Speech on the Public Accounts Committee Report on IRIS 1991 to 2007, as given in Tynwald on 16 November 2010.
Thank you Mr President - A PAC report of this nature covering the first 16 years of such a significant and costly capital project presented an extremely important opportunity to produce a fearless, comprehensive and honest document which could inform, advise and guide those who come after us for the good of the Isle of Man, the taxpayer, the whole capital contract commissioning process, our Government and Parliament and indeed the standing of the Public Accounts Committee itself.
This has been an opportunity completely missed.
I recently read an academic paper on the impact of scrutiny committees on the Westminster parliament. I was particularly drawn to the section concerning the Public Accounts Committee. In it their PAC is consistently rated as powerful and is described as, and I quote:
‘the one select committee before which even the most exalted permanent secretary can be made to tremble’
Reading the report before us today I did not for one moment feel that the same could be said of our PAC. It gives me the impression that being subject to their inquiries relating to this report would have been more like being mauled by your favourite duvet.
This simply cannot be respected as a serious attempt to get to the bottom of the real concerns that exist over IRIS. The report should be withdrawn.
If I could first look at the recommendations in the report:
Recommendation One - Sinc
e when did the PAC become an apologist for government? – that is not its role. Having spent £85 million pounds so far I damn well hope that there has been a significant reduction in the discharge of raw sewage into the sea. Period!
I totally disagree with Recommendation Two. It is a deeply flawed well meaning piece of nonsense. Surely to goodness it is the PAC’s duty to periodically review a long term high cost capital project both on a reviewing and previewing basis. Last month in this honourable court I pointed out why the Peel Regional Sewage Works proposals as submitted were a disgraceful shambles. Why was it up to a new member to have to point this out – where was the PAC – why were they not doing their job? If it is not here for this sort of thing then what exactly is it for?
Recommendation Three is just a cheap piece of buck passing on to the Treasury. The real issue here which I focused on last month was how we as a parliament and those of you who are members of government use and relate to consultancy services. That is the key issue here – not what treasury is or is not asked to do. We need to be a great deal more honest with ourselves before we start dictating further to the Civil Service.
Recommendation Four - I just loved this one. What, it asks, are the lessons to be learned from the Meary Veg experience? I thought that was exactly what the PAC was supposed to investigate. It asks the Council of Ministers to come up with answers within six months. Well all I can say about that is that the PAC could not come up with any answers itself and it took longer than six months to achieve nothing. More buck passing.
Let’s now turn to the three conclusions.
In the first part of the first conclusion.
It’s clear that the PAC has allowed itself to become preoccupied with running costs at Meary Veg without ever really understanding exactly what went wrong at a much more fundamental level. I suspect they were rather conveniently led astray here.
second part of the first conclusion.
The PAC regrets that Tynwald was not properly informed about the drying process. There is much I could say about this conclusion but the only comment I will make is that I understand we enjoyed paying out for the last dryer so much that we are now contemplating buying another for- what is it? -£10m? Bad habits, it seems, die hard.
There are alternatives we must consider.
The third part of the first conclusion
...is just plain nonsense – the department did not stay within budget or anything remotely near it but more of that in a moment.
Turning to the second conclusion – here we go again, patting everyone on the back for their efforts over the Whitehoe pumping station. With these compliments flying around in the report - I am beginning to think that either I live on a different planet or a number of honourable members must be on some sort of happy pills. Again I think it is plain daft that this comment is a main conclusion in a report on a subject of such enormous import - but if the PAC really wanted to say anything at all about Whitehoe it should have been to ask and answer the question why was it put there in the first place?
I really have nothing at all to say about the final conclusion because it does not actually say anything. I don’t have a clue why it is there.
What is so terribly disappointing is that the PAC has completely missed the proverbial elephant.
So what did go so terribly wrong with the IRIS project? What in my opinion should the PAC have concluded.
First of all let’s sa
y what did NOT go wrong. It was not the decision to site the treatment works at Meary Veg that was fundamentally floored nor in fact the subsequent decision to opt for two treatment works one for the south/central and east central and one for the north.
No it goes deeper than that.
It lies in the early days of the project when a powerful political will to initiate it was allowed to triumph over common sense and where the consultants paid far too much attention to that political will and nothing like enough attention to doing their own job properly. They chased the fees instead of the facts.
The Achilles Heel, the weakness at the heart of the project, was the total failure on the part on the consultants to do their job in a professional fashion.
The project was predicated on near industry standard measurements by the consultants and did not take into account the very special ground conditions that exist in lower Douglas.
Mr President let me explain for anyone who is not clear about this. Almost the whole of lower Douglas is built on what at some time or other was either a beach or estuarine sediment, the sandy ground is highly water permeable and sitting as it does close to, on or below sea level is subject to sea water ingress. Also as it sits at the foot of a huge escarpment - lower Douglas has an extremely high natural water table. These factors when brought together result in very special and difficult ground conditions within which the sewers were originally placed. Finally the Victorians, very sensibly on their part, used the many natural streams and waterways flowing onto the beach to carry away the sewage – to keep the sewer pipes flowing.
Along came our politicians with great plans, with consultants in tow who would simply do their paymasters bidding and there’ in a nut shell’ you have a recipe for potential disaster.
No thorough investigation, on the part of the consulting engineers, of the flow rates of the Douglas sewers could possibly have taken place - but this they absolutely should have done. Nor could any advice have been taken from the men who knew all about our Douglas sewers – the men who actually maintained them. Had they done both or either they could not possibly have come up with the near industry standard flow rates which were subsequently used to size Meary Veg.
Either that or the information was produced only then to be ignored.
