UK sued by Channel tunnel firms over Brexit ferry plans

The companies that run the Channel Tunnel are suing the British government over its award of ferry contracts to handle freight shipments in a no-deal Brexit, just days after one of those contracts, with a startup company that doesn’t own any ships, fell through.

Channel Tunnel Group and France-Manche accuse the UK government of a “secretive and flawed procurement exercise” for the backup ferry service in the event of a no-deal Brexit, their lawyer Daniel Beard said in court.

The companies together form Eurotunnel, which operates the link between the UK and the continent.

The lawsuit challenges the UK’s award of ferry contracts to Brittany Ferries of France, Danish shipping firm DFDS and UK-based Seaborne Freight for additional freight services between Britain and continental Europe. The £13.8m (€15.7m) Seaborne contract was scrapped when it became clear the company, which doesn’t own any ships, wouldn’t meet its requirements, the Department for Transport said.

The lawsuit is a fresh setback for UK Transport Secretary Chris Grayling, who faced calls to resign over the weekend after the Seaborne contract fell through. It comes just weeks before the UK’s planned departure from the EU on March 29, as Prime Minister Theresa May seeks to buy time to renegotiate her Brexit agreement with the EU.

The contracts were awarded without a publicised competition and relied on “extreme urgency provisions,” the tunnel companies said in their court filings. The contracts also amounted to an unfair subsidy for companies, they said.

A spokeswoman for the Department for Transport said, however, that the British government had carried out a “competitive procurement process to secure additional ferry capacity between the UK and the EU, which is in line with proper procedures”.

Eurotunnel has previously provided ferry services under the MyFerryLink brand, Mr Beard said. That line was shut down, however, after a UK court in 2015 upheld a competition regulator’s decision blocking it from running cross-channel sailings between Dover and Calais.

It’s “remarkable” that Eurotunnel hadn’t been told about the ferry contracts since it had run cross-Channel services in the past few years, he said.

Eurotunnel says the first time it heard about the three Brexit ferry contracts was when the Department for Transport announced they had been awarded in December, Judge Peter Fraser said as he summarised the case at the hearing.

- Bloomberg

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