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Channel Tunnel Brexit works funded in out-of-court settlement

01 Mar 2019

EUROPE: On March 1 the UK government agreed to pay Eurotunnel up to £33m in an out-of-out-court settlement to bring to an end the Channel Tunnel concessionaire’s legal challenge against the Department for Transport’s decision to award ferry companies DFDS and Brittany Ferries contracts to provide cross-Channel freight transport services following Brexit.

The directly awarded ferry contracts were agreed in December to secure the cross-Channel freight capacity needed to ensure the movement of critical products such as medical supplies in the event that the UK leaves the EU without a transitional agreement on March 29.

However, Eurotunnel objected that it had not been invited to negotiate a similar contract.

The government said it had opted for an out-of-court agreement with Eurotunnel to avoid ‘a lengthy legal case and the uncertainty it creates’, and ensure that ‘vital goods would not be put in jeopardy in a no-deal scenario’.

Under the settlement, Eurotunnel has committed to implement measures to improve security and traffic flow at the border and ease congestion at the terminal.

Eurotunnel said the agreement would ‘ensure that the Channel Tunnel remains the preferred route for vital goods to travel between the EU and the UK’, and enable the development of infrastructure, security and border measures ‘that will guarantee the flow of vehicles carrying urgent and vital goods and that will keep supply chains essential to both industry and consumers moving’.

Chair of the parliamentary Transport Select Committee Lilian Greenwood MP of the opposition Labour party, said it was ‘no surprise’ that the Department for Transport had settled the case, because ‘it was obvious from the start of this procurement that the Secretary of State and the Department for Transport had got themselves into a mess’.

A third contract with start-up Seaborne Freight was cancelled after it became clear the company would not be able to provide the required ferry services.

The Permanent Secretary at the Department for Transport has asked the Comptroller & Auditor General, Sir Amyas Morse, to review the procurement process which led to the contracts being awarded.

Risk of disruption

Meanwhile, the Rail Freight Group has warned that there is a risk of ‘severe disruption’ to rail freight services between the EU and UK in the event of a ‘no-deal’ Brexit. RFG said the European Commission’s proposed contingency measures were focused exclusively on the validity of safety licenses for cross-border rail infrastructure managers, but railway undertakings and train drivers would also require valid certification.

RFG urged the Commission to give operators a transitional period of 12 months to allow sufficient time for concluding the necessary requirements for licensing, and said any contingency measures for rail must be equivalent to those for road and air transport.

‘Although we hope that the UK government and the EU will avoid a no-deal exit, we must have the necessary provisions in place to ensure that vital freight trains can continue to operate’, said RFG Director General Maggie Simpson. ‘We welcome the move from the Commission to start establishing this framework, but this must be concluded as a matter of urgency and include all the necessary provisions to keep trains moving.’