Government signs up ferry firms for £87m in case of no-deal Brexit
Four companies agree contracts that will help ensure supply of vital medicines
The government has signed contracts worth almost £87m with four ferry companies to help ensure the supply of vital medicines in the event that the UK leaves the EU without a deal.
The Department for Transport (DfT) said Brittany Ferries, DFDS, P&O and Stena Line would be ready to deliver capacity equivalent to thousands of heavy goods vehicles a week from the 31 October Brexit deadline. The four firms will operate on 13 routes from eight UK ports that are less likely to face disruption in the event of a no-deal Brexit: Teesport, Hull, Killingholme, Felixstowe, Harwich, Tilbury, Portsmouth and Poole.
The six-month contracts are worth as much as £86.6m to the ferry operators. If the extra capacity is not needed, including under a negotiated Brexit deal, the government will pay the companies up to £11.5m in termination fees.
Before the previous Brexit deadline of 29 March the government signed deals worth £89m with Brittany and DFDS to secure ferry space in the case of no deal. Cancelling those contracts cost £43.8m plus other costs that took the bill to more than £50m.
Under the previous transport secretary Chris Grayling the government also scrapped a £14m contract with a company after it emerged it had no ferries.
The much lower termination fees raise further questions about the original deal signed by the government. The DfT said it had minimised the potential costs of cancellation this time through a competitive bidding process.
Grant Shapps, the transport secretary, said: “The UK is getting ready to leave the EU on the 31 October and, like any sensible government, we are preparing for all outcomes.
“Our decisive action means freight operators will be ready and waiting to transport vital medicines into the country from the moment we leave.”
The prospect of leaving the EU without an agreement has raised fears about shortages of vital medicines. The government’s Operation Yellowhammer document predicted extended delays to medical supplies because three-quarters of the UK’s medicines arrive via the Channel.
The Department for Transport (DfT) said Brittany Ferries, DFDS, P&O and Stena Line would be ready to deliver capacity equivalent to thousands of heavy goods vehicles a week from the 31 October Brexit deadline. The four firms will operate on 13 routes from eight UK ports that are less likely to face disruption in the event of a no-deal Brexit: Teesport, Hull, Killingholme, Felixstowe, Harwich, Tilbury, Portsmouth and Poole.
The six-month contracts are worth as much as £86.6m to the ferry operators. If the extra capacity is not needed, including under a negotiated Brexit deal, the government will pay the companies up to £11.5m in termination fees.
Before the previous Brexit deadline of 29 March the government signed deals worth £89m with Brittany and DFDS to secure ferry space in the case of no deal. Cancelling those contracts cost £43.8m plus other costs that took the bill to more than £50m.
Under the previous transport secretary Chris Grayling the government also scrapped a £14m contract with a company after it emerged it had no ferries.
The much lower termination fees raise further questions about the original deal signed by the government. The DfT said it had minimised the potential costs of cancellation this time through a competitive bidding process.
Grant Shapps, the transport secretary, said: “The UK is getting ready to leave the EU on the 31 October and, like any sensible government, we are preparing for all outcomes.
“Our decisive action means freight operators will be ready and waiting to transport vital medicines into the country from the moment we leave.”
The prospect of leaving the EU without an agreement has raised fears about shortages of vital medicines. The government’s Operation Yellowhammer document predicted extended delays to medical supplies because three-quarters of the UK’s medicines arrive via the Channel.