Scottish Parliament

Transport, Infrastructure and Climate Change Committee

Tuesday 11 September 2007

[THE CONVENER opened the meeting at 13:03]

Interests

The Convener (Patrick Harvie): Good afternoon and welcome to the Transport, Infrastructure and Climate Change Committee's third meeting of 2007. I ask members and all others present to switch off mobile phones and pagers. We have no apologies.

Agenda item 1 is a declaration of interests by our new member, Shirley-Anne Somerville. I welcome her to the committee and invite her to declare any interests.

Shirley-Anne Somerville (Lothians) (SNP): I am not aware of any relevant interests, apart from my membership of Friends of the Earth.

Scottish Government Transport Priorities

13:03

The Convener: Agenda item 2 gives the committee the opportunity to question the Minister for Transport, Infrastructure and Climate Change, Stewart Stevenson. I welcome him and his team—Frances Duffy and Bill Reeve—to the committee.

Members have several questions, for which we have allocated about an hour. There is much to cover, so I ask all members and the minister to be reasonably brief. The minister wants to give an introduction, which I ask him to keep brief also, if possible.

The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson): It is a great pleasure to be here as a witness—I have done that only once before, when I spoke about another subject.

I introduce Frances Duffy, who is the director of strategy and investment at Transport Scotland, and Bill Reeve, who is on my left and is the director of rail delivery. Several of my other officials, from whom the committee will hear under agenda item 3, are sitting behind me, purely because that is convenient and not for any other purpose. I am relying on Frances and Bill.

The subjects that we are dealing with today have exercised Parliament several times since the new Administration took office. In May, we debated the abolition of bridge tolls. The Labour Party initiated a sustainable transport debate on 7 June and I made my statement to Parliament on our transport priorities on 27 June. All that covered much ground. We made commitments to come back to Parliament with updates and decisions and we will do that. It may be slightly difficult, but I will do my best to navigate around my responsibilities to report to Parliament on some matters. When I can, I will update the committee on progress with the projects that are in my portfolio.

I am entirely open to the committee's questions.

The Convener: We will begin with questions about projects that are under way. Before the summer recess, a short piece of work was done on the financial management of two of the most high-profile transport infrastructure projects. An indication was given that similar work would be done on other projects. Will you update us on the process that is being followed and the timescale?

Stewart Stevenson: I will split my answer into two parts. We asked the Auditor General for Scotland to bring forward work on two projects—

the Edinburgh airport rail link and the Edinburgh trams—and he agreed to do that. The results of that work were made known to Parliament and were debated. As agreed with committees in the previous session of Parliament, the Auditor General has a programme of work to examine all major transport projects. I cannot make particular comments on that, because that is for him to progress and report on in the normal way.

Part of the normal, natural and necessary work of the new Administration was to consider the committed programme for transport projects that we inherited from the previous Administration. As I reported to Parliament, we examined all the commitments. We have told Parliament what we expect the financial outcomes of the various projects to be and we can examine them in detail again today if we wish. Of course, we have a continuing programme of talking to and working with Transport Scotland and with the transport directorate in the Scottish Government about all the projects.

The Convener: I think that a commitment was given in the chamber that the same level of information as had been provided on the first two transport projects would be provided for all other projects. Will that still happen?

Stewart Stevenson: On 27 June, I gave full financial information on our projects.

Des McNulty (Clydebank and Milngavie) (Lab): Before the short review was initiated in June, you made several statements that the trams and EARL projects were out of control. Audit Scotland's conclusions about the trams project did not support those statements and I understand that that was accepted by the Scottish Government—if you wish to call yourselves that—when it accepted the results of the parliamentary vote on 27 June. Given that context, why are you making no statements about potential cost overruns on other projects? Do no other projects have that potential? Was your concern only about the Edinburgh projects?

Stewart Stevenson: I am sure that Mr McNulty is aware that projects undergo a series of phases. A project starts with an estimate of its cost, which is based on an appraisal under Scottish transport appraisal guidance, among other things. What projects actually cost depends on the ability to source from the market a contractor that will do the work for the estimated price. That is the first point in the life of a project at which there may be a cost variation. The point at which projects move from estimates to the bidding process and the evaluation of bids is a key point at which ministers and officials take a keen interest in what is happening to the cost of the project. Decisions are made based on what is happening at that stage.

In major projects it is likely that, as the project continues, phased payments will be made to contractors. In some cases those will vary from what was originally in the plan. Again, it is important that ministers and officials keep on top of that and seek to deliver to the agreed figures. Equally, when we come to the end of a project we must reconcile its overall costs: the final claims that may come from the contractors against the contracted prices and the work that has been done. That is a further stage at which, for any project, there may be a deviation in either direction from the costs that were previously advised.

Ministers and officials are closely involved at each of those stages on all projects in deciding on the correct figures to accept and the correct process to be taken forward. We should not always assume that any of those steps leads to bad news. For example, an excellent piece of news that indicates first-class project management is the Waverley station upgrade project. Not only is it pretty clear at this stage that it is coming in on budget, but in addition it has been possible to add £2 million-worth of electrification of the Mound tunnel, which will benefit the Airdrie to Bathgate railway project. Although some projects head in the wrong direction, we are able to bring others in on budget and with extra benefits. The issue that you raise is an on-going concern as projects move through their life cycle.

Des McNulty: I am sure that it is an on-going concern. Let me reacquaint you with what you said. You extrapolated from cost overruns on the Stirling-Alloa-Kincardine line and said that, on that basis, it was reasonable to assume that there were cost overruns on the two Edinburgh projects—but presumably not other projects that were given lighter scrutiny, if I can put it like that, in the project review. You also said that you were aware of information—presumably being reported to you by officials—that suggested that there were significant cost overruns on those projects.

I presume that you selected the Edinburgh projects because you had been told that there were overruns on those, but not on other projects such as the Borders railway, the Aberdeen western peripheral route, the M74, the M80 Stepps to Haggs project and so on. Are you telling us, as a rational person dealing with what I hope is a rational process, that it is reasonable to infer from cost overruns on one project that there are overruns on other projects—projects that you do not like politically—but none on projects with which you are politically more comfortable? Or are you saying that there is a technical argument in relation to the Edinburgh projects that singles them out and indicates that they are more prone to cost overruns than the Aberdeen western peripheral route, the Borders railway or the other projects that we could go through?

Stewart Stevenson: I will make two points. First, the two projects to which you refer were far and away the biggest projects in the portfolio, so it was normal, natural and necessary that they should receive particular attention from the incoming Administration to establish exactly what we are facing and what budgetary provision may have to be made for them.

Secondly, you highlighted a number of projects for which there has been no meaningful expenditure yet. For example, no spade has gone into the ground for the Borders rail link. We have not yet even completed the due diligence for the transfer of the authorised undertaking role to Transport Scotland; neither have we yet met the three remaining ministerial conditions that we inherited from the previous Administration, of which you were part.

Consideration of projects' costings is on-going, and our ability to speak on such subjects to parliamentarians, including members of this committee, is largely determined by how far projects have got in the process.

13:15

The Convener: Can you wind up this line of questioning, Des? I want to bring in other members.

Des McNulty: I have a final question. I have spoken at some length to people dealing with the Waverley railway project, who express severe doubts about whether the project can be delivered with the current funding package. I note the great caution in the Executive's answers on that matter. I also note from those answers that the Executive has no idea of the revenue implications of the Waverley line. As I understand it, they have not been factored in to the equation.

The minister's point about projects being at different stages is true for the Edinburgh trams project, but not for the EARL project. The minister, or rather his Government, accepted Parliament's decision on EARL and the trams project as voted on 27 June, which invited the Government to progress those projects within the set budgets. Apparently, the Scottish Government asked TIE Ltd, which is running EARL, to discontinue work on the EARL project during the summer. Why did the Government do something that seems to flout its undertaking to abide by the parliamentary vote of 27 June?

Stewart Stevenson: Of course, both Mr McNulty and I voted for the Borders rail link project's existing terms and provisions. The due diligence process that Transport Scotland is undertaking will flesh out the issues that must be addressed to progress the project. I do not believe that the issues will have changed particularly, but

we certainly need to understand them in taking them on to Transport Scotland and, of course, in making progress on meeting the three conditions set down by the previous Administration, of which Mr McNulty was part.

Mr McNulty also referred to the EARL project, for which the issue of governance is important. He will know that the motion that Parliament agreed on 27 June referred specifically to that issue and that that is where the greatest difficulties lie. Mr McNulty will recall that the parties with an interest in the EARL project had not had meaningful engagement with one another. Over the summer, John Swinney met Dr Malcolm Reed, Mr Stephen Baxter of BAA and representatives of Network Rail in order to establish what the governance issues are. We have committed to report on the way forward on the EARL project in early course and, of course, we will do so.

The Convener: Do other members have questions on the EARL project?

Alison McInnes (North East Scotland) (LD): I was interested in hearing what actions you took over the summer, minister, to resolve the Auditor General for Scotland's concerns about governance in EARL, and you have just touched on that, but I would like more detail. You said that you would report on the way forward "in early course." The commitment, from the resolution of 27 June, was that you would

"report back to the Parliament in September".—[Official Report, 27 June 2007; c 1189.]

I hope that you can honour that.

What is your interpretation of "no new financial commitment", which is what the Parliament agreed? What has actually happened seems to be at odds with that. What costs have you saved over the summer?

Stewart Stevenson: I used the phrase "in early course" because I am dependent on the agreement of the Parliamentary Bureau for my appearing before Parliament. I have no reason to believe that the timescale for my doing so will be different from that to which you refer, but I cannot say so formally. I certainly hope that it will be this month.

We asked TIE to suspend work on EARL in view of the significant governance issues that exist. That is the way to protect the public purse and ensure that we do not allow the project to go ahead, given what the Auditor General said. He highlighted the fact that EARL is not in as good a shape as would be expected of a project at its current stage of development. He said that the project has

"no clear governance framework in place"

and

"no procurement strategy in place".

In that context, it would have been irresponsible of us to allow money to continue to be expended unnecessarily on that project. The expenditure that has continued has been the minimum needed to complete tasks that were in course and that had costs associated with terminating them without completion.

The Convener: Minister, can you be a little clearer on the point about reporting back to Parliament? Do you expect the information to be given to your colleagues in time for them to bring it to a meeting of the Parliament this month?

Stewart Stevenson: Yes, but it is formally for the Parliamentary Bureau to schedule the work of Parliament. On that basis, I am not making a commitment, although my expectation and intention is that that will be the case.

The Convener: That the bureau will have the information in time to be able to make that decision?

Stewart Stevenson: Yes.

Alison McInnes: The suspension of work seems to be a matter of prejudging the issue rather than of protecting the public purse. Has the suspension of work made it less likely that the project can proceed timeously if it is given a clear bill of health by the Parliament when you report back?

Stewart Stevenson: The Auditor General said that the project was

"unlikely to be delivered by the target date of ... 2011."

The issue of target dates in relation to the EARL project was already very much up in the air. When the Auditor General tells us that the project is not in as good a shape as he would have expected, it would be foolish for us to go against that. The Auditor General gave a more satisfactory opinion on the trams project, which was a key factor in our accepting the will of Parliament.

The Convener: We need to move on. A number of members have questions on a couple of projects that are still in the pipeline: the additional Forth crossing and the Aberdeen western peripheral route. I invite Shirley-Anne Somerville to lead the questioning on the Forth crossing.

Shirley-Anne Somerville: I appreciate that a decision needs to be made quickly about the replacement Forth crossing, but communities in the surrounding area have raised concerns with me about the consultation and whether they will be able to play a bigger part in that. I appreciate that there have been exhibitions, but can you give us any early feedback from those or any

reassurances for the communities involved that they will have other opportunities to take part in that process?

Stewart Stevenson: Indeed, it is a replacement Forth crossing that we are considering. We mounted a series of substantial exhibitions over the summer—there were 21 in 12 different venues in Dundee, Edinburgh, Fife, Perth and West Lothian. We reported last week that we had received 600 responses. As of today, that number has risen to more than 700; so, there is a clear engagement of the public in the process. Some 4,000 people attended the exhibitions; 1,500 people have subscribed to the online newsletter for the project; and the website has received a considerable number of hits. At this stage in the process, we are assimilating the input that we have received, which will form an important part of the decision making by the Scottish Government later this year.

