Project Progress Report, March 1st 2005
At the Scottish Parliament's Finance Committee meeting held on March 1st 2005, Robert Brown MSP opened his report as follows:
"Today's [project progress] report shows a fairly static situation with no change in the reported overall cost, which reflects the fact that only one package has been settled since the most recent report. I think that I am right in saying that another 17 or 18 packages have been agreed and await finalization of paperwork, which will obviously be reflected in the next report. Members will note that the defective windows have been replaced at the contractor's expense, which I think was reported previously in anticipation of its happening.
I will mention two other matters. First, snagging work is well advanced and I understand that the architects should be able fairly soon to issue the certificate of practical completion. The committee will be aware that issuing of that certificate is an important technical stage because it affects determination of the key date from which retention periods will run.
Secondly, the committee will recall that the contract for landscaping was originally a separate Scottish Executive contract, which was eventually transferred with the main contract to the Scottish Parliamentary Corporate Body. Landscaping has been affected by prolongation costs, as were other parts of the project. There has also been a need to phase in work because of pressure to conclude the project. That is perhaps not the most efficient way of settling the matter, as members will be aware, and there have been some cost implications. The reserve that was specifically allocated to landscaping has been used up, so there has been a call on general contingency to the extent of £1.2 million, as the papers say. That was a predicted risk, although the risk was perhaps a little underestimated vis-à-vis the eventual outcome.
However, the package that has been finalized since November was agreed at 5% below the cost plan allowance. I think that that kind of variation in the final figures will be apparent as the settlement process moves to its conclusion - we are still a little way from final settlement of all accounts.
That is all I want to say by way of introduction."
The following subsequent exchange also took place at the meeting:
"Alasdair Morgan (South of Scotland) (SNP): I have a general question to which the answer is not in the papers that are in front of me. When we examined figures in the first parliamentary session, an amount for each package was always allocated to risk or the risk reserve. I am not looking for a precise figure but, broadly, of all the money that was allocated to risk, what percentage has been spent?
Paul Grice: That is a difficult question to answer, but I would be happy to find out whether we can do that calculation, at least in broad terms. I do not have the figures to hand, but I am sure that we could look back and come back to you with some.
Alasdair Morgan: The reason why I ask is that it seemed at the time as if most of it was being spent.
Paul Grice: My impression is also that most of it has been spent. In some specific cases the risk has not materialized, but in others it has. I would be happy to go away and find out to what extent we can do a general assessment of the percentage of risk that has materialized. I am afraid that I do not have that information to hand.
Robert Brown: It is fair to say that the figure is something of a moving target, in that some risks that are in the risk register at earlier stages drop off and new risks are identified.
Paul Grice: Yes. I suspect that the amount might be difficult to determine in detail, but I am sure that we could find out whether we can give the committee a feel for the percentage or proportion of risk that has materialized.
Alasdair Morgan: Keeping a risk register might be a normal technique in such building projects - I know that, as you make clear in your report, we will not undertake one again in the near future - but to the layman, risk has perhaps a 50:50 chance of materializing, although I suspect that that has not been the case for the risk in this project and that it has not been so much a risk as a near certainty."
20. The Scottish Parliament Finance Committee Official Report of meeting March 1st, 2005, Cols 2405-6
21. Ibid, Col 2409