; so that subsequently, I think there were tables included in submissions to Ministers giving the cost attaching to the various options.  Those were partly building costs, but other associated costs as well, including the relocation of civil servants from St Andrew’s House, for example.  So there were knock-on costs as well; running costs as well as capital costs.

 

221.          Mr Campbell QC:  Mr Wyllie, when you saw the figure of £10 million to £40 million in the White Paper, were you surprised?

 

222.          Mr Wyllie:  I was surprised, yes.

 

223.          Mr Campbell QC:  Do you know where the £10 million figure came from?

 

224.          Mr Wyllie:  I do not know precisely; the only possible clue I have had subsequently is through reading other papers since the event.  Clearly, at the time the new Administration was coming in, there was information from the City of Edinburgh Council and their consultants that it might cost around — I think £8 million to £10 million is the figure I recall… in fact that is probably the figure that is here… — possibly around £10 million to refurbish the Royal High School building.  So there is a figure of £10 million.  Now whether it was that figure that was used or not, I do not know, but of course that was simply a minimum figure to refurbish the Royal High School.  There would be additional costs on top of that for refurbishing St Andrew’s House and adding whatever office accommodation was needed.  That could be the £10 million, but I have no way of knowing.  The £40 million could be explained potentially by the figure of £35 million to £40 million which we came up with for a new build.

 

225.          Mr Campbell QC:  The top of your bracket?

 

226.          Mr Wyllie:  Yes.

 

227.          Mr Campbell QC:  But £10 million was never a realistic figure for the provision of a Parliament, leaving aside all the ancillary costs?

 

228.          Mr Wyllie:  Ten million pounds was probably a perfectly reasonable figure to set aside for refurbishing the Royal High School, but that would not have given a complete Parliament complex.  There were clearly going to be other costs on top of that.

 

229.          Mr Campbell QC:  OK.  Mr Wyllie, can you say anything about the selection of the firms who were asked to carry out feasibility studies on any of the options which came forward when the shortlist was created?

 

10.45 am

 

230.          Mr Wyllie:  Design teams you are meaning?

 

231.          Mr Campbell QC:  Yes, you call them design teams; professional firms.  We know that RMJM were instructed to carry out a feasibility study on Haymarket; that Benson and Forsyth, architects, were instructed to carry out a feasibility study on the Leith site advanced by Forth Ports Authority; and we know that Page and Park, architects, were invited to carry out a feasibility study on the Royal High School/Regent Road complex.  Can you say anything about how those firms were selected for that work?

 

232.          Mr Wyllie:  I do not know.  That was not a decision taken by me.

 

233.          Mr Campbell QC:  OK.  And do you know whether that was paid work or not?

 

234.          Mr Wyllie:  Well, I assume they were paid a fee for carrying out that work, yes.

 

235.          Mr Campbell QC:  OK, thank you.  One of the things which later emerged as important was the issue of ground conditions.  Can you help the Inquiry by telling us, in making these very broad assessments, what assumptions were made in relation to ground conditions?

 

236.          Mr Wyllie:  You would need to make some kind of judgement as to the site that was being considered, whether the ground contained a lot of rock or there was likely to be old mineral workings or railway tunnels, things like that.  So you needed to have some very very rudimentary knowledge of the location of the site and what potential problems might lie underneath it, but you could do more than make a guess at that unless you had done a very very detailed ground investigation.

 

237.          Mr Campbell QC: But at that stage you wouldn’t expect to see geotechnical work, for example, and bore samples and that sort of thing?        

 

238.          Mr Wyllie:  Well, we are talking in some cases about sites that did not belong to us so clearly that was not work that, I would have thought, could be carried out.

 

239.          Mr Campbell QC: But everybody knows where the train runs, for example, between Haymarket and Waverley.

 

240.          Mr Wyllie:  Well there was certainly some information available to indicate where train tunnels might be so there was a certain amount of knowledge, but without actually being able to go in and put bore holes in the ground.

 

241.          Mr Campbell QC: OK.  Were any assumptions made about ground condition problems in arriving at the figure of £35 million to £40 million — possible problems?  What I’m trying to get to Mr Wyllie — I’m sorry it is my fault — how do you factor into providing broad estimates of cost, when it is known in general — I mean I know it, my children know it, my wife knows it —where the train runs, how do you factor that into a broad estimate of cost?

 

242.          Mr Wyllie: Well if I could take you back, the figure of £35 million to £40 million, which the Building Division had contributed, was at the stage when we were talking about a site somewhere in Edinburgh — that was not necessarily the Haymarket site, that could have been a site anywhere.  So there was not a specific site in mind, simply a ballpark figure.  Now, we do not know what the site is going to be, you do not know what ground conditions there are going to be, therefore you have to build up a figure and possibly qualify it by saying “Well that is assuming normal ground conditions”.  But if, of course, it was a site which had particular problems, whether it was asbestos or buried contaminated materials, you cannot really take that into account, you have to flag that up as an extra which would probably occur.

 

243.          Mr Campbell QC: And the same would be true of things like VAT, professional fees, any contamination, items of that kind?

 

244.          Mr Wyllie: Well, the £35 million to £40 million figure, I think we included professional fees and VAT in those figures because I think we obviously knew that those were measurable, but when it came to issues like ground conditions you could only allow so much and accept that there might be extras.

 

245.          Mr Campbell QC: In the case of Calton Hill was any assumption made about the possible need to tunnel into the rock to assist the redevelopment?

 

246.          Mr Wyllie: Yes, there was certainly the possibility of a link across Regent Road which initially, I think, was thought of being overground and subsequently was thought might be appropriate to tunnel, but that clearly was going to add an additional cost as well and certainly that was built in, as I understand it, to the costs for the St Andrew’s House/Royal High School option.

