Government terminates £14m ferry contract with company that owns no ships

Transport secretary Chris Grayling. Photograph: Victoria Jones/PA.

Transport secretary Chris Grayling. Photograph: Victoria Jones/PA. - Credit: PA Wire/PA Images

A controversial no-deal Brexit ferry contract awarded to a firm with no ships has been cancelled by the Department for Transport.

Transport secretary Chris Grayling's decision to award Seaborne Freight a contract worth £13.8 million had attracted widespread criticism.

The department said it had decided to terminate the contract after Irish company Arklow Shipping, which had backed Seaborne Freight, stepped away from the deal.

A DfT spokeswoman said: 'Following the decision of Seaborne Freight's backer, Arklow Shipping, to step back from the deal, it became clear Seaborne would not reach its contractual requirements with the government. We have therefore decided to terminate our agreement.

'The government is already in advanced talks with a number of companies to secure additional freight capacity - including through the port of Ramsgate - in the event of a no-deal Brexit.'

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Grayling last month defended the Seaborne Freight contract, insisting it was 'not a risk'.

Instead the Brexiteer said his politics was the reason that he got so much stick in the job.

It was one of three firms awarded contracts totalling £108 million in late December to lay on additional crossings to ease the pressure on Dover when Britain leaves the EU, despite having never run a Channel service.

It led to accusations from Eurotunnel that DfT had acted in a 'distortionary and anti-competitive' manner.

In January TNE revealed how the company had copied terms and conditions for its website off a takeaway website.

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However, the transport department said it had been Arklow Shipping's backing that gave it confidence in the viability of the deal, and that it stands by the robust due diligence carried out on Seaborne Freight.

It added no taxpayer money had been transferred to the company.

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