P&O challenges government award of taxpayer funds to Eurotunnel

26 Apr 19

Ferry giant P&O is to take legal action against the government over claims that money handed to train operator Eurotunnel put the ferry operator at a “competitive disadvantage”.

P&O claims the handing over of £33m of taxpayers' money to Eurotunnel by the Department for Transport, as part of a settlement over the award of no-deal Brexit shipping contracts, was unlawful.

Eurotunnel’s case came after the DfT awarded contracts worth more a total of more than £100m to three firms - Brittany Ferries, DFDS and Seaborne Freight – so the companies could provide extra capacity across the Channel in the event of a no-deal Brexit, reducing congestion at UK ports.

However, the DfT was forced to cancel its contract with Seaborne, which had never run a ferry service, in February. Subsequently, the government was criticised for not having run a full public procurement process, and Eurotunnel sued – claiming it had never been considered for a contract, despite having previously run a cross-channel ferry service. The DfT, led by transport secretary Chris Grayling, settled the claim out of court for £33m.

P&O, which did not bid for the original ferry contracts, is now challenging the Eurotunnel settlement.

“We have repeatedly made clear during decades of providing vital transport services between Britain and the Continent that we are happy to compete with other providers on a level playing field,” it said.

“We also fully accept that it was prudent of the government to make contingency plans to protect international supply chains in the event of a hard Brexit. However, we do not believe that the payment of £33m of public money to Eurotunnel to settle its legal challenge to these plans is fair or reasonable.

“It is explicitly designed to be invested in the tunnel's infrastructure and if left unchallenged would put our services at a competitive disadvantage."

A government spokeswoman said: “We are confident we acted appropriately in reaching the agreement with Eurotunnel.”

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