 

247.          Mr Campbell QC: Once you had done the work with Doig and Smith how were the three candidate sites ranked in terms of cost?  Can you remember?

 

248.          Mr Wyllie: I would need to refer to my notes for that.  The figures which I have from Doig and Smith suggested that the Leith complex — and this is, I think I am right in saying, including fees but excluding VAT — they came out at about £44 million for Leith and about £56 million for the Haymarket site.  The two options on Calton Hill, with or without the Royal High School building, fell in between.  So that was the sort of range of costs we are talking about at that stage when Doig and Smith were on board.

 

249.          Mr Campbell QC: OK.  Can we just relate then the conclusions of Doig and Smith to the date of publication of the White Paper?  Tell me which came first?  To help you, the White Paper was published on 24 July 1997.

 

250.          Mr Wyllie: The figures that we had from Doig and Smith were produced in August/September, mainly September, after the White Paper.

 

251.          Mr Campbell QC: So September 1997?

 

252.          Mr Wyllie: Yes.

 

253.          Mr Campbell QC: Were you ever asked, Mr Wyllie, to look again at the figures you had put forward to see whether they could be kept down or moderated in some way to something approximating to what had appeared in the White Paper?

 

254.          Mr Wyllie: Yes, I was asked to look at the figures to see how these figures could possibly be reduced to come down to a figure of £40 million and what would the implications be for the assumptions that we had made.

 

255.          Mr Campbell QC: And what did you respond?

 

256.          Mr Wyllie: My response was to the effect that there were various ways it could be done.  One clearly was to miss out all the car parking allowance which had been included but if that was regarded as sacrosanct, then other items of accommodation would have to be cut back.  I think we came to the conclusion that if all the car parking had to remain in place then you would have to cut the size of the building down to about 12,000 square metres to get the cost down to £40 million.

 

257.          Mr Campbell QC: That was from 15,000 or so square metres?

 

258.          Mr Wyllie: About 15,000, yes.

 

259.          Mr Campbell QC: Did the 15,000 square metres indicative floor area include car parking or was car parking supplementary to that?

 

260.          Mr Wyllie: Well, I should elaborate.  The 15,000 square metres was the figure which the building directorate originally used to arrive at the cost of a possible new building on a greenfield site.  When Doig and Smith came on board to do the more refined exercise, that area had gone up to 16,400 square metres and that figure did not include any car parking.

 

261.          Mr Campbell QC: You gave me a figure of £56 million for Haymarket? 

 

262.          Mr Wyllie:  That is correct.

 

263.          Mr Campbell QC: As one of the three in the league table?

 

264.          Mr Wyllie: Yes.

 

265.          Mr Campbell QC: Did that or did it not include car parking for parliamentarians and staff?

 

266.          Mr Wyllie: I do not think it included it.

 

267.          Mr Campbell QC: And did you make submissions to your boss at the time, Dr Gibbons, in relation to how the cost might be reduced from the indicative figures which you had provided?

 

268.          Mr Wyllie: Yes.

 

269.          Mr Campbell QC: In the form of minutes and so forth?

 

270.          Mr Wyllie: In the form of minutes, yes.  Brief minutes explaining how the cost could be reduced by reducing floor area or omitting parts of the brief.

 

271.          Mr Campbell QC:  OK.

 

272.          Mr Wyllie: Can I just clarify one point, Mr Campbell?  I am incorrect when I say Haymarket did not include car parking.  There was car park provision included in the three schemes which Doig and Smith, I think, subsequently costed.

 

273.          Mr Campbell QC: Thank you.  Sir, would you bear with me for just a moment, please.

 

274.          Lord Fraser: Had you thought that when you cut down to £40 million, you were going to have to reduce the floor space from 16,000 plus square metres to 12,000 square metres?  In broad terms it is a reduction of something like 25 per cent in the floor area.  Can I work it the other way and say if you were looking at 16,400 square metres, the assumption must be that the figure you would have given would have, even on an indicative basis, would have exceeded £50 million?

 

275.          Mr Wyllie: Yes, quite probably, yes.

 

276.          Lord Fraser: If you bring it down to £40 million, you have got to dock off 25 per cent which suggests to me that, if it was the size that had been indicated to you as being desirable, you were already looking — by September 1997 — at a price of  £50 million.

 

277.          Mr Wyllie: Potentially yes, if that was the size of building that was required.

 

278.          Lord Fraser: Can I just be clear?  When you were giving these figures, Mr Wyllie, you did not have any site preparation in for that because you had to make sure you were comparing like with like, so you made no assumptions about the cost of that?

 

279.          Mr Wyllie: I think there were probably just modest, standard, average assumptions about ground conditions, but the figures themselves were probably qualified to the extent that no allowance could be made for abnormal ground conditions which might arise.

 

280.          Lord Fraser: Is “fitting out” a term of art?  

 

281.          Mr Wyllie: Fitting out is another issue as well, which was not included in our figures.

 

282.          Lord Fraser: If it was £50 million can you give me any sort of ballpark figure, as you would describe it, for fitting out 16,400 square metres? 

 

283.          Mr Wyllie: Fitting out is not an area that I normally was involved with.  That was dealt with by our accommodation and estates people so they would contribute that kind of information.

 

284.          Lord Fraser: Is that carpets, desks and things like that, is it?

 

285.          Mr Wyllie: Well, essentially, yes.  Fitting out, partitioning, what have you, because more often than not you are building a shell and then you are fitting out by putting up partitioning and doors and what have you to give you the precise spaces that you would want.

 

286.          Lord Fraser: Now, can I just be clear about the position on professional fees?  When you gave a figure of £40 million — assessed as best you could at £40 million — were you including or excluding professional fees?