Shirley-Anne Somerville: I appreciate the work that has already been done and the exhibitions that have taken place, but will there be any further opportunities for the public to take part in the process?

Stewart Stevenson: Of course. The website is still up and that has a great deal of information. If, on looking at it, people wish to make further input into the process, we would be delighted to hear from them.

Cathy Peattie (Falkirk East) (Lab): I am very disappointed that no consultation event was held in Falkirk East and that only one West Lothian venue was used. A real opportunity has been missed. The minister may be aware of the consultation on the Kincardine crossing, which took place around Scotland. One of my local community councils provided an option—it was the option that was taken—but their views may not have been considered in this case.

Why did a wider consultation not take place? Also, two final options were set out, prior to any real consultation with the local communities that will be affected by the decision, whatever it is. I am concerned about that, too.

Stewart Stevenson: I return to what I said earlier. At this stage in the process, we have consulted with the whole of Scotland via the web—

Cathy Peattie: Not everyone has the web, minister.

Stewart Stevenson: Of course, there will also be consultation on the Government decision. The process of consultation has a considerable distance to run before the replacement crossing is put in place.

Cathy Peattie: The minister did not answer my question.

The Convener: Do you want to have one more stab at it, Cathy, before I bring in other members?

Cathy Peattie: Yes, please.

The minister did not bother to tell me why he did not go anywhere in West Lothian or why he did not go to Falkirk. I seek some comfort that he is listening to what local people are saying. I understand that he went on to say that the Government would go back to people on the final options. However, consultation means talking to people prior to putting a plan together, not putting a plan together and saying, "Here it is. Take it or leave it."

Stewart Stevenson: I assure Cathy Peattie of our continuing desire to listen to and interact with people, wherever they come from—my officials and I will do that. Holding 21 exhibitions was a pretty terrific task, particularly given that Transport Scotland was asked to do it at very short notice. People came from quite far afield to the exhibitions—we had 4,000 visitors. Although I am not certain, I would be surprised if some of Cathy Peattie's constituents had not taken the opportunity to come to the exhibitions. I am also pretty confident that many of them will have looked at the website. People can download information to analyse at leisure; information that will give them a robust basis for feedback to me and my officials in taking forward the project.

The Convener: Were other locations for exhibitions, including Falkirk, considered?

Frances Duffy (Transport Scotland): Yes. We looked at the information on origins and destinations to try to pick out the key areas. As the minister said, we had a very short space of time in which to try to arrange the public exhibitions. We looked across a wide area for locations, but one of the problems that we faced, particularly in West Lothian, was that of finding suitable locations at such short notice. In the circumstances, we tried to spread the net as far and wide as possible.

Stewart Stevenson: If I may, convener—

The Convener: Briefly, minister.

Stewart Stevenson: I want to reinforce the point that, if people still wish to make comments, of course they should do so.

Cathy Peattie: I am still very disappointed.

Des McNulty: The minister will be aware of the various tolled bridge studies, which demonstrate that the removal of tolls from the bridges will result in a significant congestion impact of between 15 and 20 per cent. He will also be aware of the legal requirement for a strategic environmental assessment where plans, programmes and

strategies have a significant impact on the environment. Why is he using the requirement for an SEA as an excuse to delay the introduction of the environmentally beneficial climate change bill, when his environmentally disadvantageous plans for the removal of tolls do not involve an SEA?

The Convener: We will have the opportunity to question the minister on the Abolition of Bridge Tolls (Scotland) Bill during the stage 1 inquiry. This session is principally to consider issues that are not coming up immediately.

13:30

Des McNulty: I wanted to pick up the consistency of application of principle.

The Convener: I will extend the question a little. It has been suggested that the lifting of bridge tolls will increase traffic congestion and traffic levels. An additional crossing—it might be a replacement crossing—would increase the total capacity across the Forth. Have estimates been made of the total amount of additional traffic that would be generated?

Stewart Stevenson: I refer the convener to my oral answer last week, when I said that our overall objective is to contain traffic levels on the existing crossing to 2006 levels. I have a little observation on the climate change bill, which is that if it has been delayed, no one has told me.

The Convener: As there are no further questions on the replacement Forth crossing, we will move to the Aberdeen western peripheral route.

Alison McInnes: How does the Government intend to finance the AWPR? What impact will that have on the budgets of the local authorities that are partners in the project?

Stewart Stevenson: As the previous chair of the north-east Scotland transport partnership, Alison McInnes will be aware that the project is to be 81 per cent financed by the Scottish Government, and 9.5 per cent financed by each of the two councils involved. The issue of the source of the funds is a matter that will be progressed as the project moves forward.

Alison McInnes: Is work being done on that? I would not like to think that arguments about how to finance the project might hold up development of the AWPR.

Stewart Stevenson: Alison McInnes makes an interesting point. On coming into office, I found within a matter of weeks that the previously announced date was unsustainable, largely because of the predictable number of objections to the choice of route. That is a practical problem, which is a more substantial difficulty for the AWPR

than any issues relating to finance. Those issues will be progressed on a timetable that is consistent with what is possible in civil engineering terms, and with what is possible in terms of dealing properly, legally and appropriately with the 8,000-plus objections to the route.

The Convener: Will all the objections that you mentioned stand once the road orders are reissued?

Stewart Stevenson: Yes. In the information that we issued this morning when we published the road orders—another set will be published on 25 September—we have made it clear that we will deem that all the existing objections to the previously issued orders, which have been updated only in a legalistic sense and not in matters of substance, be continued. If people wish to submit new objections, or to withdraw an objection and submit one in slightly different terms, that is entirely their right. However, the existing objections will stand and will be considered as if they had been submitted now.

The Convener: You may be aware that petitioners to Parliament have had their petitions closed on the basis that they would have a future opportunity to make their arguments in a public inquiry. Are you able to guarantee that there will be an inquiry? Is that still an open question?

Stewart Stevenson: Whether there will be a public inquiry depends on whether the large number of objections can be dealt with in advance of the need for an inquiry. I expect that there will be a public local inquiry, and that it will take place in spring 2008. That is a somewhat legalistic answer. I am not seeking to prevent a public local inquiry if that is the right way to proceed.

The Convener: Perhaps we will be able to pursue that later. There is one other issue about the AWPR. Some objectors received an assurance from the First Minister before he was elected that minutes of meetings at which decisions were made about the route of the AWPR would be published. They have since been told that some meetings were not minuted. Is that still the Government's decision-making process, or can you give a commitment that all such decisions will take place at minuted meetings in the future?

Stewart Stevenson: The Government's intention is that every piece of evidence that we can provide will be available—for example, to the reporter at the public local inquiry, which I expect will take place.

The committee will be aware that it is not possible for me to provide information that derived from unminuted meetings that were held under the aegis of the previous Administration, and that nor is it possible—because it is not available to me—to provide information on advice or other material

that was given to ministers of the previous Administration. They may decide that it is in everybody's interests to make available information that I cannot make available because of the protocols between one Administration and another.

The Convener: I have one final question before I bring other members in. At the same meeting, Mr Salmond made a commitment to abide by the findings of a public inquiry, which would look at all proposed routes. Is that commitment still in existence?

Stewart Stevenson: The findings of a public inquiry are the key part of that inquiry, which inform recommendations.

The Convener: Will the inquiry look at all the proposed routes?

Stewart Stevenson: Yes, indeed. The whole point of the inquiry is to establish the appropriateness of the routing. It is worth making the point that it would be slightly unusual not to accept the findings of a public inquiry because of their being, as they are, findings of fact.

The important point is that the minister who takes the planning decision must do so on a legal basis and unconstrained by anything other than what is in front of him or her. I suggest that, from the objectors' point of view, it would be unhelpful if the minister were not to consider what was in front of them, because the objectors may get any one of a range of options in the recommendations. However, the First Minister's commitment to abide by the findings is one that will stand.

Des McNulty: I have some financial questions. Are the costs of removing the oil industry institute included in the total costs of the project as set out in its budget?

Stewart Stevenson: I am unaware of any such move.

Des McNulty: That is interesting. Is there any cap on the costs to the local authorities, or are they obliged to pay 19 per cent of whatever the final overall cost of the project is?

Stewart Stevenson: We will have to wait and see what the tender costs are at the end of the day. There is no change to the cost of the project from what has previously been published. We have an agreement on the percentage terms that I previously stated.

The Convener: This will have to be your last question, Des.

Des McNulty: My understanding was that Aberdeenshire Council and Aberdeen City Council had agreed to pay a contribution towards a certain route. The route was changed, and they were not supposed to pay a contribution towards the

Stonehaven fast link. That is inconsistent with what you said, minister. Can you clarify the cost of the fast link and therefore what the 19 per cent contributes towards?

Stewart Stevenson: The fast link will be paid for by the Government.

The Convener: We might need to pursue some of the detailed questions in writing after the meeting.

Alex Johnstone (North East Scotland) (Con): My question relates to tolling on the Forth bridge, but not to provisions that appear within the bill that we are about to discuss. As the minister may be aware, the Transport (Scotland) Act 2001 appears to confer on the Forth Estuary Transport Authority the right, in effect, to reintroduce toll charges at the Forth bridge under the guise of congestion charging or road pricing. Is it the minister's intention to take action to repeal those sections of the 2001 act, at least in so far as they affect FETA?

Stewart Stevenson: I am conscious that David McLetchie raised that issue—I thank him for doing so. I will consider the matter, because it is certainly not the Government's intention that that power ever be exercised, and I will consider whether it is possible to repeal those sections in the bill. I have not yet had the opportunity to examine the point, but I intend to do so.

The Convener: We will have the opportunity to come back to that matter in more detail in the future. We move on to questions on the road equivalent tariff.

David Stewart (Highlands and Islands) (Lab): I am interested in your proposals for the road equivalent tariff, particularly the pilot that you are doing around the Western Isles. You will recall that, at our away day, I put a number of points to the minister; I will rehearse some of them now.

As you know, there is nothing particularly new about the RET; I think the old Highlands and Islands Development Board initiated a study on it in the 1980s and many academics have written about it. I presume that what the Government has in mind is a ferry users' equivalent of the discount scheme for air travellers that the previous Administration introduced.

I have a number of questions about range, qualifications, capacity and state aid regulations, although I think that they will be straightforward. Do you intend the road equivalent tariff to apply to all mainland to island services? Do you intend it to apply to inter-island flights? Will it cover mainland-to-mainland services, such as the Corran ferry? Will there be a qualifications provision, such as in the present discount scheme, so that only island residents would qualify for the tariff?

The main issue that jumped out on the away day, which you have alluded to, was that if the tariff is a success—at one level, we all hope that it will be—and provides a better service to island communities, you will immediately run into capacity problems. Those could be solved in three main ways: you could increase the frequency of the ferries; you could increase tonnage, but there would clearly be a lead-in time for that; and you could take in new entrants. Have you examined whether state aid regulations might impact on any study that you are carrying out?

The Convener: After that, minister, I must still ask you to keep it brief.

Stewart Stevenson: I will work backwards through the questions. We are certainly conscious of the interaction between our proposals and state aid regulations. It is likely to mean that we cannot provide a subsidy directly to users but will instead have to provide a sum in compensation to ferry companies. That is a technical point, but we are conscious of the general point that David Stewart makes.

In the first instance, we are constructing a pilot, part of whose purpose is to understand, for example, elasticity in demand. In other words, by how much does uptake lift when we reduce prices? We wish to do that in part because we wish to ensure that islanders in particular continue to have access to their vital links to the mainland. However, seeking to support all users is a design criterion.

There are 67 or 69 ferry routes in Scotland—I cannot quite recall it at the moment but, if you wish, I can get the absolute figure. Our intention, if we progress all the way, is to support them all. One or two of them are local ferries in the Shetlands where the current price is well below any putative figure for the road equivalent tariff, but we would not require them to be raised to that level if Shetland Islands Council wished to continue to support them.

I think that that covers all the questions.

David Stewart: I raised a specific issue about Shetland at the away day and will mention it now in public. Users of a service that goes 200 miles to the mainland, such as the Shetland to Aberdeen service, would not really win from a road equivalent tariff. That is the anomaly that the HIDB showed in its study away back in the 1980s. If I remember rightly, your reply to me at the away day was that there were other routes, such as that via Caithness. I know that it is early days and that a lot of work still has to be done in the study, but are you suggesting that a different route will be considered for Shetland? Otherwise, a road equivalent tariff will not work for the Shetland isles.

