'Rushed and risky' Brexit ferry procurement cost £85m

Will Green is news editor of Supply Management
10 July 2019

MPs have criticised the “rushed and risky procurement” of extra ferry capacity in the run-up to the original March Brexit date, which left taxpayers with a bill of around £85m.

In a report the Public Accounts Committee (PAC) said the Department for Transport (DfT) must “learn from this episode” ahead of the new 31 October deadline but it was “concerned that departments’ preparations are being left too late”.

The PAC said the “compressed procurement timetable” for getting ferry freight capacity ahead of March “resulted in a flawed process”. Eurotunnel was paid £33m in an out-of-court settlement after it challenged the contract award, while the DfT paid out £51.4m to cancel contracts with ferry operators after the March deadline was extended.

“The department [DfT] recognises that it needs to learn from this flawed procurement,” said the report.

“However, there is a real risk that the short time left before 31 October will force the department into further high-risk procurements, which it wants to avoid.

“Given the lead time needed to put ferry capacity in place, which the department says can take a minimum of three months, any new procurement process would need to begin very soon.”

The PAC also criticised the settlement with Eurotunnel in terms of the public benefits from infrastructure investment at the Channel Tunnel site, including security and border preparedness.

“This appears little more than window dressing, as Eurotunnel has said that it would have committed at least £33m on these types of projects irrespective of the settlement,” said the report.

P&O Ferries has also launched legal proceedings against the DfT and the PAC said grounds included state aid and breach of procurement law.

PAC chair Meg Hillier (Labour) said: “The taxpayer has been landed with a £85m bill with very little to show for it following the rushed procurement of ferry freight capacity.”

She added: “In just four months’ time, on 31 October, the UK is expected to leave the EU yet momentum appears to have slowed in Whitehall. Departments must urgently step up their preparations and ensure that the country is ready.”

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