 

287.          Mr Wyllie: The £35 million-£40 million figure included professional fees and VAT and basic site works.

 

288.          Lord Fraser: Included?

 

289.          Mr Wyllie: Included, yes.  I think my notes may incorrectly say excluded, but in fact it was included.

 

290.          Lord Fraser: That is what I was really wanting to get at.

 

291.          Mr Wyllie: That was based on building something along the lines of the building that we have at Victoria Quay.  In other words, a fairly standard office-type building of the standard that Victoria Quay was built to.  We were saying that something of 15,000 square metres to that kind of standard could be built for about £40 million, including fees and VAT.

 

292.          Lord Fraser: I started off asking you questions about if we are dealing with an indicated size of 16,400 square metres.  That would be just above £50 million but would include all these items?

 

293.          Mr Wyllie: It might do, depending on what specific... I mean one cannot rule out the possibility there might be very abnormal ground conditions and suddenly the price would hit the roof. 

 

294.          Mr Campbell QC: Could you please turn up SE/2/837?  What I’m showing you, Mr Wyllie, is a summary of a report by Davis Langdon & Everest, quantity surveyors.  I do not think it bears a date, but on your evidence it came forward in September or October 1997, I think.  Is that right?

 

295.          Mr Wyllie: That is probably correct, yes.

 

296.          Mr Campbell QC: Can we see that they had been commissioned to provide cost estimating input on three potential sites: Leith, Haymarket and St Andrew’s House?

297.          We learn that during the currency of the appraisal a fourth site, Holyrood, was added.  They say —and they stress — that:

 

298.  “the estimated cost reflects only one solution to the challenges inherent in meeting the Brief. The estimates are not intended to be cost models for a standard solution.”

 

299.          And then we look first at Leith, costed at £59.2 million reflecting a gross floor area of 16,833 square metres. 

 

300.  “This figure takes account of the necessity to provide 250 car parking spaces and the likely ground conditions, but also of the fact that it is Forth Ports’ stated intention to provide a fully serviced site without charge to the project.”

 

301.          In other words, free ground.  Is that right?  Was that your understanding?  

 

11.00am

 

302.          Mr Wyllie: I think that is correct.  I was not directly involved in the DLE commission, but I understand that is what happened. 

 

303.          Lord Fraser:  I understood you to say to Mr Campbell that this is a document that came forward about September 1997.  Is that right? 

 

304.          Mr Campbell QC: Well, I think I put it to him.  I am not quite right about it. 

 

305.          Mr Wyllie: I am not sure about that. 

 

306.          Mr Campbell QC: A little later than that, I think. 

 

307.          Lord Fraser:  What I am a bit baffled about is —

 

308.          Mr Wyllie: The reference to Holyrood; I do not understand how that is in there if it was September.  It must have been later than that. 

 

309.          Mr Campbell QC: My fault, sir.  I beg your pardon. 

 

310.          Lord Fraser:  I am even more baffled by the provision that says:

 

311.  “All figures are set at 31 March 1998”

 

312.          by which time, I thought we were already nearly two months into a decision to select Holyrood. 

 

313.          Mr Wyllie: This must be later.  I think the trouble is there were two or three feasibility reports done by DLE.  There was an earlier one; I think this is a later version once Holyrood had come into the equation. 

 

314.          Mr Campbell QC: I am sure it is my fault and not Mr Wyllie’s fault that I have taken him to a later document. 

 

315.          Mr Wyllie, there is one other thing I would like to take from you before we leave it, leaving aside the figures for a moment, if you will just indulge me.  Can I go to the second page, SE/2/836?  You will see there, Mr Wyllie, that four options are being considered.  Lest there be confusion later on, before Holyrood emerged, were there in fact four options? 

 

316.          Mr Wyllie: No, there were three options.  Those four options refer to options for the Haymarket site. 

 

317.          Mr Campbell QC: Sorry, before Holyrood emerged, were there a multiplicity of options for the Haymarket site? 

 

318.          Mr Wyllie: I have no idea.  All I knew was that there were three sites being looked at.  I did not know the precise detail of what sub-options there might be within those. 

 

319.          Mr Campbell QC: I see.  All right.  We will hear from DLE in due course.  Mr Wyllie, could it be that this exercise projected costs ahead to March 1998 — that being a date when it was anticipated that construction might begin? 

 

320.          Mr Wyllie: I can only speculate, but I would have thought if these costs are meant to be rooted in March 1998 that they were probably done in the first quarter of 1998.  It is usual, when we are estimating, to refer your price base to a particular quarter — Q1, Q2, what have you.  So, I am assuming, by saying March 1998, they were effectively saying current prices in the first quarter of 1998, probably, but only DLE could confirm that.  But normally, you would say that the prices were current at the time of preparing the estimate. 

 

321.          Mr Campbell QC: OK.  Leaving that page and going to SE/2/837, please.  Can we see that it was part of the instructions to carry out a very rapid and broad assessment of cost for this location, that being Holyrood? 

 

322.          Mr Wyllie: Yes. 

 

323.          Mr Campbell QC: There is reference to a scheme:

 

324.  “as currently outlined totalling 20,070 square metres, including a basement for car parking and plant of 4,600 square metres.  The estimated total cost is £49·5 million.” 

 

325.          Do you see that? 

 

326.          Mr Wyllie: I see that, yes. 

 

327.          Mr Campbell QC: The scheme, it says:

 

328.  “includes the development of the basement of Queensberry House and the costs relate only to that area of the house, that is 355 square metres.  There will be other moneys required to be allocated to the general refurbishment of Queensberry House in order that the basement may be incorporated into the scheme.”

