Brexit ferry contracts will cost 'tens of millions' more due to Article 50 extension
PUBLISHED: 12:56 16 March 2019 | UPDATED: 12:56 16 March 2019
Contracts with ferry operators to provide extra services to cope with a no-deal Brexit could cost tens of millions more if there is a delay to Brexit.
According to the Financial Times the cost of a delay to Brexit could increase costs of the contract to £28 million.
Brittany Ferries, which has contracts worth £46.6 million under the deal, said the terms “included fair and proportionate compensation in a deal scenario, taking account of the significant preparatory work and concomitant costs incurred by Brittany Ferries”.
It said the firm had already “incurred a series of direct costs and resource commitments” and “the new schedule cannot now be changed, even as an extension to Article 50 seems likely”.
Additional staff had been employed and more than 20,000 existing bookings had been changed, the firm noted.
A Department for Transport spokesman said: “As the prime minister has made clear, the legal default in UK and EU law remains that the UK will leave the EU without a deal unless something else is agreed.
“Leaving with a deal is still our priority, but as a responsible government it is only right that we push on with contingency measures, that will ensure critical goods such as medicines can continue to enter the UK.
“The government has always been clear that any extra capacity that is not used, can be sold back to the market.”
A National Audit Office memorandum on the contracts, which seek to ensure that medicines and other vital supplies can continue to reach the UK in the event of a no-deal Brexit causing chaos on the short Dover-Calais and Channel Tunnel routes, noted the potential problems caused by a delay to Article 50.
“If the date of the UK’s Exit from the EU changes, and there is still the possibility of a no-deal EU Exit, the Department will need to decide how it wishes to proceed with the contracts,” the NAO said in February.
“There is no provision for the start date to be delayed, but the Department may seek to negotiate this with the operators.”
The controversial agreements put in place by Chris Grayling’s Department for Transport have already seen a row over the collapse of a contract with Seaborne Freight, which had no ferries, and a £33 million out-of-court settlement with Eurotunnel.
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