News | Published May 28 2019

P&O pursue £33 million in damages over Brexit ferry contracts

P&O Ferries are looking to recoup £33 million in damages from the government following its handling of a challenge to ferry contracts in a no-deal Brexit scenario.

A Department for Transport spokesperson said that the “cross-government decision" that was taken had "helped protect vital freight capacity for medical supplies to enter the country, in the event that the UK left the EU without a deal”.

P&O remained unmoved in the wake of this response, and have also reached out to the courts in a bid to have the Department for Transport’s £33 million settlement with Eurotunnel overturned. The French cross-channel operator had sued having not being taken into consideration for a freight contract under a no-deal Brexit.

Eurotunnel was ordered to pledge £33 million of public money toward infrastructure and improvement of its Folkestone terminal as part of the agreement.

After the initial settlement between the DfT and Eurotunnel was reached, a government statement announced that both parties had “agreed to support a series of measures that will ease pressure and minimise disruption at our EU borders, as well as improve security”.

However, lawyers acting on behalf of P&O have pushed for a judicial review into the actions of the Department for Transport, claiming that the £33 million settlement could not be “a genuine estimate” of Eurotunnel’s supposed losses and could only have been ratified “following a duly advertised and competitive tender process” which did not take place.

P&O argues that the DfT had “contracted Eurotunnel to provide the government with £33 million of infrastructure-related works or services”, which in accordance with public procurement rules, should have been tendered.

The stance of P&O is that the settlement constitutes unlawful aid from the state, and that the government’s concerns regarding security do not justify such expenditure solely at Eurotunnel’s own facilities.

The DfT has already been forced to cancel contracts with Brittany Ferries and DFDS over the course of May, in order to provide extra services to cater for a no-deal exit from the EU.

Yet, the government may now be forced to face further scrutiny from construction and facilities management companies should P&O successfully sue. These potential challengers would be made up of companies that could have bid on the work taking place at the Eurotunnel terminal, if a tender process had taken place.

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Authored by

Scott Challinor
Business Editor
May 28 2019

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