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Report contradicts UK minister's claim that no public money spent on no-ships ferry contract

Transport Secretary Chris Grayling is coming under fire after claiming that no public funds were spent on the Seaborne Freight contract.

Image: PA Wire/PA Images

THE UK’S TRANSPORT Secretary Chris Grayling is coming under pressure after it was revealed that his department had spent public money on the Seaborne Freight contract.

The British government awarded contracts worth £103 million to three companies to operate ferries in a no-deal Brexit scenario. They were Brittany Ferries, DFDS, and Seaborne Freight.

Seaborne Freight, which was incorporated in April 2017, was later discovered to own no ships. It was also revealed that the terms and conditions on its website also seemed to be copied and pasted from those related to a food delivery company. 

At the weekend, it was announced that the £13.8 million contract awarded to Seaborne Freight was to be terminated.

Figure-4-Ferry-services-e1549903151903 Source: National Audit Office

A Transport spokesperson said that Seaborne had an Irish backer, Arklow Shipping, which had “suddenly and unexpectedly” withdrew its support last week.

“At the time of the award, we were fully aware of Seaborne’s status as a startup business and the need for Seaborne to procure vessels and port-user agreements in order to deliver a service,” Grayling explained to the House of Commons yesterday.

He said that he had “to refrain from saying anything” about plans to obtain ships, as it could have increased the prices for the vessels they had intended to purchase. Grayling said that as of last week, there were “firm options for ships”.

“However late last week, despite previous assurances, Arklow Shipping suddenly and unexpectedly withdrew their backing from Seaborne. In light of this, and after very careful assessment, I took the decision to terminate this contract.”

Grayling also indicated last night that no public money had been spent on the Seaborne contract.

Mister Speaker as I have made clear, not a penny of taxpayer’s money has gone, or will go, to Seaborne.

But last night, a report by the UK’s National Audit Office showed that at least £800,000 had been spent analysing the three contract bids:

The Department also commissioned professional advisers to undertake work to look at the technical, financial and commercial aspects of the three ferry operators.
For work relating to the procurement process up to the end of December 2018, the Department spent approximately £800,000 on its external consultants: Slaughter & May; Deloitte; and Mott MacDonald.

This has increased pressure on the transport minister over the disastrous contract bid.

The report also showed that military vehicles were considered as an option in the UK’s no-deal planning for ports.

“Recommended that department explores this, recognising that Ministry of Defence may have limited spare capacity,” the report says.

You can read the full report from the National Audit Office here.

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