Saturday 16 March 2019 9:22 am

Government ferry contracts to cost millions more if Brexit is delayed


Sport and Business Reporter at City AM. Email: michael.searles@cityam.com

Sport and Business Reporter at City AM. Email: michael.searles@cityam.com

The government will have to spend tens of millions of pounds more than it already has to maintain the ferry contracts it has in place for a no-deal Brexit, if as expected the UK's exit from the EU is delayed.

The Department for Transport (DfT) agreed deals with three separate suppliers for additional freight capacity on ferries back in December in a bid to prevent congestion on roads to the coast. 

One of the companies contracted, Brittany Ferries, has said it would need to be compensated for expenses such as large fuel use and staffing costs. 


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The UK could still leave the EU as planned on 29 March but MPs voted on Thursday in favour of asking the EU to delay Brexit.

Brittany said it had planned 20 additional weekly sailings, employed extra staff and moved 20,000 passenger bookings to accommodate the DfT.

Contracts with ferry services has already cost the government millions of pounds while a settlement with Eurotunnel cost £33m after the government was sued for not considering it.

Meanwhile, a deal with Seaborne Freight had to be cancelled after it was revealed the company had no ferries and had never run an appropriate service.

Eurotunnel argued that, unlike Seaborne, it had run a cross-channel ferry service in MyFerryLink, which closed in 2015, and should have been considered.

A report from the National Audit Office (NAO) last month revealed that deals with Brittany Ferries, Seaborne Freight and DFDS were worth more than £100m and did not include a provision for Brexit's delay, while cancelling them before the end of March would incur a termination charge of up to £56.6m.


It was a decision labelled as "shocking" and one that "squandered huge amounts of public money" by Labour shadow transport secretary, Andy McDonald.

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"The new schedule cannot now be changed, even as an extension to Article 50 [meaning Brexit is delayed] seems likely," a Brittany statement read.

A spokesperson for the DfT said: "The legal default in UK and EU law remains that the UK will leave the EU without a deal [on 29 March] unless something else is agreed".

They added: "The government has always been clear that any extra capacity that is not used can be sold back to the market."

 

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