Q41 Mr Bacon: But hitherto they were advising you, the DFT.
Ginny Clarke: They were advising us on design aspects. It was October 2009-I have just been passed a note. That's when Balfour Beatty took over Parsons Brinckerhoff, and at that point we said that Parsons Brinckherhoff couldn't work for us any more in the joint venture that was supporting us rather than supporting the contractor. That's when we asked for them to be removed from the joint venture.
David Finlay: I just want to clarify this evidence. Ian Scholey, who was the senior responsible officer, is working for a firm that was one of the advisers at a particular point in time, but is now owned by one of the contractors to the project, so he is within a group of companies that is actually Balfour Beatty-
Chair: Which is still working on the project.
David Finlay: It is a major shareholder.
Q42 Chair: It owns 40% of the project. So the senior responsible officer goes off and works for a consultant, which is then taken over by a company which is getting 40% of the deal.
Graham Dalton: The SRO was a senior civil servant and went through Cabinet Office clearance prior to leaving, and as part of the deal the arrangement was that he would be working on rail for a consulting engineering firm. After he left, that consulting engineering firm was bought by Balfour Beatty.
Q43 Joseph Johnson: Has anyone checked whether he is working on rail projects?
Graham Dalton: We know that he is working on rail projects.
Q44 Joseph Johnson: Exclusively?
Graham Dalton: Yes.
Q45 Chair: Why. Because he is advising you on those, is he?
Graham Dalton: It's not highways. He went to work on rail.
Q46 Chair: Is he advising you on those?
Graham Dalton: No.
Q47 Chair: He is not advising the Department.
Graham Dalton: I can't answer for the Department, but I think it unlikely.
Q48 Chair: Is he advising the Department on rail projects?
Martin Capstick: I can check, but I am not aware of that.
Q49 Chair: Can we have an urgent note on that? I think we should write to the Cabinet Secretary, because it is not right.
We have had a week of this, I'm afraid, so you're coming at the end of a week of really depressingly awful reports on projects. I asked you last time what you would do differently. You've had a fortnight to think about it, and perhaps you would now give us an answer.
Graham Dalton: I think what you were talking about was what we would do differently on the programme, and there are three areas that we would look at doing differently. One is that at the early stage of the procurement, when the project started in 2004, we did a lengthy consultation with both the construction markets and financial markets, before going on to confirm the nature of the procurement and how it would be packaged and go out. There is a question about whether we could just have taken a view and put together a procurement without doing the market consultation.
The second thing we could have looked at was that, rather than asking the bidders to come back with bids and then have a finance competition, which would have meant going to the market for the finance only once, we could have asked bidders to arrange finance during the bid process. That would have meant a shorter period post-competition for financing.
A third area we could have looked at and we picked out in our lessons learned was to look again at whether to restrict the size of the tenders that come back. There were something like 30,000 pages in each tender document, and if there are three tenders, that is a lot of material to be gone through. That is one of the areas that took us longer than expected. Each of those first two actions were, in the view at the time, to take risk out of the procurement and make it run more smoothly.
Q50 Chair: Let me put to you a number of things. I am sure that my colleagues will add to them. Why did this take so long in the first place? You decided in 2000 to do a consultant's report. Who was the consultant, just out of interest?
Graham Dalton: Kellogg, Brown and Root.