The Department for Transport has cancelled no-deal Brexit ferry contracts as the government reviews all its preparedness plans following an extension to the Article 50 exit process to October.
The department has contracted two ferry companies to run extra crossings across the English Channel and the North Sea in the event of a no-deal Brexit, to ensure the UK does not lose access to its supply of medicines and other critical goods. A third contract with Seaborne Freight, which owns no ferries, was scrapped last month after it emerged that the company would not be able to deliver the services it had promised.
Despite the six-month Brexit extension, the Department for Transport had confirmed to CSW that the ferry services commenced on 29 March, with tickets for the first two weeks have released for sale.
However, according to Sky News, DfT has now terminated the agreements, which were to run for a total of six months, after the deadline for the UK's departure was extended until the end of October.
However, an estimated £50m will still be paid to the ferry companies for part value of the contracts.
A National Audit Office report previously warned the government it would face a £56.6m bill for cancelling the contracts, but one department source told Sky they estimated the final cost would be around 10% lower.
A spokesperson for the Department of Transport said that the decision to cancel the ferry contracts came as the government is reviewing all preparedness plans: “The government’s freight capacity contracts were a vital part of contingency measures, ensuring goods like medicines could enter the UK in the case of disruption during a no deal Brexit,” the department said.
“The government’s freight capacity contracts for the summer period are no longer needed and have therefore been terminated,”
“The government has taken this decision now as it represents the best value for money for taxpayers. The termination of these contracts has resulted in less cost to the taxpayer than the termination costs reported by the NAO in their own analysis of the freight capacity contracts.”
In March, he faced another humiliating blow after the government were forced to pay a £33m out-of-court settlement to Eurotunnel after the firm accused the ministers of handing out the “secretive” ferry contracts.
As part of the agreement the operator committed to improve security and traffic flow to ensure medicines and vital imports can reach the UK in the event of a no-deal Brexit.
Speaking after the settlement was reached, 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.”
The announcement comes after the government last month stood down the Operation Yellowhammer contingency planning operation for dealing with the worst-case scenarios resulting from a no-deal Brexit after the extension was agreed.