Brexit ferry fiasco: 40 officials quizzed in DfT probe of £33m Eurotunnel payout

Government says updated freight capacity procurement ahead of planned 31 October exit has avoided problems that led to settlement

Photo: PA

By Richard Johnstone

02 Oct 2019

The Department for Transport has revealed that 40 officials from across government have taken part in a lessons-learned exercise to identify the issues that led to the department paying £33m to Eurotunnel over a bungled set of no-deal Brexit ferry contracts.

In March, DfT agreed to pay £33m to Eurotunnel following a legal challenge that the cross-Channel rail company brought after it was not invited to bid for contracts to provide extra freight capacity for a no-deal Brexit.

The contracts with three ferry companies – Seaborne Freight, Brittany Ferries and DFDS – was awarded through an accelerated procurement process that the department has argued was justified because the UK was facing the when it became apparent that the UK could leave the EU without a withdrawal agreement on 29 March. But Eurotunnel argued this defence could not apply as the March deadline had been decided two years earlier when Article 50 was invoked, beginning the Brexit process. The settlement was agreed out of court.


In its official response to a Public Accounts Committee review of the payout, the department said “the key lesson from the previous procurement was that the time taken to secure cross-government approval to contract for freight capacity resulted in insufficient time to conduct a process under the normal procurement processes”.

The department said it had used a tender process with “higher legal risk” than usual. This decision has now been reviewed by the department’s maritime directorate, which has “considered the full freight capacity programme from procurement, to contract management and operation, and finally to termination”.

The review involved individual and group interviews “with over 40 people, both within the department and across government, who were involved in the project”, DfT said.

The exercise also incorporated feedback from two Infrastructure and Projects Authority reviews conducted in January and February.

“All participants noted that the pace required of the programme to deliver freight capacity for 29 March 2019 meant that the programme was very challenging in nature,” the department said in a Treasury minute published this week.

The review identified a number of factors that led to the problems, according to the response. The novel nature of the procurement for ferry capacity meant that project management governance structures and processes had to be established very rapidly, along with departmental resources to run the programme. The high-profile nature of the contracts, including the revelation that one of the firms involved, Seaborne Freight, had never operated ferry service before and owned no ships, led to “intense media scrutiny and hence the need for a robust and proactive media strategy”.

The contracts put in place for a March exit from the EU were all cancelled, and DfT said the lessons learned from its review had been “fully incorporated in the current procurement for freight capacity”. The department has now put a framework of ferry, rail and aircraft operators in place for public services to use to procure transport for critical goods – mostly medicines – if the UK leaves the EU without a withdrawal agreement on 31 October.

But last week the National Audit Office warned that the framework did not rule out disruption to medicine supplies, despite 91% of the services being procured through the DfT freight framework being earmarked to carry health and social-care supplies

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