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Brexit: Botched ferry contracts set to hit taxpayers for extra £28m if departure delayed

Category: Political News,Politics

Botched contracts put in place to help the country ferry in vital goods in the case of a no-deal Brexit could cost almost £30m more if the UK’s departure from the EU is delayed.

The deals were set up to take account of a potential no-deal exit on 29 March but could see firms receive compensation for expenses incurred and may also cost more if the departure date alters creating extra work.

The news once again throws a question mark over the position of Chris Grayling, the ally of Theresa May who has been heavily criticised over the contracts and other problems relating to his transport brief.

The controversial ferry process put in place by the Department for Transport had already seen a row over the collapse of one contract with Seaborne Freight, which had no ferries, and a £33m out-of-court settlement with Eurotunnel.

On Saturday, The Financial Times reported the cost of a delay to Brexit could amount to a further £28m in relation to the contracts.

Brittany Ferries, which has contracts worth £46.6m under the deal, said the terms “included fair and proportionate compensation in a deal scenario, taking account of the significant preparatory work and concomitant costs incurred by Brittany Ferries”.

It said the firm had already “incurred a series of direct costs and resource commitments” and “the new schedule cannot now be changed, even as an extension to Article 50 seems likely”.

Additional staff had been employed and more than 20,000 existing bookings had been changed, the firm noted.

A National Audit Office memorandum on the contracts, which seek to ensure that medicines and other vital supplies can continue to reach the UK in the event of a no-deal Brexit causing chaos on the short Dover-Calais and Channel Tunnel routes, noted the potential problems caused by a delay to Article 50.

It said: “If the date of the UK’s exit from the EU changes, and there is still the possibility of a no-deal EU exit, the department will need to decide how it wishes to proceed with the contracts.

“There is no provision for the start date to be delayed, but the department may seek to negotiate this with the operators.”

A Department for Transport spokesman said: “As the prime minister has made clear, the legal default in UK and EU law remains that the UK will leave the EU without a deal unless something else is agreed.

“Leaving with a deal is still our priority, but as a responsible government it is only right that we push on with contingency measures, that will ensure critical goods such as medicines can continue to enter the UK.

“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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