Government agrees £33 million settlement deal with Eurotunnel

Government agrees £33 million out-of-court settlement with Eurotunnel

The Government has reached an out-of-court settlement with Eurotunnel worth £33 million aftet the Channel Tunnel operator had commenced legal action over the awarding of no-deal Brexit ferry contracts.

Eurotunnel had decided to sue the Government after it awarded a contract to Seaborne Freight back in December, The contract, worth £13.8m, had attracted widespread criticism because the firm had no ferries and no experience of running ferry operations. Irish shipping firm, Arklow Shipping then pulled its financial backing for Seaborne and the Department for Transport (DfT) cancelled the deal.

DfT has agreed two further contracts with established operators Brittany Ferries (£46.6 million) and DFDS (£42.6 million). 

Eurotunnel said the contracts were decided in a "secretive and flawed procurement process”, but the government insisted it had acted transparently and competitively throughout the process of securing extra freight provision.

A Government statement said: “As part of the agreement, Eurotunnel has also withdrawn its legal claim against the government, protecting the vital freight capacity that the government has purchased from DFDS and Brittany Ferries.”

Transport Secretary Chris Grayling said: “The agreement with Eurotunnel secures the government’s additional freight capacity, helping ensure that the NHS has essential medicines in the event of a no-deal Brexit,

“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.”

However, according to the Guardian, the key factor that lead to the settlement was the prospect of 10,000 background documents pertaining to the awarding of the contracts being made public, documents that now remain sealed and unavailable for press or public scrutiny, the newspaper reported.