Stewart Stevenson: We are some distance from coming to conclusions on that. The pilot that we are looking to develop will involve a Western Isles route, but we will consider that issue. I am well aware that certain sea routes are longer than they might be and that we need to consider how to deal with the issues that that raises. In any event, the intention is that all ferry users who pay substantial sums of money to travel on such routes should benefit from the initiative.

13:45

David Stewart: I realise that the results will depend on the type of model that is used, but some studies have predicted that the cost of such an initiative will be in the region of £200 million. Your answer will probably be that you have not finished your work yet, so you do not yet know what the cost will be, but how will your budget be allocated to meet any extra costs? I ask because £200 million for 69 routes is a sizeable sum. Although I welcome the help that would be provided to island communities, I would like to know what budget provision your department has made for the initiative.

Stewart Stevenson: Initially, we are considering a pilot. The subject of future Government expenditure forms part of the comprehensive spending review. When our budget is published in due course, it will show the figures for the RET scheme and for projects in a wide range of other policy areas.

The Convener: Alison McInnes has a question on the strategic transport projects review.

Alison McInnes: I seek the minister's reassurance that the strategic transport projects review will be an objective and transparent process. At the moment it is not clear what involvement other interested parties will have in it. I am particularly concerned about the role of local authorities and regional transport partnerships, and would like to find out what regard will be had to the well researched and appraised projects of the national and regional transport strategies, which have broad approval. How will they be assessed alongside the new projects that have been the subject of ad hoc Government announcements over the past two or three months, the most recent of which was made yesterday?

Stewart Stevenson: The strategic transport projects review, which is under way and is due to report in the middle of 2008, has been running for some considerable time. The governance arrangements for it are unchanged under this Administration.

The Convener: Are there any supplementaries on that subject before we move on?

Des McNulty: Yes.

The Convener: There had to be one.

Des McNulty: You carried out a short review and now you are halfway through a longer strategic projects review. We know that some of the costs of major projects are likely to be higher than is currently specified and we know that we face a set of tight financial conditions over the next spending review period. In progressing its strategic projects review, how will the Scottish Executive prioritise between projects that are already in the system and those that, as Alison McInnes said, you have been announcing and unannouncing over the past few months, such as the A9 upgrade? How can you deliver existing commitments and additional projects, given the financial constraints that you face? What mechanism exists for dealing with the problems that confront the Government?

Stewart Stevenson: We are in slight danger of conflating several issues. The strategic transport projects review covers the period 2012 to 2022, which is, by and large, beyond the scope of the current comprehensive spending review, so we should not expect to see the results of the review reflected in the immediate budget.

As regards how we will balance the books and assess the priority that we should give to different projects, we will proceed carefully, giving due consideration to the available money. If Mr McNulty wishes to continue to be pessimistic about the costs of the projects that I have inherited from his Administration, I duly note that.

The Convener: We will now move on to ask about the national transport strategy.

Rob Gibson (Highlands and Islands) (SNP): I want to ask about improving journey times, reducing emissions and improving public transport. The minister might well be able to initiate transport policies—policies that come from the new Administration rather than policies that have been inherited from the previous one. It seems that the tier 3 elements in the high-level output specification will fit that bill.

What kind of work will be done, and when, to cost projects such as the improvement of the rail link between Perth and Inverness?

Stewart Stevenson: The high-level output specification—this is the first opportunity since the Scottish Government was given responsibility for railways in Scotland—will be part of the input to Network Rail's strategic business plan, which will cost proposals by around 31 October. The Office of Rail Regulation will match that plan against the available public plans. A process of negotiation will be associated with that. We expect that to lead to

plans in the middle of next year, and a final decision will be taken in autumn next year.

The process is clearly defined. Of course, it does not involve just the Scottish Government. We have an interest in cross-border rail services, and the Office of Rail Regulation has responsibility for railways on the whole of this island.

Rob Gibson: Will we be able to contrast, for example, the cost of a mile of dual carriageway with the cost of railway line development, to give us a measure to use when meeting the needs of the central belt and other parts of Scotland?

Stewart Stevenson: I would urge caution in making such a comparison. Comparing cost per kilometre for roads and railways is not terribly useful. Nonetheless, the point that Mr Gibson hints at is valid: a public benefit is associated with various kinds of transport investment.

Mr Gibson will know that I am a relatively enthusiastic rail user; I travelled to Edinburgh by rail today, before taking the bus to my office. As a committed user of it, I am keen that we make good investments in public transport. By making public transport attractive and affordable, we will be able to control the use of the private car, by limiting it to journeys for which its use is appropriate, as opposed to journeys for which it is simply convenient or the easiest option. The member can be assured that we want to proceed on that basis.

Rob Gibson: You have suggested that it would probably take about 25 years to complete the dualling of the A9, but I presume that an upgrade to an hourly rail service would not have to wait 25 years. I am thinking about services to the far north, where the large amount of wealth that could be created is out of proportion with the number of people who live there.

Stewart Stevenson: The work to improve journey times to Inverness depends partly on rolling stock but also on infrastructure—mainly signalling. We want to make early progress with that work. The timescale will certainly be substantially less than the 25 years to which Mr Gibson referred.

The Convener: I have a brief question that touches on the other half of the committee's remit. The Executive has indicated that it will introduce carbon budgeting for transport. When will we see results from that project? How much work is under way? Does the Executive accept the principle that the committee discussed at its away day—that any delays in making carbon savings will have to be compensated for by making significantly greater savings later on?

Stewart Stevenson: You will forgive me, convener, for not asking about that specific matter before I came to the meeting. I would prefer to

answer your questions in writing, if I may. However, I will say that we are developing a carbon balance sheet, which will play an important part in informing Government policy.

The convener has made the point that if we delay tackling carbon emissions, more carbon will be pumped into the atmosphere. We know that even if no further carbon is emitted, it is likely that it will be in the region of 40 years before the effects of the additional carbon that we have put into the atmosphere in recent decades are mitigated by natural processes, and that if we continue to add to the carbon overbudget—if I may use that term—we will not only fail to meet the ambitious targets that we are setting to reduce our carbon emissions by 80 per cent by 2050, but we will be pumping something into the negative side of the balance sheet that will make meeting targets more difficult and delay the point at which the world is restored to some sort of equilibrium—or at least the point at which we enable Scotland's contribution to that restoration to be met.

The Convener: We look forward to receiving in writing at some point in the future more details on the carbon balance sheet.

I thank the minister and his team for attending the meeting and for answering questions. There will now be a changeover of witnesses. Members who want to pursue issues in writing with the minister should, as soon as possible, tell me or—preferably—the clerks by e-mail what specific questions they want to ask. We can then progress those issues.

At our previous meeting, it was suggested that we should pursue a meeting with the Cabinet Secretary for Finance and Sustainable Growth so that we could deal with related issues. I agree that we should take that course of action. The tone of the discussion was that we wanted to agree a specific remit for that meeting. If members have specific questions that they want to ask him, we can ensure that he is aware of them and is able to answer them during the meeting. Members should get in touch with Steve Farrell about their questions—he will e-mail you to remind you to do so. We can structure a meeting around members' questions.

Des McNulty: Will you clarify what you are saying, convener? When committees invite a minister or a cabinet secretary in such circumstances, an indication of the themes on which members are likely to ask questions is normally given rather than specific questions, but you are suggesting that members should ask specific questions, which we would let the cabinet secretary know in advance. I do not think that you intended to say that.

The Convener: To be clear, I am asking members to be specific about the issues that they want to raise in a meeting so that we can structure it and decide on its timing.

Abolition of Bridge Tolls (Scotland) Bill: Stage 1

13:58

The Convener: Item 3 is the beginning of stage 1 of the Abolition of Bridge Tolls (Scotland) Bill. The committee will take evidence from a number of panels. We will be pushed for time, so it would be appreciated if members and witnesses made their questions and answers as brief as possible.

I welcome the first panel. David Patel, Chris Rogers and Keith Main are the Scottish Executive's bill team.

I will begin with a general question about public consultation. Why was there no formal consultation on the bill? Not only is such consultation good practice, it is often seen as a requirement.

David Patel (Scottish Government Transport Directorate): Could I make a few introductory remarks?

The Convener: Please do.

14:00

David Patel: I am David Patel and with me are Chris Rogers and Keith Main. We are the three officials who have been principally involved in putting together the documents that are now with Parliament. The bill takes forward the parliamentary debate that took place in May and is tightly focused on the abolition of tolls. There is a further provision on the debt deadline relating to the Tay bridge. We are happy to provide evidence on all the matters that the bill touches on.

The policy memorandum sets out the objectives and mentions the consultation, which I will come back to. It describes the research, the opinion-based evidence and a range of other matters relating to equalities and sustainable development. The financial memorandum is a summary of the work that has been done. The estimates are broadly robust, although we would like to continue to discuss those with the boards. The intention is that the Government will replace the toll income that is currently collected with a grant and leave the management, maintenance and operation of the bridges with both boards.

I take this opportunity to thank the officials of the Forth Estuary Transport Authority, whom we first met in July, and those of the Tay Road Bridge Joint Board, whom we first met in June. They have been instrumental in getting us to our current position.

The proposals are a manifesto commitment. There is no formal requirement, in such

circumstances, to undertake a wide consultation, as the view is that the proposal has been put before the electorate. That said, there has been widespread consultation and research on this matter and, last year, an open invitation to contribute information was issued to the public and MSPs. We have, therefore, gone through quite a lengthy information-gathering process on the question of the abolition of tolls. Clearly, there has been widespread consultation with the boards at official level and Stewart Stevenson has met the elected members of both boards. I hope that the policy memorandum will give you a good feel for the views that have been expressed by the public, MSPs and business organisations.

The Convener: Where is the assumption expressed that a manifesto commitment need not be consulted on? That is a particularly important point in the context of a minority Government, as the governing party does not have a legislative majority in its own right.

David Patel: I cannot give you a precise source for that information, but the legal advice that we have been given on the production of the bill is that, because it relates to a manifesto commitment, there is no formal requirement to consult on it.

The Convener: I ask the same question in relation to the environmental impact assessment.

Chris Rogers (Scottish Government Transport Directorate): The legislation says that changing the financial arrangement, which is what we are doing, is not subject to strategic environmental appraisal and that that is not a requirement. However, the toll impact study gives us an indication of the environmental effects of removing the tolls.

The Convener: So the Executive's legal advice is that, despite the environmental impact that the toll impact study suggests will take place, no environmental impact assessment is required.

Chris Rogers: A strategic environmental assessment is not required, no.

Cathy Peattie: Mr Patel, I am surprised to hear you say that there is no need for consultation. Would you feel that the stakeholders—the people who work and manage the bridge—should not be consulted? Do you think that they are irrelevant in this? I will speak to trade union representatives about this later on.

David Patel: It is not that we think that there should be no consultation; the Government made a manifesto commitment, which was in the public domain, that, should it come into government, it would take the tolls off the bridges. Last year, there was an open consultation on the impacts and implications of taking the tolls off the bridges.

The staff on the bridges will have had an opportunity at that point to give their views on the proposal.

I take the point that you are making, but I am merely stating the legal advice that we have been given in relation to the production of the bill.

Cathy Peattie: Thank you.

The Convener: I remind members—although I am sure that you are aware of this—that we will have an opportunity to question the minister on the political decisions that have been made in the process. We have the opportunity now to question officials on aspects of the decision-making process and the advice that they have received.

Des McNulty: I put this question to the minister, but he chose not to answer it. I think that I can ask you questions that will allow me to re-present the question to the minister when he appears. The argument that a strategic environmental assessment might not be needed because what is proposed is simply a financial change might have been more valid had you not carried out the studies that you have carried out, which show that there is a considerable traffic and environmental impact associated with the proposed change. I remind you that the European legislation says that a strategic environmental assessment is required when there will be a significant environmental effect. You have produced significant evidence, over the past two years, that there will be a significant environmental impact. In those circumstances, how is it plausible to argue that this is a purely financial change and that there will be no environmental impact? I do not understand the logic of the position.

