No-deal Brexit ferry contracts to be cancelled

No-deal Brexit ferry contracts to be cancelled

Transport Secretary Chris Grayling

Wednesday, May 1, 2019

Transport Secretary Chris Grayling is cancelling a set of contracts to provide ferry services after a no-deal Brexit, at a cost estimated at around £50 million.

Mr Grayling awarded contracts worth a total of more than £100 million last December to three firms - Brittany Ferries, DFDS and Seaborne Freight - to run extra services from ports including Plymouth, Poole and Portsmouth to ease expected pressure on the Dover-Calais route.

After the expected March 29 date of EU withdrawal was delayed, first to April 12 and now October 31, sailings went ahead even though the feared disruption to essential supplies like food and medicines did not materialise.

The National Audit Office estimated in February that the maximum cost of compensation to ferry operators if contracts were terminated early would be £56.6 million, but a Whitehall source said the actual figure was expected to be around 10 per cent lower.

Seaborne's contract to provide sailings from Ramsgate was scrapped in February after an Irish company backing the deal pulled out.

The DfT paid £33 million to Channel Tunnel operator Eurotunnel in an out-of-court settlement of a claim that the company was unfairly overlooked for the work.

Now Mr Grayling's department is being sued by P&O Ferries over its complaint that the payment to Eurotunnel put it at a competitive disadvantage.

A Downing Street spokesman said: "Departments will continue to work with ministers and permanent secretaries to take whatever decisions are required to make sure we are prepared in the event of a no-deal scenario."

Britanny Ferries has been operating 20 additional cross-Channel sailings a week since March 29 under the contract, despite Brexit not going ahead as expected on that date.

Some 30,000 passengers had their travel disrupted by new schedules introduced in March to accommodate the DfT contract, which are due to remain in place for six months.

The company has taken on 50 extra port staff in the UK and France and has spent large sums on fuel for the 2,000 additional nautical miles sailed each week.

However, a Department for Transport spokeswoman defended the termination, saying it would cost the public purse less than keeping the contracts.

She said: "The government's freight capacity contracts were a vital part of contingency measures, ensuring goods like medicines could enter the UK in the case of disruption during a no-deal Brexit.

"Following the extension, the government is reviewing all preparedness plans. The government's freight capacity contracts for the summer period are no longer needed and have therefore been terminated.

"The government has taken this decision now as it represents the best value for money for taxpayers.

"The termination of these contracts has resulted in less cost to the taxpayer than the termination costs reported by the NAO in their own analysis of the freight capacity contracts."

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