Watch Now

Eurotunnel in out of court settlement with UK Government

 Eurotunnel and the UK Government reach a settlement over the no-deal Brexit contract awards to ferry operators. Credit:
Eurotunnel and the UK Government reach a settlement over the no-deal Brexit contract awards to ferry operators. Credit:

Rail operator Eurotunnel, which handles passenger and freight trains between the United Kingdom and the rest of Europe, has reached an out of court settlement with the British Government over the train company’s claims on no-deal Brexit contracts handed out by the Department for Transport.

Secretary of State for Transport Chris Grayling awarded contracts in December to Seaborne Freight, which had not yet acquired any vessels, Danish Ferry operator DFDS and Brittany Ferries, totalling more than £100 million ($132.1 million) to extend their capacity in the event of a no-deal Brexit. Eurotunnel was contesting this decision, claiming that the process for awarding the contracts had not been transparent.

Grayling had already cancelled the agreement that the Government made with Seaborne Freight because the company, which was attempting to re-start a defunct freight ferry service from Ramsgate in southern England to Ostend in Belgium, was unable to secure leases on ferries.

Calls for the sacking of Chris Grayling have come following the settlement, which has seen Eurotunnel handed a £33 million ($43.66 million) contract as part of the deal to drop the high court case. The money awarded to Eurotunnel will be spent improving its Folkstone Terminal and would be used to prioritize medicines in the event of a no deal Brexit.

In a statement regarding the agreement, Grayling said, “While it is disappointing that Eurotunnel chose to take legal action on contracts in place to ensure the smooth supply of vital medicines, I am pleased that this agreement will ensure the Channel Tunnel is ready for a post-Brexit world.”

For its part, Eurotunnel said that the money would be used for the “development of infrastructure, security and border measures that will guarantee the flow of vehicles carrying urgent and vital goods and that will keep supply chains essential to both industry and consumers moving.”

Meanwhile, the expected meaningful vote on Wednesday, 27 February, never materialized. The Government again persuaded its Members of Parliament to allow it more time to strike an alternative deal with the European Union on the Irish Backstop that would prevent a hard border between Northern and Southern Ireland.

Prime Minister Theresa May has now promised a meaningful vote by 12 March, but the opposition Labour Party has shifted its stance and is now calling for a referendum May’s Brexit deal.