Chris Rogers: No, we are not arguing that there will be no environmental impact—at least, not as far as I am aware. Under statute law, anything that is just a financial change does not fall within the realms of strategic environmental assessment. Colleagues have read the guidance from Europe; what is being done falls within that guidance.

Des McNulty: I remind you that the Scottish Parliament went beyond the requirements of Europe when it drafted its legislation and inserted additional requirements. So, what is required is not based purely on European guidelines but is also based on our own legislation.

I put it to you again that the Executive has produced considerable evidence to show that there will be a significant environmental and traffic impact as a result of the removal of tolls from the bridge. In that context, it is not plausible to maintain that the removal of the tolls will be purely a financial change with no environmental impact. There plainly will be an environmental impact, so the policy should have been the subject of a strategic environmental assessment.

Chris Rogers: I understood your point the first time around, sir. However, basically, that is what the statute law says. We are not constructing anything or changing how things are built. Where the change is to a financing arrangement, the requirement to have a strategic environmental assessment does not apply. It is a little difficult for me to go any further than that.

The Convener: I will bring this exchange to a close with the suggestion that we have the opportunity to seek an alternative viewpoint from an independent source of advice before we put our questions to the minister. I have the feeling that, if we want to pursue the matter further, we will need the minister's answers rather than those of the officials.

Des McNulty: It would also be helpful if we could ask the Executive to supply us with the legal advice on which it is basing the distinction that it seeks to make.

The Convener: We can pursue that in writing.

I have a couple of further questions about the toll impact study. Is the Government taking action to minimise the additional congestion? How is the additional congestion expected to impact on the surrounding area?

Chris Rogers: I note your advice that I should keep my answers short but, unfortunately, a lot of the answers on the toll impact study are rather lengthy. A number of caveats accompany the results of the toll impact study, but the study suggests that it is very likely that, particularly in the off-peak periods, there will be additional congestion, predominantly because of rerouting. However, the environmental impacts will be relatively modest and we do not envisage that there will be significant changes to things such as noise or local pollutants. In general, the total level of local pollutants will not change, but it might increase in some areas and decrease in others. The monitoring of local pollutants is a local authority issue, so we would discuss with Dundee City Council any issues of air quality management that arose in Dundee.

The Convener: Given the Government's climate change policy and its commitment to maintain traffic levels, was no reassessment made in light of the toll impact study's predictions? I accept the point that local pollutants are a separate matter.

Chris Rogers: Much of the likely impact on congestion was indicated in previous studies, so the Government had knowledge of that potential when it went into this. The most recent previous study was published in, I think, 2006—

David Patel: It was published in March 2006.

Chris Rogers: A considerable amount of knowledge was already available to the

Government. Following the toll impact study, the Government considered whether there should be any change in policy, but it took the view that the issue of social justice for Fife was the overriding concern.

The Convener: When that reconsideration was taking place, did the removal of the tolls only at particular times of day crop up? Was that proposal assessed in light of the toll impact study?

Chris Rogers: No, sir, not specifically. The issue of social justice for Fife was the overriding concern, so running the tolls for only half the day was not considered.

David Patel: Ministers have noted the study, although they did not commission it. Perhaps we could discuss some of the results of the study at some stage today. For ministers, the clear priority is removing the tolls from the bridges. Ministers see it as an injustice to maintain the tolls on those bridges.

Mr Swinney has said that ministers will consider public transport and other measures to try to tackle congestion on the bridges. Keith Main will be able to say a little bit about the measures that have still to come on stream. We can certainly expect that ministers will consider the public transport alternatives, such as park and ride and support for buses, within the spending review, so we should be able to discuss those issues later in the passage of the bill.

The Convener: Let us move on to the next question.

Des McNulty: I appreciate that the officials are in a difficult position, so I do not want to draw them into purely political issues that it would be more appropriate to take up with the minister. However, the situation is that significant studies have been commissioned on the impact of removing the tolls from the Forth road bridge. One study showed that removing the tolls from that bridge would increase southbound traffic levels by 15 per cent and northbound traffic levels by 20 per cent and that it would extend the peak periods. What in your view will be the impact of that increased traffic on the structural integrity of the bridge, and what calculations have you done of the impact that it will have on the date at which the bridge might be closed to heavy goods vehicles?

14:15

Chris Rogers: I will first add a significant caveat to the figures that you have produced.

Des McNulty: They are your figures, actually.

The Convener: Let the witness answer.

Chris Rogers: When we look at the modelling, we use a strategic model that considers

nationwide impacts and we try to use a local model to consider local impacts. Unfortunately, we did not manage to get a local model working on the Forth. On the grounds of speed and resources, we were trying to use models that were immediately available.

Please take some care with the strategic model figures, particularly for the Forth, because you will find that in a number of the years the figures exceed the physical traffic capacity of the bridge. There are figures in there that total up to more than 4,000 vehicles northbound, which I think the gentleman from FETA sitting behind me will confirm is not a practical proposition. The level of peak-hour increase that is shown is probably too high. The same congestion concerns do not arise in the off-peak period although, as the member said, there are significant increases in the peak.

On the structural integrity of the Forth road bridge, although I am a roads and bridges engineer, the bridgemaster of FETA, who is sitting behind me, is far more convincing in his detailed knowledge of the structure. We have had lectures on the issue and we have discussed it with FETA. The prime issue for the longevity of the structure is the level of corrosion. If you wish, FETA can give you chapter and verse on what it is doing to reduce that corrosion. However, for the question of when things may or may not happen to the structural integrity of the bridge, the issue is fundamentally to do with corrosion, not relatively minor changes in traffic levels.

Des McNulty: There is a problem with those answers. I appreciate that we can address the same issues to FETA, but I suggest that 15 to 20 per cent increases in traffic and the consequences for congestion beyond the bridge if there are blockages are not marginal or minor. I suppose the issue from the point of view of the economy, particularly of Fife, Tayside and other parts of Scotland, is whether there is a significant impact on the pattern of use of the bridge. It will cause a considerable problem if, by 2014, HGVs and public service vehicles are not allowed to go on the bridge.

The removal of tolls from the bridge might add additional strain on the bridge. I appreciate that there is a balance between strain and weather-based corrosion, but the two work together to undermine the structure of the bridge. Removing the tolls might increase the possibility of HGVs or PSVs no longer being able to use the bridge or of the bridge being out of use to such vehicles for a longer period, either of which would have a devastating impact on the economy of much of the east of Scotland. The question that I am asking you is technical, not political. What calculations have you done and how reliable are those calculations? Can you be sure from what you

know that you are not running a considerably enhanced risk of PSVs and HGVs not being able to use the bridge, with all the implications that that has for the economy of Fife and the east of Scotland?

Chris Rogers: We have not attempted to do specific calculations, but I have discussed the matter with the bridgemaster of FETA, as I said. The fundamental problem with the bridge is the potential for corrosion. If that corrosion can be controlled, use of the bridge will continue.

At peak times, the bridge is already full. What you are considering is a repetition of loading, more than anything else. That predominantly has an impact on matters such as the lifetime of the surfacing. Unless the structure has fatigue-susceptible components, the structure's lifetime is not altered.

Des McNulty: You did a monetised transport impact assessment on the removal of tolls. Have you done a monetised transport impact assessment on the impact of HGVs and other heavy vehicles not being able to use the bridge for a considerable period?

Chris Rogers: That falls within the work that my colleagues in Transport Scotland have done. We have not done that work as part of the toll impact study. An assessment by Transport Scotland was put forward in an answer to a parliamentary question, but it was relatively straightforward.

Des McNulty: So, as part of the work that has led up to the bill, which you say is financial legislation, you have done no assessment of the increased risk of HGVs and PSVs no longer being able to use the bridge. You have not assessed the broader economic impact of that risk being realised. You have questions about your own evidence on the traffic and congestion impact, and you say that no strategic environmental assessment is required before the legislation is passed. Is that a reasonable summary of your position?

Chris Rogers: I will start with the suggestion that we have not assessed risk. We have looked at the risks, but we have not done a mathematical risk assessment. We have discussed the potential impacts with the people who have the greatest knowledge. They have said that the risks will not significantly increase and that the risk is from corrosion and not from increased traffic.

As for putting a financial figure to the removal of HGVs, we did not analyse that when considering the bill, because the connection with the bill is too tenuous. We know that Transport Scotland has examined that in its models and we can get at those figures if the committee wishes to have them.

I have explained that we have not done a strategic environmental appraisal because to do so is outside the legislative requirements.

The only other matter that you mentioned, sir, is that we have doubts about our own study. It is not so much that we have doubts but that the study was done to a short timescale, because the minister—from the previous Administration—gave a commitment to Parliament that the study would be done quickly. As a result of that, we had to use everything that was readily available to us. When we used the models, we knew their limitations. All that I am doing is passing on the limitations of those models, which are covered in the toll impact study.

David Patel: We have focused on the modelling, but it is worth pointing out that the toll impact study contains lots of different evidence. The primary research has taken in the views of business, the public sector and the freight industry. Quite a lot of the individual responses suggested that there may not be that great an impact from toll removal. We must weigh that into the balance; it is covered in sections 7 to 10 of the toll impact study. In addition to the modelling, we cannot ignore the views that are expressed in the research. There are various aspects to the research project.

Des McNulty: Was there evidence from other toll removals that would give you a basis—

The Convener: On much of this, we are as close to the line between questions for officials and questions for the minister as we can go. Some of the issues will also come up with the next panel.

I will pursue one detail, which has perhaps been missed, before we move on to other issues. You mentioned that the increased traffic across the Forth road bridge could have an impact on the road surface. Has the financial impact of that been assessed?

Chris Rogers: No. I would need to take much more detailed advice from FETA about whether it would have an impact. I am saying that the road surface is what is most vulnerable from repetition of traffic. I know that FETA has had to reduce the time interval between its surfacing over the years. I am sure that more details of that will be available from the gentlemen from FETA who will give evidence next. We have not assessed either how much more quickly the surface might need to be replaced or what the cost of that would be.

David Stewart: It does not appear that any breakdown is provided in the financial memorandum of the cost to the Scottish Government as a result of the removal of the tolls. Could that information be provided in a written statement?

Chris Rogers: Sorry, could I ask for clarification? Are you talking about the removal of the toll booths or—

David Stewart: No, the financial costs to the Government of removing the tolls.

David Patel: Within the financial memorandum.

David Stewart: Yes.

David Patel: As I said, a whole stream of data underlying the financial memorandum has been provided by the boards. In many cases, that is the information that they were using anyway to project their own financial situation. We can make some of that information available to you.

The Convener: I give members one last reminder that they should have their mobile phones switched off.

Rob Gibson: The bill allows FETA and the TRBJB to retain their borrowing powers. Can you explain why that is necessary and how any new debts that are incurred would be repaid?

Keith Main (Scottish Government Transport Directorate): As David Patel said in his introductory remarks, the intention of ministers is to replace the toll income with direct grant, which would be in two tranches. There would be a revenue grant to replace the running costs and day-to-day maintenance and operation of the bridges and a capital grant, which would be part of an on-going dialogue with the two bridge boards. They are continually reassessing their forward capital programme for major works and maintenance.

Both boards project a 15 to 20-year capital programme and have on-going annual costs, so there is a known set of costs to deal with. However, each of the bridges is capital intensive and over the past three to four years both boards have engaged in major capital works programmes that had not necessarily been foreseen. Therefore, the view is that it is prudent to leave the borrowing powers in place in the legislation so that they can be used in exceptional circumstances in the future if that is necessary. The intention of ministers is that the boards should not need to borrow, and certainly not within the forthcoming spending review period.

Rob Gibson: So, barring contingencies, FETA will retain its powers to promote road user charging schemes. Why has the Government decided to allow FETA to retain that power while abolishing the tolls?

Keith Main: That question was put to the minister under the previous agenda item. The bill is very much focused on the abolition of the existing tolls on the two bridges. That is the commitment that ministers gave, which the

Government has given, and which was debated in the Parliament in May. The minister said earlier that he has not had time to consider the matter that you raise, but that he will consider whether it is within the scope of the bill. I would rely on the minister's answer.

