The UK government has agreed to pay Eurotunnel, a public company that operates the Channel Tunnel between the UK and France, £33 million to settle a legal battle over three contracts it awarded to ferry firms as part of its no-deal Brexit preparations.
Eurotunnel said the contracts were handed out in a "secretive" way and it was not given a chance to compete.
As part of its settlement with the government, Eurotunnel has agreed to make some improvements to its train terminal.
London is preparing to leave the EU on March 29 but has not yet secured an exit deal with Brussels. As part of the preparations for a possible no-deal Brexit, the Department of Transport (DfT) contracted three suppliers – Brittany Ferries, DFDS and Seaborne Freight – in December 2018 to provide additional cargo capacity at ports other than Dover in the event of congestion on roads heading to and from the coast.
The DfT stated in the documents outlining the agreements that an "unforeseeable" situation of "extreme urgency" meant there was no time for the contracts to be put out to tender as normally done with public procurement, Britain’s public broadcaster BBC reported.
Shortly after the contract was awarded, it emerged that one of the three suppliers ̶ Seaborne Freight ̶ had no ships and had never run a ferry service.
Chris Grayling, the UK Secretary of State for Transport, has been heavily criticised for the Seaborne deal, which would have been worth £13.9 million (Dh67.6 million).
Eurotunnel wrote to Mr Grayling in January to complain that it had not been considered when the contracts were awarded, despite it actually running a cross-Channel ferry service.