That is the simple truth. If someone had had the common sense to put on their hat coat and wellies and had gone out and found the older really knowledgeable guys who worked on the sewers, and asked them for their advice and then, furnished with that wealth of knowledge, had turn around and stood up to the vanity of the politicians and the arrogance of the consultants then that person on that single day would have saved the tax payer millions of pounds, the sewage authority, a series of ministers and this honourable court from a mountain of embarrassment. But no one did – so here we are.
That failure takes us to the very heart of the problem.
Situation number one: Ministers either defer to their officers and the officers defer to the consultants because no one really wants to accept responsibility.
Situation number two: Consultants are brought in knowing that the only way they will get their fees is to deliver what the politician wants.
To return specifically to IRIS.
The failure to grasp the details of the task in hand ( to properly measure the flow rates) was either gross and unforgivable negligence on the part of those responsible for establishing the flow rates or - if accurate figures were actually produced - on the part of those who ignored the findings for whatever reason best known to them. That is what the PAC should have focused on and something that should have happened years ago not now as the trail cools. Was the PAC report held back on purpose until the trail went cold making it far more difficult for the PAC committee to produce a solid report? I don’t know.
Does the PAC not understand its proper duties to this parliament?
Anyway, The IRIS scheme, as incorrectly sized, forged ahead and it was not going to be until late 2006 early 2007 that the full magnitude of this gross error would come fully to light because it took a considerable period of time to get Meary Veg up to speed with the inclusion of flows from Douglas, Onchan and the South and to overcome normal teething troubles. It must have been a terrible moment when the truth finally dawned for those involved - but rather than admit this truth everything possible since then has been done to disguise this fundamental error and distract attention from it. Since then this court has been showered with shambolic, disgracefully inaccurate and misleading information.
The proverbial elephant does almost momentarily appear in the last paragraph of page 31 of the PAC report where we see that the estimated flow rate of 234 litres per second proved to be a terrible under estimate because the actual flow rate turned out to be a whacking 379 litres per second – an increase of 145 litres per second or a flow rate 50% higher than anticipated. Unfortunately as I have said its true significance was missed by the PAC because it only focused on running costs.
Imagine if the Minister of Education said we needed a new school for 400 pupils and then came back just after it opened to say sorry folks, bit of a boo boo there I should have said 600. Would it have been for the PAC to produce a report saying how terribly well everybody conducted themselves in the circumstances, or how good the teachers were or become preoccupied with running costs? I rather doubt it.
So rather than admit to the error everything changed between the Mouchal Parkman Report of August 2006 and the subsequent Mouchal Parkman Report of April 2007. The former being pre le sewage deluge and the latter being après le sewage deluge.
I appreciate that Minister of Infrastructure does not like the use of this type of phrase – I just thought it nicer that before and after a certain something hit the fan.The PAC committee only saw the latter report which is all sweetness and light but not the former report. I had to ask for the former report a number of times before I got it because its existence was not admitted. It was only when I was able to advise WASA that I already had the appendices to this so called none existent August 2006 report that suddenly its existence materialised. I finally saw it last Friday. This should have gone to the PAC – the PAC should have asked for it and they should have compared the two. They did not and fell for the spin hook line and sinker and this with the Chairman of the PAC actually sitting on the WASA.
The August 2006 report states that Meary Veg is sized for everything from Laxey and the central valley and all stations south. It is very firm on this and argues it is by far the best way to proceed.
The April 2007 report (only eight months later) tells a completely different story effectively sizing Meary Veg to serve Onchan Douglas and the south only. It obfuscates and tries to rewrite the history of the IRIS Project options in order to attempt to change tack and disguise the overspend. Who was truly behind these efforts to mislead this house I do not know.
It would however not be difficult to establish an estimate to show how many millions of pounds IRIS became overspent at this point by comparing the cost of what should have been with what could be predicted to be the actual outcome cost. That’s if anyone can do their sums properly of course. All I can say with any certainty is that the overspend is a very large sum indeed – any design amendment always is.
In order to draw attention away for this serious and costly mistake every attempt is being made to distract members from this central truth. Since the advent of the April 2007 Mouchal Parkman Report we have been fed a series of cock and bull stories about how much more cost effective providing separate sewage treatment works for Laxey and Peel would be rather than piping back to Meary Veg. I explained much of this last month at least with regard to Peel.
Looking at a couple of particular points within the report I have to say that I cannot reconcile the statement at para 7.15 on page 31 which says that Phase 1 as defined in 1998 relates just to Douglas and not the settlements to the south. This is totally contradicted by the IRIS Master Plan 1998 vol 2 of 3 Feasibility Report (yellow page number 5) which tells a completely different story and I refer the PAC to that and ask if they wish to amend their report.
If they would like to withdraw their report for amendment might I also suggest they might wish to reconcile the advised running costs of the dryer at £228,000 per annum as shown on page 30 with a figure of £987,000 per annum as supplied to Tynwald on the 2nd February 2010 which can be seen on line 890 of Hansard. Which of these two represents the cost of running the dryer? – they can’t both be right.
This is not a good report and it should not be accepted. I strongly recommend that the PAC withdraw it as I believe that it has been led up the garden path just as there have been a number of attempts to lead Tynwald up the garden path.
I believe we need the following:
- We need a much stronger PAC with a totally independent Chairman that fully understands its duty is to Parliament not to the council of ministers.
- The PAC should withdraw this highly floored report and set its mind to producing a straight forward down to earth report on what went wrong with IRIS in order to clear the air
- The PAC should conduct a separate and brutally honest study focusing on how the relationship between government and its consultants should work.
- We need to stop IRIS dead in its tracks until we are able to produce an open honest and accountable assessment of the costs remaining and the best way forward.
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