14:30

Des McNulty: May I pursue the way in which the cost estimates were produced? I understand that, in effect, the grant will replace the toll income, but in a good year that income allowed FETA to do some tasks around the bridge as well as build maintenance. We hear that, because of the condition of the bridge, exceptional work will be required to deal with the corrosion problems. Do you have an estimate of the amount of money that will be required in the next five years to deal with the structural problems that have been identified? How will those be factored into your assessment of the grant that will require to be paid?

Keith Main: We do not have costs yet for cable augmentation or replacement. FETA is undertaking a number of studies and it published early reports on the potential for replacing or augmenting the main cables. Again, the bridgemaster will be able to say more about that, but work is taking place to take forward the next tranche of studies, which will assess what needs to be done and identify the costs of that.

The financial memorandum sets out a summary of the costs as we know them at the moment. However, it is inevitable that other costs will arise. That is part of the continuing dialogue that we will have with the boards.

Des McNulty: With my former finance hat on, I say that you already know that the assumptions on which you made the financial assessments are not true. You know that there will be significant costs associated with the process of dehumidification, the replacement of cables, and the exceptional structural circumstances. I understand that you cannot tell us the precise costs of those things, but it is clear that the amount that will be required from the Scottish Government's budget is significantly higher than has been identified—not necessarily the amount that is required for the removal of tolls, but the amount that will be required to maintain the bridge.

In the circumstances, rather than defining what you are doing so narrowly, would it not be reasonable to give the public a genuine assessment of what it will have to pay during the next two spending review periods to sustain the Forth road bridge in particular?

Keith Main: The financial memorandum aims to give a genuine best estimate of the costs as we know them at the moment. As I understand it, the

work that FETA is undertaking—its studies of the cables and structural issues—is unique work that is specific to the bridge. That undoubtedly brings costs, but it is difficult to estimate those at present in the financial memorandum. There is a possibility that estimates could go too far the other way.

Another issue is that, if the additional costs arose in the present circumstances and under the present legislation, they would still have to be met. There is a debate to be had about whether they would be met from long-term tolling, if that continued, or from additional grants from the Government, as has been the case in the past few years. In particular, the Tay Road Bridge Joint Board had grant funding from the Executive to support its capital programme in recent years.

Des McNulty: To be clear, FETA had borrowing powers so it was able to spread any exceptional costs that occurred in one year over a longer period of time and to anticipate future tolled income. In future, grant income will have to be paid out of the Scottish Executive's budget in any given year.

David Patel: That is not quite true. Because FETA will keep its borrowing powers and therefore will be able to borrow, it will have flexibility for the future.

Des McNulty: But it will have no income, other than what the Government gives it.

David Patel: Indeed, but it will be paid through grant over time, which means that the cost to the Scottish Government will be spread. Moreover, the dehumidification costs—which, I think, will amount to £6.6 million in 2008-09—are included in the estimates that are set out in the financial memorandum. Before we can go anywhere near estimating the costs of cable replacement work, we will have to wait for various studies to be completed and for FETA to take a decision on the matter. However, as I have said, flexibility will be available through borrowing.

The Convener: Again, some of those points will be pursued with our next panel of witnesses.

Rob Gibson: The bill removes the requirement under the Tay Road Bridge Order Confirmation Act 1991 for the joint board to repay its outstanding debts by August 2016. Why is such a provision necessary?

Keith Main: Again, it is partly to do with providing flexibility with regard to the bridge board's future funding. Quite a number of respondents to previous consultations and reviews on bridge tolling and the management of toll bridges had pointed out that the deadline set in the 1991 act for the repayment of debt was an anomaly and was not a condition in any other form of local authority or joint board funding. Having to

service that debt has become a real burden on the Tay Road Bridge Joint Board. As I have said, the bill envisages that borrowing powers will remain with the joint board, but if the deadline for servicing outstanding debts remains, those powers will become useless. I should also point out that the deadline for repayment was initially 50 years.

Over the years, the 2016 deadline has acted as a constraint on further borrowing by the board for major maintenance or any other costs and, as we come closer and closer to it, the board's ability to borrow has been nullified. To make sensible provision for the board's future funding, ministers thought it appropriate to include the provision in the bill.

Rob Gibson: It sounds like quite good news.

Shirley-Anne Somerville: Why does the bill revoke legislation relating to the Erskine bridge when the tolls on that bridge have already been removed?

Keith Main: Although the tolls on the Erskine bridge were lifted at the end of March 2006 through a suspension order and although the tolling powers expired at the start of January, the raft of Erskine bridge legislation is still sitting on the statute book. Ministers thought it appropriate to use a bill that seeks to abolish tolls to repeal that legislation.

The Convener: I thank the panel for taking the time to answer our questions. We might pursue certain detailed questions in writing with the minister.

We will take a five-minute break.

14:38

Meeting suspended.

14:44

On resuming—

The Convener: I welcome the second panel of witnesses—John Connarty, Alastair Andrew, David Dorward and John Crerar—from whom I invite introductory remarks.

Alastair Andrew (Forth Estuary Transport Authority): I am general manager and bridgemaster of the Forth road bridge, and John Connarty is a principal finance manager and represents FETA's treasurer.

The Forth road bridge is a unique structure that has unique requirements. It is important that we deliver what the Minister for Transport, Infrastructure and Climate Change wants in a way that safeguards the integrity of that vital link in Scotland's transport network. My two overriding concerns are the continuing safe maintenance of

the bridge and the welfare of the workforce, many of whom have served for many years. I urge the Parliament to seek clarity on the precise timing of the toll removal, which is vital if we are to plan for plaza remodelling works and to communicate with our staff.

We must face the fact that congestion will increase as a result of abolishing the tolls. Such an increase has been predicted by traffic modelling, most recently in the toll impact study, and we have witnessed the increase in traffic on the Erskine bridge. The current toll plaza performs an additional role as a control mechanism that regulates the flow of traffic on to the bridge. The booths cannot simply be removed; they must be replaced with a system that safely and effectively merges the five lanes of traffic that approach the bridge into two lanes.

We must also maintain effective control over traffic crossing the bridge, which is vital in managing overall loading and the movement of abnormal loads—there were 390 northbound abnormal loads last year. Occasionally, we have to close the bridge to deal with road traffic accidents, recover broken-down vehicles and manage other security issues.

FETA's experienced staff understand the bridge's unique maintenance requirements, which can be as simple as the use of glycol to de-ice the deck in winter, because of the corrosive effect of salt, or as complex as the installation of advanced dehumidification equipment on the main cable, to halt corrosion. Hand in hand with routine maintenance inspection goes a 15-year capital programme to refurbish and strengthen the bridge. As the Parliament seeks to replace toll revenue, it is vital that a flexible financing structure be established. We must be able to take into account the flexible and variable nature of the maintenance programme, which has peaks that can be covered through borrowing, as members have discussed.

The subject is huge and I cannot cover everything in two minutes. I urge members to come to the bridge and see it for themselves.

The Convener: Thank you. Members have questions on a number of issues, and I think that operational issues will come up later—I am sorry, I did not realise that John Crerar also wants to make an introductory statement.

John Crerar (Tay Road Bridge Joint Board): I am the bridge manager of the Tay road bridge. On my left is David Dorward, the depute chief executive of finance for Dundee City Council, who acts as treasurer to the Tay Road Bridge Joint Board.

The review of tolling on the Tay road bridge has been a long and protracted process, which has caused considerable stress and anxiety to board

employees. My staff and I are pleased that a decision has apparently been made and the process is drawing to a close.

The Tay road bridge leads traffic directly to Dundee city centre and is used mainly by commuters and local traffic. The joint board favours the removal of tolls, but it is keen to ensure that the bridge continues to be properly managed and maintained. The bridge has such a direct local impact that it is vital that local control and influence is retained over how it is managed and operated. The bridge has been well maintained in the past and it is essential that a flexible approach to future grant aid be adopted. A number of operational safety considerations favour the retention of the joint board for the local operation of the bridge.

Although there will be no toll collection, the bridge will remain a major transport link that requires a 24-hour, seven-day presence to ensure its effective operation. There are no hard shoulders or lay-bys for refuge on the Tay bridge, so traffic has to be stopped at either end to deal safely with breakdowns, accidents, the removal of debris and the day-to-day access requirements of board and contractor employees. Red flashing lights are currently in place to stop northbound traffic at the Fife end of the bridge, and a similar arrangement is proposed for southbound traffic at the Dundee end of the bridge immediately after the removal of the tolls and the toll plaza.

Staffing resources will still be required to operate the 24-hour, seven-day presence. The role of the current 20 toll collection staff—or bridge officers—includes not only toll collection but patrolling and securing the bridge. After the tolls are abolished, there will be a reduced number of bridge officer posts, but the reduction in posts can be accommodated, allowing for normal and early retirements, current vacancies and redeployment to other posts in the board.

The abolition of tolls on the Tay road bridge should ease the congestion in Dundee city centre during the evening peak period.

The Convener: Thank you both for your statements, and I apologise for being unaware that there were two.

I begin with a question relating to our earlier discussion with the Executive team on the absence of consultation. Given that there has been no consultation on the bill, what is your organisations' position on the proposals to retain, abolish or, indeed, reform and use differently tolling on the bridges?

Alastair Andrew: The Forth Estuary Transport Authority welcomes the decision to move ahead with tolls abolition.

John Crerar: Equally, the Tay Road Bridge Joint Board has supported the removal of tolls on the Tay bridge.

The Convener: Do you have any position on the earlier proposals on smart tolling, flexible tolling, and targeting multi-occupant vehicles?

Alastair Andrew: Again, convener, you are verging on the political decision. The previous Administration encouraged FETA to introduce a road user charge that had differential tolling by time of day and to introduce electronic tolling, which was the administration mechanism. There has been an election since then.

The Convener: So FETA has no position on that question.

Alastair Andrew: The current FETA administration welcomes the removal of tolls.

David Dorward (Tay Road Bridge Joint Board): The joint board also took the line that its preferred option was the removal of the tolls. On consultation, I should say that the local newspaper in Dundee, The Courier, carried an intensive news campaign that brought the matter to the public's attention. The board members and officers were at no point left unaware of the public's views on the retention or abolition of the tolls.

Alison McInnes: Currently, your organisations are effectively self-financing, but the bill will make them dependent on direct Scottish Government grant funding. What impact might that have on the operation of your organisations, particularly on long-term financial planning?

Alastair Andrew: Our current intention in discussions with the Executive is to ensure that we receive two grants—one for the on-going routine maintenance works and a second for our capital programme. It is the capital programme that possibly gives us the greatest concern because, by definition, it is irregular, which is why we are pleading for a flexible approach to be taken. In other words, the Executive should not give us the money one year and say that it wants it back if we do not spend it. We have a history of capital works being delayed due to weather. At the moment, we simply invest our income, and we can smooth out the peaks and troughs in spending. We are hoping for a similar robust funding mechanism.

David Dorward: The Tay Road Bridge Joint Board has a history of receiving capital grants from the Scottish Executive, mainly in the past three to four years, when we had a large capital project for which we simply could not borrow. Where capital works were delayed, we were paid capital grants in advance. The Executive allowed us to carry that funding forward because it knew that there was a delay from one year to the next. In addition, tenders for capital projects were

higher, so the Scottish Executive reviewed and increased the level of capital grant that it gave us. I believe that what we experienced, particularly on the capital side, will help us with our future capital planning.

The decision to leave the borrowing power as it is is equally prudent—it will help us to smooth out increases in capital expenditure in any one year and on the revenue side take away any uncertainty about toll increases or toll collections. We should be able to sit down and agree our revenue grant on a rolling, three-year basis, which will bring future forward planning back to the board.

Alison McInnes: You referred to the borrowing powers being left in place, but the Scottish Government states that they should be used only in "exceptional circumstances", which is a change. What would you consider as exceptional circumstances?

Alastair Andrew: The Forth Estuary Transport Authority has never required a grant. If the cable dehumidification were unsuccessful and we had to move ahead with a cable replacement programme, that would be an exceptional circumstance. Similarly, we are investigating the anchor chambers for the main cables, and if we found that we had a problem we would have to come back and seek further funding.

David Dorward: On balance, it is more likely that we would be slow in spending our capital grant than that we would need it in advance. As long as we can carry forward any unspent capital grant, we may never require to borrow. However, it is certainly nice to have such a lifeline and safety belt in place should there ever be an exceptional, unplanned capital spend in any one financial year. We know that we would not need to go back for a mid-year grant; we would have the opportunity and ability to correct the situation for ourselves.

