Cabinet Secretary seeks urgent meeting with AWPR contractors

Cabinet Secretary for Transport, Infrastructure and Connectivity Michael Matheson said:

‎"Last month, Aberdeen Roads Limited (ARL) told Parliament that the current delays arose as a result of defective workmanship to the Don Crossing.  In the space of just two weeks following that statement, ARL’s target opening date for the remaining section of the AWPR slipped from before Christmas to January.

"We are now at the end of January and ARL are still not in a position to open this final section. The people of the north east will want to know why ARL have failed to deliver their own programme once again and I am committed to keeping them fully updated. 

"I am pleased to report all remaining physical works at the Don Crossing have finished. But the road can only be fully opened once Ministers receive the necessary assurances about the longer term impact of the remedial work and the changed costs of future maintenance.

"To put it more simply, we are not prepared to pick up the tab for mistakes made by construction companies. No responsible Government could ever saddle the public purse with uncertain costs for an uncertain period of time.

"Following a series of often robust meetings I held with ARL at the end of last year, I was delighted for the people of the north east when over 85% of the road finally opened on 12 December. Their feedback has been overwhelmingly positively since then.

"I am seeking yet another urgent meeting with the senior ARL team to leave them in no doubt as to how resolute our defence of the public purse will be.

 "The ball is in ARL’s court and I look forward to making this clear in person. 

 "I am pleased that the large majority of the road is now open and delivering considerable benefits. Transport Scotland continues to work flexibly and constructively with ARL to help it understand that a legally binding commitment that protects the public purse from the cost of ARL’s mistakes is required, and nothing less can possibly be accepted."

Background

• More than 85 per cent of the AWPR is now open to traffic and is delivering immediate benefits to the people and businesses of the North East. The overwhelmingly positive feedback so far has demonstrated the transformation that infrastructure can bring about in people’s daily lives, the quality of their environment and the economy as a whole.
• The estimated total cost of the AWPR scheme remains at £745m. Aberdeen Roads Limited (ARL) spent two years bidding for the project and went into it with eyes wide open.
• It is not unusual for claims for additional sums to be raised by a contractor on large, complex infrastructure projects. However, not all claims have merit.  Aberdeen Roads Limited (ARL) spent two years bidding for the project and went into it with eyes wide open.
• The Scottish Government is not willing to pay over the odds for the road on account of mistakes or miscalculations that are of the contractors’ making. It would therefore be wrong to assume the contractor’s total cost, whatever that turns out to be, is automatically borne by the public purse. This misconception fails to understand the nature of risk in public infrastructure projects.
• While it is not appropriate to comment in detail on the contractor’s claim due to the commercially confidential nature of the discussions regarding it, we can confirm that, to date, ARL has yet to provide sufficient evidence to substantiate its claim.

Q&A

Q. What are the specific assurances required from ARL?

A. Transport Scotland continues to seek commitments from ARL to minimise potential future maintenance risks and liabilities associated with the Don Crossing given it was subject to remedial works for a large part of 2018. These works mean the structure does not meet the contract requirements. Despite being repeatedly asked, to date ARL has yet to submit satisfactory proposals for such a commitment.

Transport Scotland has been seeking necessary technical assurances on the bridge, including enhanced monitoring and inspection of the structure both during the 30 year contract and beyond into the lifetime of the structure should significant future maintenance be required.

Q. Why can’t you open the road and sort out the contractual assurances later?

A. It is essential that these commitments are provided now to limit the risk of the bridge being closed again, which would cause unnecessary traffic impacts, should there be the need for extensive maintenance works.

Opening the road without these assurances would unnecessarily impact on Transport Scotland’s ability to protect the public purse from unknown but potentially significant future maintenance costs.

Q: What evidence do you have for commercial tactics from ARL around opening sections of the road.

A. ARL submitted a notice of substantial completion for the Craibstone to Stonehaven and Charleston section in August 2018. This became a matter of public speculation thereafter. However, ARL appeared in the Scottish Parliament in December and admitted it only received internal approval to open this section from its lenders on December 4, nearly two months since the physical works had been completed (in early October).

Similarly, ARL recently issued a notice of substantial completion (on 17 January 2019) for the final section, despite already agreeing that it needed to complete more technical and contractual work to provide these assurances. ARL know it is simply impossible to open the road in these circumstances and this spurious submission is further evidence that ARL is aggressively using the final stages of construction of the AWPR as commercial leverage.

This is not the first time we have been forced to caution ARL against attempting to use the North East’s enthusiasm for the road to apply pressure and cut corners on important contractual issues that simply cannot be avoided. 

Q. Is the bridge unsafe?

A. No. We have sufficient independent expert opinion that confirms the bridge’s safety. Of course, under no circumstances will the bridge open to traffic if ARL does not or cannot provide Transport Scotland with the necessary assurances.

However, this issue is more about longer-term durability and maintenance and the taxpayer not being liable for mistakes of the contractor’s own making. The design has been undertaken by ARL, ultimately, it is for ARL to provide the necessary comfort that the taxpayer is getting what it paid for, nor is the public purse being unreasonably burdened with unknown costs in the future. 

Q. Why did TS not step in earlier if it is not satisfied with the repairs?

A. ARL must satisfy the required quality and safety standards for AWPR infrastructure. Therefore, when it faced more extensive technical issues at the Don Crossing in October last year, it was for ARL to propose and carry out remedial works which will meet these standards. However, from this point on, Transport Scotland has consistently been reminding ARL for some months now of the assurances required before we can accept the road is complete. 

Disappointingly, ARL only began to engage seriously with this issue on 17 December 2018.