 

329.          In the conclusion, which seems to relate to all three the author says: 

 

330.  “The preferred construction period for all the locations is 24 months.  This is considered to be achievable but demanding, and there may be a cost penalty incurred as a result of fast-track construction.  The estimates do not include an allowance for such acceleration costs.”

 

331.          How is it, Mr Wyllie, in building quickly, that costs are increased?  In general, I do not mean on this site, but in general. 

 

332.          Mr Wyllie: Well, it may well be that in order to get a quick start on site you actually start building before you have completed all design work.  So, if you use a fast-track solution, what you are effectively doing is, rather than fully pre-plan and pre-design the whole building and then put it out to tender, which obviously are two processes which follow on from each other, you can do a fast-track process where you start to let early packages of work for the initial work, whether it is demolitions or foundations or what have you, while design work is still being done on later phases of the work, including finishings.  That enables you to start the project and get it completed more quickly, but you are doing so at a certain degree of risk because you do not, at the outset, know precisely what your final bill is going to be. 

 

333.          Mr Campbell QC: And how is it possible in those circumstances to have any degree of certainty at all about your overall cost outcome? 

 

334.          Mr Wyllie: Well, you are relying on your project manager and your quantity surveyor and, indeed, your design team to manage the project to a budget; to set a budget and to put a brief in place which will meet that budget and to manage it.

 

335.          Mr Campbell QC: Does that not really beg the question though, that answer? How do you know what it is going to cost you if you have not designed it before you start building? 

 

336.          Mr Wyllie: There is obviously an outline brief of some sorts here.  They know what size of area or building they are talking about.  I did not see the papers, but presumably this was set against some kind of outline proposal, some kind of outline scheme which must have given the quantity surveyor an ability to judge what would be the right cost to build something of that type on that site, which is essentially was what was done on the three earlier options, where design teams produced indicative proposals which the quantity surveyor costed. 

 

337.          Mr Campbell QC: I am sure it is my fault, but you can have an indicative design, an indicative layout, an indicative scheme, and I can understand how you would want to begin building without designing every tap and every drawer and every cupboard and every fitting — I can understand that entirely.  What I cannot understand is, you start to build but you have not designed to the end of the building itself. 

 

338.          Mr Wyllie: No, but you have a fairly clear idea of the brief; what size of building you are talking about, what type of construction it is going to be, and you have to set a brief that matches your budget. 

 

339.          Mr Campbell QC: And is it possible then, to set a budget in a situation where you have not designed through to the end of the building? 

 

340.          Mr Wyllie: It is perfectly possible to set a budget and say what is your limit of what this building is to cost and expect your design team and your professional advisers to design something that will fit your budget. 

 

341.          Mr Campbell QC: So if a budget is not set at the outset of a project, what happens? 

 

342.          Mr Wyllie: If you do not have a budget at the outset, it is very difficult to know just exactly what parameters you are working within. 

 

343.          Mr Campbell QC: Do you know what happened to the DLE figure of £50 to £55 million at March 1998 rates?  Was that fed into any estimate for Holyrood?   

 

344.          Mr Wyllie: I have no idea because I really was not involved by that stage. 

 

345.          Mr Campbell QC: I took you as far, I think, as your awareness of a report from DLE. 

 

346.          Mr Wyllie: Yes. 

 

347.          Mr Campbell QC: Were you aware of the selection of Holyrood — I think everybody was — in January 1998? 

 

348.          Mr Wyllie: Yes, but I was involved before then.  I was asked in early December 1997 to look at the initial figures which had come in from DLE, which, at that time, were for three sites, not Holyrood — Holyrood was not included at that stage.  I was merely asked to comment on the figures that DLE had produced for those three schemes on those three sites and asked just to explain why there was a difference between those and earlier estimates we had had from Doig & Smith and, indeed, through our own work earlier on.  It was simply to reconcile the differences. 

 

349.          Mr Campbell QC: Were you able to do that? 

 

350.          Mr Wyllie: We were able to establish what floor areas each of these schemes represented and compare them with our assumptions and try to identify what the differences were. 

 

351.          Mr Campbell QC: Did you feed any cost information to the Building Directorate or through the Building Directorate to Accommodation Services or the Constitution Group in relation to Holyrood before a decision was taken? 

 

352.          Mr Wyllie: No.  I saw no figures for Holyrood.  I had no input into any costs that might exist for Holyrood because my involvement with the DLE feasibility study really largely ended after I had seen the figures for the three schemes. 

 

353.          Mr Campbell QC: Did the Building Directorate continue to have involvement with the expectations and the forecasts for Holyrood? 

 

354.          Mr Wyllie: I really do not know; certainly I did not and my division did not. 

 

355.          Mr Campbell QC: Did Dr Gibbons, as far as you know? 

 

356.          Mr Wyllie: He may have done.  I am not sure if you are talking about cost input or what kind of input. 

 

357.          Mr Campbell QC: I am talking about cost input. 

 

358.          Mr Wyllie: Cost input?  I think it is unlikely that he would have been asked to contribute to issues about cost without probably coming to some of my staff for advice or support. 

 

359.          Mr Campbell QC: Do you know whether dependable cost estimates for Holyrood existed prior to Christmas 1997? 

 

360.          Mr Wyllie: I never saw anything, but I understood that when Holyrood became a late entrant into the field of options that some work was done by, I think, one of the design teams and DLE to very quickly work up some kind of proposal to see if the Holyrood site was viable, but that is purely through my understanding.  I never saw anything. 

 

361.          Mr Campbell QC: Did you have anything to do, Mr Wyllie, with the compilation of an indicative cost for Holyrood in the neighbourhood of £49·5 million? 