Des McNulty: I hear what you say about the financial arrangements that you would like, but I am not aware of such financial arrangements in any other context. I think that there is an issue with Treasury rules, but, in particular, there is an issue about the financial capacity of the Scottish Government to allocate resources that are not spent.

Within the context of financial arrangements for other organisations, such as Scottish Water, you are in control of your own income and expenditure. However, you could be in a situation in which you would have to go cap in hand to the Scottish Government, which operates under a financial regime that is unlike the ideal regime that you just described. How would you then deal with exceptional circumstances? In fact, how would you deal with the predictable circumstances that may

arise with dehumidification and replacement cables? You would have to ask the Scottish Government to make a specific financial allocation, which it would control on an annualised basis. As I understand it, you would not get the kind of flexibility that you say is essential.

Alastair Andrew: We are aware that the Executive's spending review covers a three-year period. That is one of the problems that we are trying to resolve in our present discussions. Some of our contracts are for more than three years, so we must have commitments for such periods. We have suggested a model that is based on a commitment that a previous Administration gave to the City of Edinburgh Council when it was engaging in a 15-year public-private partnership scheme for schools. A long-term commitment was given to the council, and we have suggested that we would like to apply that model.

Des McNulty: So you think that a PPP-type arrangement would be the appropriate way to go forward. What would happen to the asset in such a circumstance? Who would own it?

Alastair Andrew: I will ask the treasurer to come in on this one.

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John Connarty (Forth Estuary Transport Authority): It is a good question. We are happy with the terms of the financial memorandum but, as it sets out, detailed discussions about the grant offer letter and the financial understanding between the authority and the Government now need to take place. Alastair Andrew is saying that we are looking for flexibility in capital grant carry-forward, which has no direct parallel with other authorities. We put the Edinburgh schools PPP offer of grant on the table as a possible long-term financial arrangement, but we do not consider it to be directly relevant. We are waiting for the Executive to come back with a proposal on how it will provide flexibility in grant funding. Police authorities and regional transport partnerships do not have that flexibility at the moment, which is an issue for them.

Des McNulty: I think that there will be public concern about—

The Convener: Des, I will give you one brief opportunity to pursue the point. Bear in mind the fact that the Finance Committee will want to take up some of the matters.

Des McNulty: There will be some concern about the suggestion that the flexibility under the new arrangements might require some part-privatisation or PPP-type arrangement, if that is what you are saying. Perhaps we can seek clarity on that.

I want to be clear about the borrowing regime that you are trying to put in place. We know that you have problems with the Forth bridge's structural integrity—the Tay bridge is different—which might cost substantial amounts to put right or to sustain that integrity, so you have the potential for requiring significant borrowings against an asset that the banks will only lend on if it can be properly secured—in other words, if they have a guarantee of a return. Where would the risk go in those circumstances? Would FETA expect the Scottish Government to underwrite the risk, or might the borrowing be against an unsecured risk? What would FETA's position be in that context?

John Connarty: The position is that we would need to see the Executive's detailed grant offer. There could be an issue with FETA approaching a lender, depending on the long-term funding situation. We are into a situation where there would be close consultation and regular discussions between Government officials and FETA, and I expect that lenders would be looking for assurances about the ability to repay.

To return to your point about private finance, we are not considering that option. We were looking for an example of a situation in which a local authority had a long-term financial commitment from the Government beyond the spending review period. The example that we found was a letter that the Government provided to the City of Edinburgh Council to confirm that grant would be payable to support a PPP project over that period. The model that we were looking for was a long-term commitment to a local authority.

Alex Johnstone: The previous panel of witnesses referred us in the strongest possible terms to you, the bridgemasters, as the people to answer questions about congestion. How accurate is the modelling that has been done so far on the increase in traffic that is likely to come with the removal of the tolls? What is the likely impact on congestion on and around the bridges, particularly the Forth bridge, which appears to give the most concern?

Alastair Andrew: My expertise does not lie in traffic modelling, which is something of a black art. I do not think that we can expect an increase like the one that took place on the Erskine bridge—there is simply not enough room on the Forth bridge to accommodate 23 per cent growth—but the transport model for Scotland, which is the Executive's programme, indicates that the current peaks will extend so that there will be longer queuing. The start of the peak might move from 7 am to 6.40 am.

Alex Johnstone: There was a good peak at 7 am this morning—I was in the queue.

Alastair Andrew: We also expect the troughs to start filling up, so that we will have a higher overall level of traffic throughout the day. If there is a significant increase in our traffic levels, the effect will be longer queues on the M90 from the north and the approaches from the south.

Alex Johnstone: Will the road developments that are nearing completion at the south end of the bridge have the effect of clearing traffic from that end of the bridge more quickly?

Alastair Andrew: They will indeed, as modelling has shown. We cannot remove the queueing on the motorway that develops from the Admiralty or Ferrytoll junctions, but the third queue—which is related to the capacity of the traffic lights at the Echline interchange—will disappear when the traffic finds its way on to the completed M9 spur extension.

Traffic heading north in the evening will still have to queue to get on to the bridge, because the delivery capacity of the approach roads exceeds the bridge's capacity. The throughput of the toll booths is already higher than the bridge capacity. That is why you will find a queue most evenings between the toll booths and the bridge—we actually process the vehicles at a higher rate than the bridge can accommodate, which is 3,400 vehicles per hour.

Alex Johnstone: Do you have proposals for managing northbound traffic entering the bridge?

Alastair Andrew: We are busy with our consultants on a scheme to develop what would look more like a motorway junction. At the moment, the new M9 spur extension has three lanes, but we will have to bring it back down to two. Traffic coming down from the Echline interchange will be reduced to a trickle anyway, and we will merge that traffic into the two lanes. As with the proposal for the Tay bridge, we will have to erect traffic lights so that we can halt traffic in emergencies and allow the movement of abnormal loads, which happens two or three times a day. When there are accidents or overturned lorries, that is how we get the emergency services in.

Rob Gibson: The toll impact studies predict increased traffic congestion over the bridges at peak periods, but you have just said that the Forth bridge cannot take any more.

You have been asked a number of questions by Mr Johnstone about access. You said earlier that the toll plazas act as a kind of traffic control. What will it cost to control the increased traffic, and what will be the impact on the operation of the bridge?

Alastair Andrew: We are not planning to introduce any means of controlling the traffic. The traffic will control itself; once the bridge reaches peak capacity, the queue starts to form. What we

are saying is that the queue will become longer. All that we can hope to do is to introduce sufficient controls—traffic lights—so that we can stop the traffic when we require to do so.

Rob Gibson: Will that cost a lot more than running the plaza system?

Alastair Andrew: The plaza system was developed with the consent of the previous Administration. We will have to take it out and put in a new road layout that it is estimated will cost approximately £1.5 million.

Rob Gibson: That will be an extra cost on top of the cost of the plaza that you are still paying off. In running the plaza, how long would it take to pay off the £1.5 million?

Alastair Andrew: The current electronic tolling at the plaza has been paid for through our own self-financing mechanisms. The cost of developing the new road layout is to be met by the Executive, as is the cost of any redundancies resulting from these decisions.

Alison McInnes: I want to explore the new road layout a bit further. What opportunities are you considering in relation to passenger priority measures? There is a unique opportunity to give priority to buses on the bridge. Have you considered that, and have you worked out the costs?

Alastair Andrew: The south-east Scotland transport partnership is pursuing a scheme to promote northbound bus priority. We have undertaken to ensure that nothing that we do on the plaza will prejudice the SESTRAN scheme. Indeed, we are looking to include a short length of bus lane on the Echline slip road. The proposal is that buses would leave the new A90, go up and over the Echline interchange, go down to the bus stop on the west side of the plaza, and then merge back into the traffic. That may require a short length of bus lane, and we would hope to submit our cost estimates for approval.

Alison McInnes: Will that be funded by the Executive as well?

Alastair Andrew: We hope so.

The Convener: I would like to hear from the Tay Road Bridge Joint Board about these issues. I am aware that we have heard a great deal from the Forth Estuary Transport Authority, but less from the Tay bridge board.

John Crerar: I, like Alastair Andrew, cannot comment on the projected increase in traffic in the models, because I am not an expert on models. However, the model seemed to talk about a general increase in traffic on the bridge. At the moment, the bridge is not congested, but some congestion does happen, particularly during the

morning peak and evening peak when traffic is leaving the city centre and going through the tolls. When the tolls were removed during the one-day strike last year, the traffic flowed fairly freely that evening. We anticipate that the congestion in the evening peak will be relieved. The bridge has the capacity to take much more traffic, so it will be many years before the bridge becomes congested, unlike the Forth bridge, which is already congested.

The Convener: Are you considering issues around merging different traffic streams and putting in place new systems to manage that?

John Crerar: Yes. I said in my opening remarks that the toll plaza provides a means of regulating traffic on the bridge and stopping traffic to deal with accidents and emergencies. When the toll plaza is removed, we hope to replace it with traffic islands and red flashing lights for two lanes of traffic. In normal circumstances, the traffic will just flow straight across the bridge, but if we have to stop it in an emergency, we will have the facility to do so.

David Stewart: We heard earlier that road modelling might be a black art. Whether it is or not, it seems likely that both bridges will see a lot more traffic following the elimination of tolls. Have you budgeted for increased maintenance? What effect would there be on bridge operations?

John Crerar: I do not see that being a problem for the Tay bridge. The bridge has been well-maintained. Even if the traffic on the bridge doubled, it would not particularly affect the condition of the bridge structure.

David Dorward: Tayside house is at the end of the bridge, so we are able to monitor the bridge 24 hours a day, seven days a week. We have a video of the 24 hours during the strike that John Crerar mentioned, when there was no noticeable increase in congestion—in fact, there was a considerable improvement in congestion in Dundee city centre. The local models that we have produced, which deal with north-east Fife and Dundee, produce a totally different answer from that in the national model. We believe that the localised model is far more representative of what is likely to happen when the tolls are taken away.

In answer to Mr Gibson's question, the cost of removing the toll booths at Dundee would be £100,000, which the Executive has already said that it will fund.

Alastair Andrew: Someone asked earlier whether the increased traffic on the Forth road bridge would hasten the introduction of a heavy goods vehicle ban. The answer is no. The predictions indicate that there will be an increase in light car traffic, which has no effect whatever on our maintenance regime. The governing factor is

the rate of corrosion inside the main cable and the number of large heavy goods vehicles. That is unlikely to change, because we are advised by our contacts in the Freight Transport Association that by far the biggest costs in running a truck are driver's time and fuel—the toll does not feature. I do not think that we will see an increase in HGVs on the bridge, so I have no concerns about hastening the introduction of a ban on HGVs, which would be necessary only if the dehumidification system that we are fitting were to fail.

Des McNulty: I am interested in Mr Andrew's response to a previous question, which was that, in effect, the controls would come off and the traffic would find its own natural level once the tolls had been removed.

You have said that the bridge is full at peak periods. Given that you have difficulty controlling the traffic at present, even with the enhanced controls that the toll system gives you in dealing with accidents or with instances of transport congestion that cause unusual problems, such as the presence on the bridge of very slow-moving vehicles at peak periods, once the control is the jam—which will inevitably be there, if I understand what you are saying—and there is an accident on the bridge, do you have any estimation of the length of delay that we might be looking at? I presume that you have estimates of the delays that can be caused now, when you can control access to and egress from the bridge. What will the situation be when those controls simply disappear and you have difficulty getting fire engines or ambulances on to the bridge, for example? In such circumstances, how long can people expect to be sitting in vehicles?

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Alastair Andrew: A parallel can be drawn with the situation that exists at present with the road works on which we are engaged over the weekend. On Saturday and Sunday, we recorded delays of up to 90 minutes for vehicles approaching the bridge, which was simply because we had only one lane open. That demonstrates that if the demand on the structure is higher than its capacity, the queues will lengthen, but that will not affect our response to emergencies because we can control the traffic on to and off the bridge at both ends and can allow the emergency services to use the closed lane to reach an incident, if necessary. Having longer queues does not, in itself, give us a problem in operating the bridge.

Des McNulty: Let us be clear—abolishing the tolls will lead to longer queues, longer delays and longer travel times.

