Eurotunnel wins €38m payout in Brexit ferries row

THE British government has paid £33m (€38m) to Eurotunnel to settle a legal action over the award of Brexit contracts to ferry firms.

Eurotunnel, which operates the Channel Tunnel, will no longer challenge the Department for Transport’s decision to award deals worth £108m to Seaborne Freight, DFDS and Brittany Ferries for crossings to ports other than Dover in the case of a no-deal Brexit. The payout led to further calls for Transport Secretary Chris Grayling to resign, but Downing Street insisted it had full confidence in him.

Eurotunnel had previously accused the DfT of awarding the contracts through a “secretive and flawed procurement process”.

The decision to award Seaborne Freight a deal worth £13.8m sparked widespread concern as the startup firm has not previously run a ferry service. The contract was terminated last month after its financial backer pulled out.

The UK government said the “primary reason” for reaching an out-of-court agreement with Eurotunnel was to ensure the supply of goods such as crucial medicines and medical supplies “would not be put in jeopardy”.

The DfT had argued that the “extreme urgency” of preparations for Britain’s departure from the European Union justified the process.

Some of the £33m for Eurotunnel will be spent by the firm on improving security and traffic flow, Downing Street said. Mr 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.”