 

362.          Mr Wyllie: For Holyrood?  No. 

 

363.          Mr Campbell QC: I would like to show you SE/2/1079, please.  I should tell you that it is part of a minute from Mr Alastair Brown, Director of Administrative Services, to among others the Secretary of State’s Private Secretary, Mr Gordon, Dr Gibbons, Historic Scotland, Mr Grice, Mr Batho in Finance, and the Special Advisers, but not to Building Division. 

 

364.          Mr Wyllie: Not to me. 

 

365.          Mr Campbell QC: Not to Building Division. 

 

366.          Mr Wyllie: You have mentioned Dr Gibbons.  Dr Gibbons was the Director of Building in the Building Directorate. 

 

367.          Mr Campbell QC: But not to you. 

 

368.          Mr Wyllie: Not to me personally. 

 

369.          Mr Campbell QC: Miss Barr, could I go to SE/2/1072, please, first?  This is the second page of this minute that I have just described to you.  It is dated, Sir, for your notes, 12 December 1997.  Can I just read it with you in paragraph 8: 

 

370.  “The estimated building costs shown in the Annexes are drawn from work undertaken by the independent cost consultants, DLE Ltd.  The basic estimates include fitting out, that is plant and equipment, fixed furniture, casing equipment, but exclude fees and VAT.  The Annexes show these costs separately.  All of the building cost estimates exceed the original figure of £40 million included in a White Paper.  There are a number of reasons for this.  First, the White Paper estimate was drawn on the basis of a building of about 12,000 square metres before detailed information was available about the areas required for the Parliament’s use.”

 

371.          Is that in fact correct, that the earlier estimates were drawn on the basis of 12,000 square metres? 

 

11.15 am

 

372.          Mr Wyllie: I do not know what the basis of the figures in the White Paper was.  I have indicated that I produced a figure of £35 million to £40 million for a possible new build somewhere in Edinburgh based on an assumed floor area of 15,000 square metres, but that was after the White Paper had been produced, so I do not know what the basis of the floor area in the White Paper was.     

 

373.  Mr Campbell QC:  “The briefed area now stands at 16,000 square metres, an increase of about 33 per cent.  Second, it has become clear from visits to Parliament buildings since July that a particularly high quality of construction, finishes and fittings is considered appropriate for such buildings.  In early summer we allowed a cost per area figure of estimating purposes which equated to high court standard for the main public areas and the lower standard for office space, meeting rooms etc.  The designers and the cost consultants have applied a higher standard throughout the building allowing a higher specification.  This has increased overall estimates by about 10 per cent.  This will improve the presence of the building and should also reduce running costs.  But there is an up-front cost to bear.”

 

374.          And then paragraph 9 goes on to deal with car parking.

 

375.          If we could turn back now to the Annex E on SE/210/79, can we see there that Ministers were being given advice in this minute that in relation to Holyrood, site costs would be £5 million, building costs would be £49·5 million, VAT and fees £17 million, building running costs £8.3 million and the building timetable and so on and all the other factors.

 

376.          So looking at capital costs, we have £49·5 million plus £5 million plus £17 million plus… that’s all isn’t it?

 

377.          Mr Alastair Wyllie:   That is all, yes.

 

378.          Mr Campbell QC:  Yes, £49·5 million, £5 million and £17 million as at 12 December 1997.

 

379.          Mr Alastair Wyllie:  Right.

 

380.          Mr Campbell QC:  Now, did you take any part in putting those figures together for Ministers?

 

381.          Mr Alastair Wyllie:  No.

 

382.          Mr Campbell QC:  Do you know if Building Division or the Buildings Directorate did?

 

383.          Mr Alastair Wyllie:  We did not put figures together.  I was simply asked if I could explain the difference or reconcile the increases, whether it was due to increased floor area or whatever, what was the difference between those figures and the earlier figures, why could we explain it, was it to do with higher cost assumptions, higher standards, was it to do with greater floor areas.

 

384.          Mr Campbell QC:  What material did you have in front of you to enable you to make those comparisons and to produce explanations?

 

385.          Mr Alastair Wyllie:  Well, we had our earlier papers from our own work that we had done on the earliest estimates, and I think we had whatever information was available to give us details about what was in the DLE figures.  In other words, what floor areas had they used, what assumptions had they made about car park space, what have you.

 

386.          Mr Campbell QC:  Were you satisfied in relation to Holyrood that this figure was robust?

 

387.          Mr Alastair Wyllie:  I never saw the figures for Holyrood.

 

388.          Mr Campbell QC:  You only saw it for the other sites?

 

389.          Mr Alastair Wyllie:  I only saw it for the other sites, yes.

 

390.          Mr Campbell QC:  So would you bear with me for one second again?

 

391.          Lord Fraser:  Could you clarify for me as best you can, if this is not an appropriate question, if you say so.  We have got these three figures that make up the capital cost of Holyrood.  From the earlier bit, do I understand that has a small and purely indicative figure of what the cost of redoing Queensberry House would be?

 

392.          Mr Alastair Wyllie:  There was a figure of £3 million I think.

 

393.          Lord Fraser:  Which was only to do… because it seemed to tease what would need to be done in the basement and then just said “well there is more grouting work and other things that have to be done in Queensberry House”.  What I am getting at is there would appear to be, in addition to this figure of £49·5 million, £5 million for site costs and £17 million.  There is a further unknown cost that was known would be required at that… that was known that there was going to be an additional cost even if its precise quantity wasn’t known?

 

394.          Mr Alastair Wyllie:  I am not certain if that figure is meant to be contained within the £49 million or not.  That is what I am not clear about.  It could be.  It could have been included in that.  These are not my figures so I have no way of knowing.