Alastair Andrew: Even if the percentage in the modelling is wrong, any increase in traffic will result in the queues becoming longer, as regular commuters know.

Des McNulty: Will the extra delay be an hour or several hours?

Alastair Andrew: It is impossible to say. There was a straightforward rear-end shunt this morning, which caused a one-hour delay. Along with many others, I joined the queue at Halbeath. That delay arose simply because two cars were driving too close to each other and had a bump.

The theoretical congestion limit has been put at 30,000 vehicles per day, but 37,000 vehicles use the bridge on every day of the week, which leads to turbulent flow. Simple breakdowns or bumps lead to an inordinate queue, which is why we have our own recovery vehicles at the bridge.

Des McNulty: I just want to clarify that even the marginal increase in traffic that would be associated with the removal of the tolls could create severe increases in delays. The amount of traffic that uses the bridge is not proportional to the increase in delays, which can last for hours. Removal of the tolls could mean that getting across the bridge on the way from Edinburgh to Fife or from Fife to Glasgow, which could take up to an hour on a good day at present, could take significantly longer every day.

Alastair Andrew: There will be an increase in delay if there is an increase in traffic, especially at peak times.

Shirley-Anne Somerville: In one of your earlier answers, you mentioned the bridge's structural integrity and the possible time limit on the continued use of the bridge by HGVs. The issue was discussed at length with the previous panel and, in response to many of our questions, we were referred to you and your colleagues. I seek further clarification on the bridge's structural integrity. Can you provide more detail, to deal with some of the questions that were asked earlier?

Alastair Andrew: We have no concerns whatever about the bridge's structural integrity. We recognise that there is corrosion in the main cables, but we are monitoring the cables by means of acoustic devices. We have started on a programme of dry air injection into the cable. If successful, that will stop the corrosion.

We are aware of the safety factor on the bridge, which we keep under observation. By ensuring that the safety factor remains above 2, we are fairly comfortable that we will have no structural problems. HGVs tend to come along at off-peak times to avoid the cost of having a vehicle and its driver sit in a queue. Unfortunately, a convoy of heavy goods puts a more critical loading on the

bridge. We monitor the loads on the bridge and must carry out an assessment of our loading every two years. The loading is currently twice the design loading, but we have that under review.

The Convener: Are there any other maintenance issues, relating to the potential increase of total traffic or the extension of the peak period, that must be considered in financial terms for either bridge?

Alastair Andrew: We have a rolling 15-year capital programme, which forms the basis of the financial memorandum—albeit only for a period of four years. The painting contract that we are planning is a £65 million project that will take place over 10 years, so we must have more certainty of our ability to meet that expenditure when we start the contract.

John Crerar: An increase in traffic on the Tay road bridge would not have any effect on future maintenance. Historically, maintenance of the bridge has been to do with environmental problems with salt, ice and the weather, as well as with previous workmanship. We do not anticipate any change to that programme as a result of any alleged increase in traffic.

Des McNulty: I understand that the corrosion was a recently discovered circumstance and that the measures that you are taking are quite innovative—they have not been tried and proved successful anywhere else. I presume that, in talking about risk factors, you are talking about what you know about, which is not something on which there is a substantial amount of evidence.

Alastair Andrew: We went into the main cable to examine it as a result of the first ever code of practice on suspension bridge cable inspection. As far as I know, we are the first people in the world to have done that work. We identified broken wires inside the cable at the positions at which we inspected the cable. To give us an assurance that there are no other areas of cable that are quietly corroding, we have fixed 15 microphones to each cable, which are giving us a permanent health check on not only the rate but the exact position of wire breakage. We can monitor where the wires are breaking and make a structural assessment.

We visited Japan and learned about dehumidification. The system that we are applying is more advanced than those that are being used anywhere else. We are constantly trying to keep ahead of the game.

Des McNulty: At one level, there is no certainty because the circumstance is new and new technologies are being used to eliminate or minimise the risk. We are at the edge of engineering.

Alastair Andrew: That is correct. The Japanese, for example, are using dehumidification as a preventive measure. No one else has realised that they had a problem and used dehumidification to correct it—we are the first to do that. Although we are all confident, we can give no guarantees, and that is what has concentrated your minds on the need for another crossing.

Des McNulty: In the context of managing risk, do you think that there is an issue about a change of circumstances that might give rise to new or additional strains on the bridge, bearing in mind the underlying structural uncertainties?

Alastair Andrew: That is what we do—we manage risk, and we use the best tools available to us to ensure that the risk is minimal. We have put in place all the security and monitoring devices that we require to minimise any risk.

Des McNulty: The issue is that the Government might be increasing it.

What plans has your organisation made to support toll collecting staff who may lose their jobs following the abolition of the tolls on the bridge? Do you see any scope for additional support from your organisation or other governmental organisations to assist those members of your staff who are in that situation?

Alastair Andrew: The authority has introduced a staff support policy that concentrates not only on redeployment—which is the first avenue—but on training, advice and counselling and, as a last resort, a redundancy package that is up to the maximum that can be applied under the local government pension scheme. We have discussed the matter with the minister and he is comfortable with the inclusion of all redundancy costs in our application for additional funding from the Executive.

We have a permanent staff of 104. We have not finalised the new structure, but the number could be reduced by between 35 and 40. It is sufficient to say that our staffing includes more than toll collection staff. For example, we have 10 administrative staff who administer the eTag electronic tolling system. The proposal will have a knock-on effect on a great number of people, not only those who are employed in our toll booths.

Des McNulty: I have had quite a lot of e-mail communication from people who work on the Forth road bridge, and less from those who work on the Tay bridge. People have expressed grave concerns about their circumstances and the plight in which they find themselves as a result of the policy decision. When the Executive introduced the process, did it include the requirement to consult staff or to explain what was going on? Was there any communication between the Executive and your organisation on the position of staff who

would be affected, or on what you might be expected to do about that?

Alastair Andrew: By monitoring what was happening in the Parliament, we saw the writing on the wall so we pre-empted discussions with staff and prepared the staff support policy for the board. In that way, measures were put in place before the formal debate in the Parliament, when it became clear that the tolls would be removed,

Des McNulty: But you heard nothing at the time from the Government?

Alastair Andrew: We are in constant contact with the Executive, so we were able to seek advice and check that our assumptions were accurate.

John Crerar: As far as the Tay bridge is concerned, we have drafted an employee support package that has been passed to the unions. As soon as we saw the writing on the wall, we held early meetings with the unions—that process is on-going and is now taking place in conjunction with our meetings with the bill reference group, the members of which are being kept fully informed on the staffing situation.

We are not in the same situation as the Forth bridge; we have 20 bridge officers who will be affected. We have 47 staff, but the new establishment will number 36, which means a difference of 11. Those 11 staff can be accommodated by way of either early retiral or redeployment in the organisation. We hope that there will be no redundancies at the Tay road bridge.

Cathy Peattie: Given the role that staff play in traffic management and the skills that they bring to the smooth running of your operation, is there any danger that those important skills could be lost when staff numbers start to be reduced?

Alastair Andrew: No. Each staff member has a distinctive role to play in the operations department. There is tolling, but there is also traffic management, winter maintenance, de-icing and breakdown recovery, all of which is done by separately trained teams. Our intention is that those teams will not suffer. In fact, we may have to boost the teams, given that we will no longer have flexibility in using those staff in our booths during quiet periods.

In effect, we started with a clean sheet and asked what would be the best way of running the Forth road bridge in the context of there being no tolls. We are busy negotiating with the unions and staff on the best way forward.

Cathy Peattie: Do you envisage a situation in which staff will be given training and support to enable them to move to another aspect of work?

Alastair Andrew: All those aspects will be examined, particularly on the traffic management side. We will try to minimise redundancies in toll collection staff, particularly given the need to boost traffic management, breakdown recovery and security patrols. We are concentrating on redeployment before looking towards the ultimate, which is redundancy.

John Crerar: On the Tay bridge, some staff told us that their preference would be for a move to the maintenance side of the operation. We introduced them to that scenario and, having seen it on a daily basis, they remain keen to progress that side of the work. They will be given training in various matters, such as boat handling, driving our inspection gantries and rescuing people from the river. That is one way in which we have dealt with the removal of the tolls.

As I said in my introductory remarks, the toll collectors on the Tay road bridge, as well as collecting tolls, deal with patrols on the bridge and securing the bridge. Therefore, removing the tolls will remove only part of their job. They will continue with their existing work, so no retraining will be required for that.

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The Convener: I thank all four witnesses for giving their time to answer our questions. In Alastair Andrew's introductory remarks, he suggested that we go and see the bridge for ourselves. I will ask the clerks to explore the possibilities of that.

I welcome our final panel of witnesses, who are Stephen Boyd of the Scottish Trades Union Congress and Sandy Smart of the Transport and General Workers Union and Unite. I will kick off with an easy opener that I have fielded to pretty much all the witnesses. No public consultation as such has been held on the bill, although much attention was given to the issue during the election campaign. What direct consultation has taken place with the staff members who are likely to be affected by the changes or with their union representatives? Were staff views taken into account in drafting the bill from the policy intention?

Sandy Smart (Unite): There was no consultation. The removal of the tolls was announced in the Parliament and that was the start of the process.

The Convener: There was no contact between the Government and the staff or unions.

Sandy Smart: I wrote to the minister to ask whether we could meet him because, as you might imagine, there was a lot of concern about the proposals. We had some discussions with the

management of FETA about what was likely to happen when the bill came before Parliament and about the employee support policy, which you heard about earlier. We tried to put together a policy because, when the bill is passed or when the tolls are abolished, we will almost inevitably end up with redundancies and we had to consider how to deal with that. However, there are several unanswered questions about the maintenance of the structure and traffic management. On that basis, we approached the minister, but he would not meet us.

Stephen Boyd (Scottish Trades Union Congress): I do not know whether this answers your question directly, convener, but I must say that I find myself in a strange situation. Usually when I come to a parliamentary committee, I have submitted substantial written evidence beforehand and the STUC has a clear position on the matter. However, it is only fair to inform the committee that today I come with no position: the STUC has never taken a position on the abolition of tolls and we have never been asked to do so. That can be contrasted with our support for a new crossing over the Forth, on which local trade unionists campaigned for the STUC to take a position. Subsequently, a motion was put to our congress two years ago to ask the STUC to support a new crossing over the Forth, which we did.

It is fair to say that we have seen no sign that the abolition of tolls is a priority for local trade unionists. No local campaign has been run. We can contrast that with the position on the M74, which I have discussed with the convener in the past. The STUC ended up supporting the completion of the M74. Its support stemmed from local issues with investment in workplaces—some of the big engineering workplaces around Glasgow had built into their investment plans the completion of that motorway, so the clear position from our affiliated trade unions was that the motorway had to be completed to save important manufacturing jobs around Scotland. None of those issues applies to the abolition of tolls, which has not been an important issue for us.

Cathy Peattie: My question is for Sandy Smart. Does your union support the abolition of tolls on the Forth and Tay road bridges? Will you explain your union's views?

Sandy Smart: To be honest, the issue was never discussed. The worry is about the staff—they are my concern and that of our branch officials. People are worried about their jobs, and that is a bigger issue than the £1 toll fare. Road congestion is an issue for people who travel from Fife to Edinburgh, but that has nothing to do with the tolls, which are charged on traffic that goes in the other direction. In all honesty, we had not

thought much about abolition and I am not convinced that it was a huge issue.

Cathy Peattie: Do you share my concern about the workforce not being consulted? It is worrying that the minister has not agreed to meet trade unionists. What is the general view of folk who work in related jobs?

Sandy Smart: Morale among staff on the bridge is extremely low. The staff who collect tolls and who are involved in administration are more or less resigned to the fact that many of them will lose their jobs. Staff who are involved in maintenance are equally worried about what will happen down the line. It is feared that, in a couple of years' time, the whole organisation will be privatised and the work will be put out to tender. What would happen to staff then? As the committee heard from the bridgemaster, a policy is in place to support staff who are made redundant. We supported that policy. If FETA is disbanded or privatised in two or three years' time, there is no guarantee of what will happen. That is the real question. We have tried to obtain answers, but nobody has been able to answer. I hoped to meet the minister and put that to him, but we have been unable to do that. The question is still unanswered.

Cathy Peattie: People who have skills that will be required in the future are concerned about their jobs. Will the loss of necessary skills be an issue?

