DfT took Seaborne’s word that it had secure backing before awarding no-deal ferry contract, says top civil servant
Britain’s top transport mandarin has said the government had been happy to take Seaborne Freight’s word that it had secured financial backers before the firm was awarded a £13.8m contract.
Bernadette Kelly, permanent secretary to the Department for Transport (DfT), said Seaborne was a “known quantity in the industry”.
The DfT scrapped its contract with Seaborne last week, after its apparent financial backers, Irish firm Arklow shipping, withdrew their support.
Kelly told MPs on the Public Accounts Committee that the DfT had awarded Seaborne one of three contracts for ferrying services even before Arklow initially confirmed its backing in a letter on the 15 January.
Read more: May defends due diligence into scrapped contract ferry firm Seaborne
She said the DfT had received “intimations” from Seaborne.
“So you took the word of Seaborne?” asked committee chair Meg Hillier.
“I would need to check what precise pieces of paper were in play at that point,” said Kelly.
DfT director-general for international security and environment Lucy Chadwick, speaking alongside Kelly, said: “we certainly had a number of discussions with Seaborne in term of who their backers were”.
The identities of Seaborne’s other backers were not disclosed, but Kelly and Chadwick told MPs they would determine whether further documentation can be released.
Seaborne’s ability to provide the services it was contracted for have been called into question. The company, established in 2017, owned no ferries, and appeared to have lifted the terms and conditions on its website from a food delivery company.
Read more: Grayling accused of 'misleading' parliament over Brexit ferry contracts
Kelly said the firm’s proposed arrangements, which involved leasing two ferries that it would then operate, were “not in any way abnormal or remarkable”.
Since the contract was scrapped, transport secretary Chris Grayling has faced calls to resign.
Earlier today, Theresa May claimed proper due diligence was carried out in the procurement process that resulted in Seaborne Freight getting a contract, despite consultants saying they could not assess its finances.
A report by the National Audit Office (NAO), released on Monday, found the DfT had spent “approximately £800,000” on external consultants for the ferry contract, hiring Slaughter & May, Deloitte and Mott MacDonald.
Deloitte’s assessment of the financial stability of the bidding firms, which gave them a numerical score for “robustness”, was not carried out on Seaborne due a lack of documents, while Mott Macdonald, which was charged with assessing the technical capacity of the bids, flagged “significant execution risks” related to Seaborne’s bid.
Pressed by MPs today, Kelly said the DfT had undertaken the “normal level of diligence you’d expect in these circumstances.”