 

395.          Lord Fraser:  Well I will not ask you then.

 

396.          Mr Campbell QC:   I think the figure you might be referring to was in the DLE summary which I showed the witness earlier.

 

397.          I was wondering if this would be a convenient moment, although it is a little early, for you to take a five minute break.  I have some papers from DLE which are upstairs which Mr Tullis has gone to look for.

 

398.          Mr Campbell QC:  We will take an informal break for five or 10 minutes.

 

399.          Mr Campbell QC:  We will resume.  Thank you for waiting. 

 

400.          Is it correct that after the location of Holyrood, as the Government moved on towards a question of selection of a designer, that you gave certain advice in relation to the procedures to be adopted for the designer competition?

 

401.          Mr Alastair Wyllie:  I had some input to that, yes.

 

402.          Mr Campbell QC:  Do you have expertise in European procurement rules, sometimes known as OJEC [Official Journal of the European Communities] rules, in relation to the placing of advertisements and the dealing with tenders for appointments of consultants?

 

403.          Mr Alastair Wyllie:  Yes, we had advised other clients in the past on how to meet the European procurement rules.

 

404.          Mr Campbell QC:  My question is whether you have expertise in these rules.

 

405.          Mr Alastair Wyllie:  I have not personally commissioned contracts myself, I have advised those who do.

 

406.          Mr Campbell QC:  No, that is not the question either.  The question is whether you have expertise in the application of these rules?

 

407.          Mr Alastair Wyllie:  I have knowledge, yes, and expertise, yes.

 

408.          Mr Campbell QC:  You have knowledge and expertise?  And some experience?

 

409.          Mr Alastair Wyllie:  Some experience, yes.

 

410.          Mr Campbell QC:  In relation to the appointment of a designer for Holyrood, were you asked to advise on the procedures which it was proposed to follow?

 

411.          Mr Alastair Wyllie:  I was not, I do not think, involved in the procedure other than that I was asked to comment on the, I think, the pre-qualification questionnaires and the European journal adverts.

 

412.          Mr Campbell QC:  So you were asked to advise on part of the procedures?

 

413.          Mr Alastair Wyllie:  Part of the procedure, yes.

 

414.          Mr Campbell QC:  Did you give that advice?

 

415.          Mr Alastair Wyllie:  Yes.

 

416.          Mr Campbell QC:  Who asked you?

 

417.          Mr Alastair Wyllie:  I was asked by the project team and those in Accommodation Division who were compiling the various pieces of material.

 

418.          Mr Campbell QC:   Who in particular?

 

419.          Mr Alastair Wyllie:  I think it was probably Bill Armstrong, the project manager.

 

420.          Mr Campbell QC:  Right.  In relation to the architect appointment, was the type of competition which was envisaged within your experience, that is to say, a designer competition?

 

421.          Mr Alastair Wyllie:  The designer competition was not something I had personally experienced, no.

 

422.          Mr Campbell QC:  Did you test the proposed rules against the OJEC rules so far as you understood them?

 

423.          Mr Alastair Wyllie:  We, as far as I can recall, had a discussion with Dr Gibbons about that.  We certainly had available guidance —

 

424.          Mr Campbell QC:  Forgive me for interrupting you.  I am really interested in what you did.  I am skipping slightly ahead of myself.  We have not discussed the designer competition so far in this Inquiry, but I am conscious that I am sure you would rather not come back.  So, I only want to deal with these matters generally so as to avoid the necessity of you coming back to fit my timetable rather than your own.

 

425.          My question was quite specific.  Did you give advice in relation to the application of European procurement rules concerning the designer competition?

 

426.          Mr Alastair Wyllie:  I may have done, I cannot honestly remember.

 

427.          Mr Campbell QC:   Right.  If you had given that advice, would it have been more likely to be oral advice to a colleague such as Dr Gibbons, or would it be minuted advice, written advice?

 

428.          Mr Alastair Wyllie:  I certainly have nothing on my records, so it was probably in discussion with Dr Gibbons or other colleagues on the team.

 

429.          Mr Campbell QC:  Right.  Can you confirm you have looked in your records?

 

430.          Mr Alastair Wyllie:  I have looked in my records, yes.

 

431.          Mr Campbell QC:  For matters relating to this type of question?

 

432.          Mr Alastair Wyllie:  Yes.

 

433.          Mr Campbell QC:  Right.  Once Señor Miralles and RMJM were appointed as architects — that was an event, I am sure you were aware, which received a lot of publicity?

 

434.          Mr Alastair Wyllie:  Yes.

 

435.          Mr Campbell QC:  And I think there were parliamentary questions about it?

 

436.          Mr Alastair Wyllie:  Yes.

 

437.          Mr Campbell QC:  Were you asked to field any of the questions or contribute to answers?

 

438.          Mr Alastair Wyllie:  I did not directly field any questions.  I think there were various parliamentary questions being asked, which were being dealt with by the project team, some of which we may have been copied into and asked for contributions where appropriate.

 

11.30 am

 

439.          Mr Campbell QC:  Yes.  Did you attend meetings with Dr Gibbons and the RICS [Royal Institution of Chartered Surveyors] or the RIAS [Royal Incorporation of Architects in Scotland] in relation to any competition for appointment of any consultant?

 

440.          Mr Alastair Wyllie:  I attended meetings with Dr Gibbons with the RICS and the RIAS.  That was largely because they wished to give their views on how the procedure might go ahead, and they were seeking reassurance as to the procedures that would be followed.

 

441.          Mr Campbell QC:  Was that the procedure in relation to the architectural appointment or to one of the other consultant appointments?

 

442.          Mr Alastair Wyllie:  Essentially, both professional bodies were offering any support or advice they could give in their own area, whether it was to do with architecture or cost matters.  They were essentially really just drawing attention to the fact that they were available to give support or advice if we wanted it.