Sandy Smart: People are extremely worried. They have much experience in dealing with the bridge and with traffic problems. We believe that those skills will be lost.

Cathy Peattie: What concerns have you heard from individual union members about the proposed abolition of tolls?

Sandy Smart: As I said, people are more or less resigned to the fact that tolls will be abolished, although they do not know when that will happen. We know that Parliament will consider the bill, but there is no hard-and-fast date when tolls will be abolished, so we cannot consult about redundancies or redeployment.

The situation is up in the air. Branch officials have advised me that they are regularly asked what is happening and whether there is any word about dates. The effect on morale is huge. When I have dealt with such situations in other organisations, people have wanted to leave, rather than have the threat hanging over their heads. The staff do not know whether they will have a job by Christmas or whether they have until next year. That is unsatisfactory.

Cathy Peattie: What would be the STUC's view of any company or organisation that talked about a change like the abolition of tolls and about

reducing the workforce without consulting it or involving it in plans? Does the STUC have a role as a stakeholder? What would its view be of any company that carried out its plans in such a way?

Stephen Boyd: You will not be surprised to learn that the STUC would take a pretty dim view of such a company. A few issues are involved. If the minister had agreed to meet staff, he would have found such a meeting useful, because in our experience, staff tend to raise issues that other stakeholders have not considered. That is stating the obvious. The minister would probably also have been able to put staff at ease on issues that Sandy Smart has raised. A meeting would have helped to stop unhelpful speculation about what could happen to them.

In general, our experience under devolution is that ministers have tended to meet staff who are in such a position, even staff from the private sector, where ministers' influence is clearly limited. Ministers have tended to meet staff for the reasons that I have outlined and both parties have tended to find such meetings beneficial.

Earlier, I asked Sandy Smart whether the local partnership action for continuing employment team had been involved. It has not been to date. The STUC campaigned strongly for the PACE initiative to be established, but the aspiration was always that there would be early intervention that would help to redeploy people as quickly as possible. The team would get to grips with local issues and redeployment opportunities. I am worried that a team has not been involved.

Cathy Peattie: So there has been no input at all from a PACE team. That is worrying.

Rob Gibson: You told us that you have not discussed likely developments for staff with the Government, but I presume that you have discussed them with the employers, FETA and the TRBJB. I am sure that the Government will hear what you have said. Given what we have heard from FETA and the TRBJB, what discussions have you had?

Sandy Smart: We have attended several meetings with FETA's management in which the employee support policy and what is likely to happen were discussed. Proposals were put forward to the board and passed, but little has come back following that, as I have said.

We have asked questions about what will happen to the traffic management and bridge maintenance sides. We hope that there will be something other than warm words and that something will be in place to deal with matters. It is likely that there will be some organisation, but we have a fear. If FETA's main function is to collect tolls and that function will be removed, what will happen now? Who will look after the people whom

we are talking about? Are people still needed? Will work go to the private sector?

Rob Gibson: I am interested in that allegation. What foundation is there for believing that the Government may move in that direction? Is there any indication whatsoever in the Government's programme or the Scottish National Party's election manifesto that there will be such an outcome?

Sandy Smart: No, but it would be interesting to meet the minister and ask him those questions. I received a curt letter from his secretary. He refused to meet me. I do not have a problem with his not wanting to meet me but, given that his department is involved and that he will make the decision, the workforce deserves an opportunity to put its concerns to him. As Stephen Boyd said, it is rare for someone who is deciding whether to close a factory or a site to refuse to sit down and talk to the workers or their representatives. That is what I am concerned about.

Rob Gibson: Okay. I hear the point that you are making, but have FETA and the TRBJB fully explored the possibilities for redeploying the staff who may be affected by the proposed abolition of the tolls?

Sandy Smart: One difficulty is that Tay bridge staff cover both traffic management and toll collection, but work on the Forth road bridge is more separate and specialised. There are people who deal with the tolls, people who deal with maintenance and a separate group that deals with the traffic side. It is unlikely that all those people will be redeployed elsewhere. That is my difficulty, although, as I have said, we are still looking at things. To be pragmatic, I think that it is highly unlikely that we will be able to keep around 50 to 60 people in jobs as toll collectors.

15:45

Rob Gibson: Indeed, but, in terms of redeployment, the bridge authorities have suggested that some other duties might be required. Have you discussed anything like that?

Sandy Smart: Nothing has been discussed along those lines. As I said earlier, we have only just heard that that is an option. The employee support policy has been put in place and has been agreed. I am aware that the fact that it was put in place was not universally popular in the Parliament, but that is the case and that, at least, offers some comfort for the staff who might end up being made redundant.

Rob Gibson: You mentioned the Parliament. I am not sure what that has got to do with your relationship with the employers and the package that has been put in place. When the employers

are surveying the work that will be created in relation to traffic management in the new set-up, without tolls, they might take the view that there is a potential for staff whom they currently employ to be deployed in that regard. Do you agree that that is something that you should follow up?

Sandy Smart: That might be possible for some jobs, but it is highly unlikely that it will be possible to redeploy all the staff. We have discussed that with management and believe that redundancy is inevitable.

Stephen Boyd: On the privatisation issue, we were not making an allegation that privatisation would occur; we were speculating that that could happen. The workforce's concern is that FETA will no longer be a sustainable organisation. The experience of trade unions over the past 20 years is that, in this type of situation, the privatisation agenda tends to come into play, with the related impact on jobs and terms and conditions and so on. That gets to the heart of why an early meeting between the workforce and the minister would be helpful to all parties; it could help to assuage the concerns of the workforce.

Rob Gibson: You would agree that the bridge is part of the main road network of Scotland and that it is unlikely that a proposal would be made to privatise any part of the main road network in Scotland?

Stephen Boyd: Absolutely. I was—

The Convener: I think that we have had a clarification of what was intended by the earlier remark. Dave Stewart, you may ask your question.

David Stewart: Are you satisfied with the proposed redundancy payments for members who might lose their jobs? Earlier, we heard about the differences between the situation on the Tay and the situation on the Forth. We have also heard about the staff support policy, the advice and guidance and the local government agreement on the maximum redundancy payments. Is timing crucial for you? Presumably, your members need to know when any change will happen.

Sandy Smart: I have no objection to that policy. I would like to put on record the fact that I would not fault the management for putting that together—I did not mean to give the impression that that is not the case. We are glad that the policy is in place. However, as I said earlier, we are worried about what will happen to those who will not be supported and get redundancy payments. Where do they stand?

David Stewart: Is the timing, therefore, crucial?

Sandy Smart: Absolutely. We need to know when it is going to happen. As I said, members regularly ask our branch officials what is happening and when they can take their

redundancy. At this point, however, we just do not know.

Des McNulty: With regard to what you said about trade unions' experience over the past 20 years, I am sure that you are aware that a lot of the road maintenance in Scotland is now conducted by private companies. In that context, is it not perfectly reasonable to assume that you might end up, four or five years down the line, with BEAR, Amey or some other company being interested in taking on the responsibility for maintenance of the bridge and the Government being interested in handing over that responsibility?

Stephen Boyd: Absolutely, that is a concern. Sandy Smart deals with those companies every day and might want to say something more about that.

Sandy Smart: I deal with BEAR and I dealt with Amey when it took on the contract for the south-east roads network and staff were transferred under the Transfer of Undertakings (Protection of Employment) Regulations. The fear is that if the bridge is treated as part of the trunk road network, responsibility for its maintenance will be similarly transferred to such a company. We worry that, in the event of a transfer, existing staff would lose their terms and conditions. There is a certain amount of legislation to protect them but, with time, terms and conditions tend to go. At the moment, a pensions scheme and a sickness scheme are in place. Those could well be at risk if maintenance of the bridge were privatised.

Des McNulty: We have focused on employment conditions and so on. However, the employees of FETA—there is not so much contention about the TRBJB—are among those with the most knowledge about how the system works. We have heard from the bridgemaster, who has offered us his experience, but FETA's other employees also have considerable experience. What is their view of the logic behind what the Government intends to do, of its potential consequences for traffic management and of the increased congestion that could be generated? What problems might that create for them when doing their jobs?

Sandy Smart: You are right about the staff's experience. Many of them have many years' service with the organisation; they know the bridge and are aware of the impact that the weather can have. At a branch meeting that I attended soon after it was announced in Parliament that tolling would be abolished, a toll collector asked whether the Forth road bridge would end up in the same situation as the Erskine bridge, which is closed whenever the wind blows at speeds above 50mph because staff do not have the experience to deal with that. We are dealing with an important structure. If the people who are looking after it do

not know how to operate it properly, that is a real risk.

The Convener: The committee has taken note of the concerns that you have expressed about the lack of a meeting with the minister, the short-term timescale and the longer-term uncertainty that exists. Are there other issues that you would like to raise in relation to the employee support policy or more generally?

Stephen Boyd: I would like to raise a couple of general issues. On the way here on the train, I read the previous debates on the issue in Parliament. Two main reasons seem to be given for abolishing the tolls. The first is fairness. There is certainly an argument to be made on that point, as Fife has two toll bridges, whereas tolls have been removed elsewhere in Scotland. The second reason is competitiveness. That argument is somewhat bizarre, because if we remove the revenue stream that comes from tolls, we will have to move to grant support. A very conservative estimate is that, over the next comprehensive spending review period, £30 million will have to be provided. If you had that money to spend and were looking to boost the Fife economy, you would not use it to abolish tolls.

Shirley-Anne Somerville: Is that the official STUC position? You said at the start of the session that the STUC did not have a position on the abolition of tolls.

Stephen Boyd: It is not congress policy. It would be inappropriate for me to speculate on the STUC's position on the matter. I would be happy to take the issue to our general council, if the committee would find that helpful; that could be done within the committee's timetable for evidence gathering. This is an economic development issue that relates to the wider agenda on taxation and regulation that we have pursued in the past. It is not the case that this tax on businesses in Fife is rendering them uncompetitive. If we spent the money that is to be used to abolish tolls on skills, innovation, local infrastructure and developments such as the Fife energy park, we would see a far bigger boost to the Fife economy. The STUC's final position is likely to reflect those wider concerns.

Cathy Peattie: Correct me if I am wrong, but I suggest that the STUC will have a position on how the workforce on the bridges has been treated and on the need to consult the workforce and ensure that important skills are not lost.

Stephen Boyd: Yes, absolutely.

The Convener: I thank the witnesses for taking the time to come and answer our questions.

Abolition of Bridge Tolls (Scotland) Bill (Witness Expenses)

15:55

The Convener: Under standing orders, committees may arrange for the payment of expenses incurred by witnesses. Do members agree to delegate to me the responsibility for doing that?

Members indicated agreement.

Budget Adviser

15:56

The Convener: The committee has briefly discussed the appointment of a budget adviser. Members have a paper on the issue and a draft person specification. We are asked formally to agree to appoint a budget adviser to assist us in our scrutiny.

Rob Gibson: Convener, are you content that the specification is wide enough to attract the kind of candidate that we seek?

The Convener: Let me first take the committee through the decisions that we need to make. We will talk about the specification in a moment. Do members agree to appoint a budget adviser?

Members indicated agreement.

Des McNulty: It would be helpful if the specification included the requirement for the subject committee adviser to work within the advisory structure in the Parliament and in particular to work with the adviser to the Finance Committee. In general, advisers collaborate with one another—that has certainly happened in the past.

The Convener: That is specified in the paper, in the final point under "Adviser duties".

Des McNulty: It is not included in the person specification, which is what I was looking at.

The Convener: Are members content that we look for someone who can focus on road and rail transport?

Alex Johnstone: Given that a climate change bill will be introduced, it might be necessary in future to appoint a person with a wider brief.

Rob Gibson: Or someone else.

The Convener: Yes, indeed.

Des McNulty: We do not have to have just one adviser. We might appoint an adviser on budget issues and an adviser on the climate change bill.

The Convener: That is quite possible. For clarity, I should say that we are considering the appointment of a budget adviser for the forthcoming budget process. If members have no more comments on the person specification, I will ask the clerks to submit the paper to the Parliamentary Bureau and request approval to proceed.

That concludes the formal meeting. I remind members that we agreed to have an informal discussion after the meeting, about other matters.

Meeting closed at 15:58.