UK to pay Eurotunnel £33m over no-deal Brexit contracts

London – The British government has agreed to pay Channel Tunnel operator Eurotunnel £33m to head off a lawsuit over extra ferry services commissioned in the event of a no-deal Brexit.

The Department for Transport (DfT) last year contracted three suppliers to provide extra ferry capacity for freight lorries, but Eurotunnel said the deals, worth £108 million (126 million euros, $143 million,), were struck in a “secretive” manner.

As part of the deal to drop the legal action, Eurotunnel agreed to “deliver improvements which will ensure the Channel Tunnel is ready to continue to keep passengers and freight moving post-Brexit”.

“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,” Transport Secretary Chris Grayling said on March 1.

“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.”

Sectors that could face disruption in the event of a no-deal Brexit

The contracts were initiated to ensure that Britain’s ports did not become bottlenecks in the event of a no-deal Brexit, when tariffs and new checks would be required.

One of the contracts, to Seaborne Freight, hit the headlines when it was discovered that it was a startup that had never been involved in this line of work and had no ships.

The government argued it made sense for companies to charter ships, given the temporary nature of the demand, but cancelled the contract earlier this month.

Grayling’s ministry said its decision to rip up the deal came after an Irish firm that emerged as a possible supplier of ships for Seaborne Freight changed its mind.