Government pays Eurotunnel £33 million to drop legal claim over Brexit ferries

The Government has paid £33 million to Eurotunnel to settle a legal action over the award of Brexit contracts to ferry firms, including one which had no ships.

Eurotunnel, which operates the Channel Tunnel, will no longer challenge the Department for Transport’s decision to award deals worth £108 million to Seaborne Freight, DFDS and Brittany Ferries to lay on additional crossings to ports other than Dover in the case of a no-deal Brexit.

The payout led to further calls for Transport Secretary Chris Grayling to resign, but Downing Street insisted it had full confidence in the Transport Minister

Eurotunnel had previously accused the DfT of awarding the contracts through a “secretive and flawed procurement process”.

Brexit
Transport Secretary Chris Grayling

The decision to award Seaborne Freight a deal worth £13.8 million sparked widespread concern as the start up firm has not previously run a ferry service.

The contract was terminated last month after its financial backer pulled out.

On the same day news of £33 million payout emerged it was revealed by the National Audit Office that the scrapping of probation reforms introduced while Mr Grayling was justice secretary will cost taxpayers nearly half a billion pounds.

And earlier this week the Commons’ Public Accounts Committee published a report stating that train passengers and taxpayers “risk continuing to pay the price” for the failure of his department to improve its “strategic management” of the railway.

"This trail of destruction has gone on long enough, it's time for Chris Grayling to go." – @AndyMcDonaldMPhttps://t.co/uNmEwP0Flghttps://t.co/TASUgFnH3t

— Labour Press Team (@labourpress) March 1, 2019

Labour’s shadow transport secretary Andy McDonald said: “His conduct as a minister is one of serial failure and routine incompetence.

“In any other sphere of life he would have been sacked long ago. I say yet again: this trail of destruction has gone on long enough. It’s time for Chris Grayling to go.”

The government said the “primary reason” for reaching an out-of-court agreement with Eurotunnel was to ensure the supply of goods such as crucial medicines and medical supplies “would not be put in jeopardy”.

“A lengthy legal case and the uncertainty it creates is not in anyone’s interest,” it added.

The DfT had argued that the “extreme urgency” of preparations for Britain’s departure from the EU on March 29 justified the process of awarding the ferry contracts.

Some of the £33 million for Eurotunnel will be spent by the firm on improving security and traffic flow, Downing Street said.

In a statement, Mr Grayling said: “The agreement with Eurotunnel secures the Government’s additional freight capacity, helping ensure that the NHS has essential medicines in the event of a no-deal Brexit.

“While it is disappointing that Eurotunnel chose to take legal action on contracts in place to ensure the smooth supply of vital medicines, I am pleased that this agreement will ensure the Channel Tunnel is ready for a post-Brexit world.”

A Eurotunnel spokesman said the agreement will ensure the Channel Tunnel “remains the preferred route for vital goods to travel between the EU and the UK”.