 

443.          Mr Campbell QC:  OK.  Were you asked in particular in relation to any competition for the appointment of a Quantity Surveyor or cost construction consultant for the project?

 

444.          Mr Alastair Wyllie:  I do not recall that our discussions with the RICS got into that kind of territory.  I am aware that certainly the discussions with the RIAS concerned the appointment of a selection panel for a designer.

 

445.          Mr Campbell QC:  Now, turning to something else, Mr Wyllie, did you have familiarity at this time with extant Treasury guidelines on procurement of public buildings?

 

446.          Mr Alastair Wyllie:  Yes.

 

447.          Mr Campbell QC:  And were there separate guidelines extant in Scotland?

 

448.          Mr Alastair Wyllie:  No.  At that time, the Treasury procurement guidance applied throughout the UK.

 

449.          Mr Campbell QC:  And does that guidance give, among other things, advice on possible procurement routes for public buildings?

 

450.          Mr Alastair Wyllie:  Yes it does.  It sets out the various procurement route options and discusses the pros and cons.

 

451.          Mr Campbell QC:  And were you asked to give advice in relation to an appropriate procurement route for Holyrood?

 

452.          Mr Alastair Wyllie:  Primarily most of the advice came from, I think I am right in saying DLE had given advice, and they had certainly drawn attention to the Treasury guidance.  But I had also confirmed that that was appropriate guidance to be looking at.

 

453.          Mr Campbell QC:  Yes.  Is it possible to say what the tenor of that guidance is?  Or does it simply go right across the board of possible procurement routes?

 

454.          Mr Alastair Wyllie:  Yes.  Well, the guidance sets out a whole spectrum of different types of procurement and describes which ones are appropriate in which situations and therefore it is a useful guide to a client in trying to narrow down what are the most likely options to suit a particular set of circumstances.

 

455.          Mr Campbell QC:  And that would be documentation that you yourself would have familiarity with?

 

456.          Mr Alastair Wyllie:  Oh yes, I think most of us were familiar with the Treasury guidance.

 

457.          Mr Campbell QC:  OK.  Amongst which members of the team was or were possible procurement routes discussed to your knowledge?  I can tick off some names, perhaps Mrs Doig?

 

458.          Mr Alastair Wyllie:   Yes.

 

459.          Mr Campbell QC:  Mr Armstrong?

 

460.          Mr Alastair Wyllie:  Well certainly I recall discussing with Barbara Doig.  Bill Armstrong, possibly, yes.

 

461.          Mr Campbell QC:  Dr Gibbons?

 

462.          Mr Alastair Wyllie:  Yes.

 

463.          Mr Campbell QC:  Mr Gordon?

 

464.          Mr Alastair Wyllie:  I am not certain.

 

465.          Mr Campbell QC:  Mr Brown?

 

466.          Mr Alastair Wyllie:  Possibly, I am not certain.

 

467.          Mr Campbell QC:  Right.  Did a consensus emerge about the route that the Holyrood project was likely to take so far as procurement was concerned?

 

468.          Mr Alastair Wyllie:  Well, given the circumstances we were in and the fact that the project was likely to be commenced before there was actually a Parliament body in existence, then the options were pretty clearly narrowed down to just one or two.  A lot of the available options  were really discounted.

 

469.          Mr Campbell QC:  Yes.  Can you say what those one or two were from your recollection?

 

470.          Mr Alastair Wyllie:  The two options that were narrowed down to were construction management and management contracting.

 

471.          Mr Campbell QC:  Yes.  And for Lord Fraser’s benefit, can you try, reasonably briefly, to set out the differences as you understand them between those two routes?

 

472.          Mr Alastair Wyllie:  Well, they are both methods of procurement which enable you to bring either a management contractor or a construction manager on board, effectively as a member almost of the design team at an early stage, and it enables you to start planning and designing and building the project before all the design work is completed.  So, it effectively enables you to overlap the design with the construction and ultimately — hopefully — reduce the overall time span from beginning to end.

 

473.          The difference between them is that in the construction management form of contract, the construction manager comes on board to help the client but he himself does not actually place the contracts with all the various contractors.  So, in other words, the direct contractual link with all the works package contractors lies with the client.

 

474.          But in management contracting, the management contractor is becoming to all intents and purposes like a main contractor.  You contract with him, and he then enters individual subcontracts with all the works package contractors.  So there is a difference in the contractual link between the client and the works package contractors, and therefore that affects the balance of risk as well.

 

475.          Mr Campbell QC:  Thank you, you have anticipated the next question.  In the construction management route, if I have understood you correctly, there is not a contractual nexus between the construction manager and the people you have described as package contractors.

 

476.          Mr Alastair Wyllie:  Yes.

 

477.          Mr Campbell QC:  Perhaps in the old days they might have been called subcontractors.  But of course, for there to be a subcontractor you have to have a main contractor, don’t you?

 

478.          Mr Alastair Wyllie:  Which you do not have, yes.

 

479.          Mr Campbell QC:  So you have a contractual link between the client and package contractors?

 

480.          Mr Alastair Wyllie:  Yes. 

 

481.          Mr Campbell QC:  Now how is it understood, Mr Wyllie, that a package will be managed — let us take a package for the provision of, I don’t know, reinforcing steel.  The contract will be let by the client direct to a reinforcing steel contractor.

 

482.          Mr Alastair Wyllie:  Well, the contract documents place the contract responsibilities between the client and the contractor, but your construction manager, who is on board along with the design team, is effectively helping to draw up the contract documentation, so he is really part of the design team.

