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UK government in £33M out of court settlement with Eurotunnel

The payment was agreed on Friday, 1st March, the day the action brought by Eurotunnel against the UK government was due to begin in the High Court in London

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UK government in £33M out of court settlement with Eurotunnel

The Channel tunnel operator had challenged the Department for Transport’s decision to award ferry companies DFDS, Brittany Ferries and Seaborne Freight emergency contracts worth an aggregate £108M to provide freight transport services in the event of a "no deal" Brexit.

 

However, Eurotunnel objected that it had not been invited to negotiate a similar contract, and described the awards as a “secretive and flawed procurement process."

 

At the preliminary High Court hearing last month, the spokesman for the Department for Transport said the government’s procurement process was only for "maritime freight" services and that Eurotunnel "could never have provided that capacity" and "could not have complied" with the terms of the contracts. It defended the process, arguing the “extreme urgency” of preparing Britain for the possibility of a "no deal" Brexit on 29th March justified the swift action.

 

In view of that, and the fact that the whole idea of the ferry contracts was to boost alternatives to the Dover Straits route, which is dangerously exposed to a "no deal" Brexit by dint of sheer numbers (ca 4M HGVs in 2018 - 1.7M Eurotunnel and 2.3M ferries) and the fact that it is almost exclusively driver-accompanied, the decision not to contest the case comes as a surprise to this writer.

 

It is another embarrassment for the government, which has already been forced to cancel the Seaborne Freight contract.

 

Eurotunnel will be required to spend part of the £33M to install improved scanning equipment to enhance security and take further steps to improve truck traffic flow at the terminals to ease congestion.

 

Eurotunnel said the agreement would "ensure that the Channel Tunnel remains the preferred route for vital goods to travel between the EU and the UK’, and enable 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."

 

Separately, the Rail Freight Group has warned that in the absence of an agreement regarding basic rail connectivity, a no deal Brexit will bring severe disruption to through tunnel rail freight services.

 

It has welcomed the European Commission’s proposal for contingency measures, but says they focus exclusively on the validity of safety licenses for cross-border rail infrastructure managers. In order to keep freight moving through the Channel Tunnel, further measures are essential, as the rail freight companies operating the trains also require valid safety certificates for themselves and for their drivers.

 

"Although we hope that the UK government and the EU will avoid a no-deal exit, we must have the necessary provisions in place to ensure that vital freight trains can continue to operate," said RFG Director General Maggie Simpson. "We welcome the move from the Commission to start establishing this framework, but this must be concluded as a matter of urgency and include all the necessary provisions to keep trains moving."

 

Last year there were 2,077 freight trains via the fixed link.

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