 

483.          Mr Campbell QC:  Nevertheless, he is not part of the contractual arrangements, as between the client and the workmen?

 

484.          Mr Alastair Wyllie:  No, he has his own contractual relationship with the client.

 

485.          Mr Campbell QC:  Yes.

 

486.          Mr Alastair Wyllie:  He really should be considered as a consultant, effectively.  He becomes a consultant, albeit a management consultant as opposed to an architectural consultant or whatever.

 

487.          Mr Campbell QC:  We could probably do this easier with a blackboard, Mr Wyllie.  Let me just persevere for a minute, if I may. 

 

488.          In construction management, you have a client with a direct contractual link with package contractors, however many are necessary for the job.  Now, what does that contract say about the spread of risk if a package contractor should overrun on cost or time?

 

489.          Mr Alastair Wyllie:  It depends how that arises, but clearly the construction manager can be liable if he is negligent, but other than his risk of negligence, by and large, the risk of cost overruns is carried by the client, unless he can prove that there has been some negligence on the part of the construction manager.

 

490.          Mr Campbell QC:  Or presumably some supervening event, which has held him back?

 

491.          Mr Alastair Wyllie:  Yes.

 

492.          Mr Campbell QC:  Now, let us contrast that, shall we, with management contracting, which you described to Lord Fraser as being an arrangement where there was a contractual link, or there is a contractual link between the management contractor and those responsible for carrying out the work, that is to say, the package contractor.  How does the spread of risk lie in that situation?

 

493.          Mr Alastair Wyllie:  Well, in that situation, you only have, as a client, a direct contractual link with the management contractor, and all the other package contractors are his subcontractors, so there is an immediate responsibility carried by the management contractor for his subcontractors, and that management contractor is effectively carrying their risk and is liable to the client.

 

494.          Mr Campbell QC:  So if they fail to perform and there is no exculpation involved, such as bad weather or some supervening event, does the risk of cost overruns on a package lie with the main contractor in the first instance?

 

495.          Mr Alastair Wyllie:  It probably would do, depending on the circumstances.  I mean, there may be a degree of possibilities as to why these things arise, and there may be situations where the management contractor would not carry the risk, but by and large, yes, the risk is more heavily carried by the management contractor.

 

496.          Mr Campbell QC:  But one can see a risk in that situation being spread between a management contractor and a package contractor?

 

497.          Mr Alastair Wyllie:  Well, there is always a degree of contention about where the risk lies between a main contractor and his subcontractors.

 

498.          Mr Campbell QC:  We will look in a later stage of the Inquiry about the precise text of these contracts, and I am not going to bore you to death with them today.  But is it open to the client when these contracts are being drawn up to allocate the spread of risk in relation to expected events in the contractual documents?

 

499.          Mr Alastair Wyllie:  Well, there are generally standard conditions of contract which are available for most forms of procurement, so by and large you have available to you recognised contractual arrangements, which should be put in place. 

 

500.          Now, it is always open to the client to change these or to try and modify them to suit his arrangements, but the bottom line is you have to enter a contractual arrangement and clearly, contractors will always look at the terms and conditions to make sure that they are not adverse.  So there is an issue about getting the balance right, because if it is too heavily loaded in favour of the client, clearly, that is liable to put the cost of the job up because the contractor will price that accordingly, so the risk has to be properly apportioned.

 

501.          Mr Campbell QC:  At the moment it is difficult for me to see why a client should enter a contractual arrangement where he carries all of the risk.

 

502.          Mr Alastair Wyllie:  Well, these two options, which were really the only two available, they have pros and cons other than probably risk as well.  I think I am right in saying that most of the input on this probably came from the project manager, Bill Armstrong, but I know that he had certainly first-hand experience of management contracting and construction management and I think the most recent project that he had been directly involved with was the Victoria Quay building in Edinburgh, which had been built by management contracting. 

 

503.          I think he had felt that in that situation he had been disappointed by the performance of management contracting, and therefore, he was firmly of a view that construction management would be a better proposition for the client.

 

504.          Mr Campbell QC:  Do you know what the source of his disappointment was?

 

505.          Mr Alastair Wyllie:  I understand the project overran, but I do not know the details.  I certainly saw minutes from him at the time, which recalled that he had been disappointed by management contracting on Victoria Quay, and therefore he was of the view that that was not the right route to follow.

 

506.          Mr Campbell QC:  You have described a regime for construction management which involves the client, whoever it be, in a direct contractual relationship with package contractors.

 

507.          Mr Alastair Wyllie:  Yes.

 

508.          Mr Campbell QC:  Does it necessarily follow that where a client is involved in such a relationship that he requires to have a lot of hands-on control on the management of packages?

 

509.          Mr Alastair Wyllie:  Yes, he would have to.  He would more direct hands-on control himself than in the situation where he was employing a management contractor, for example.  Yes, there is a greater burden on him to manage them.

 

510.          Mr Campbell QC:  And does it follow that in order to exercise that control he must first of all have the expertise to do so?

 

511.          Mr Alastair Wyllie:  You must have the expertise and the resources, that is correct.

 

512.          Mr Campbell QC:  To what extent in that scenario — we will leave Holyrood aside for the moment — to what extent in that scenario is the client dependent on the construction manager for advice as to how to manage a package?

 

513.          Mr Alastair Wyllie:  Well, that is part of the construction manager’s job, to help the client to manage.  He is effectively managing the project.

 

514.          Mr Campbell QC:  So if we talk about managing packages, is that actually done by the client, or is it actually done by the construction manager?

 

515.          Mr Alastair Wyllie:  Well, the client in this case had a project manager on board to help them, so primarily it is being done by the client organisation, albeit there is an adviser in the form of a construction manager who can help him.  There was a project manager within the project team.