The Department for Transport appear to be backtracking on the terms of a contract worth £13.8million awarded to Seaborne Freight – the firm that proposes to run a Ramsgate/Ostend ferry route despite not yet having any vessels.
The firm was one of three which received a share of £107million in contracts designed to provide extra ferry capacity to UK ports in the event of a no deal Brexit on March 29.
The others are French company Brittany Ferries, receiving £46m and DFDS with an award of £47m.
Yesterday the government department insisted Seaborne had been carefully vetted before being allocated the award but today (December 31), amid widespread criticism of the deal, the BBC reported that a spokesman now said the company would be required “to meet a number of rigorous time-staged requirements” before any cash was handed over.
The DfT spokesman also told the BBC if an effective ferry service is not running from Ramsgate by March 29 – when the UK exits the European Union – the contract could be cancelled.
The aim of the awards was to use UK ports to help alleviate pressure on Kent’s roads which would come with a ‘hard border’ and could lead to a backlog of traffic, particularly HGVs, trying to access Dover Port and the Eurotunnel.
The ferry firms would add extra crossings to their timetables. It was not clear how the terms for Seaborne Freight, which as yet is not recorded as owning any vessels, would work but the procurement document says there will be “additional freight capacity on ferry services between England and Belgium.”
Members of Ramsgate Action group had questioned the award of the contract to “a company that has no ships, no funds, no identified investors, no employees and no real premises,” and no apparent phone line for the Belgian end of the route. The group added: “It is beyond belief that Chris Grayling could approve handing over £14 million of taxpayers’ money in these circumstances.”
A shipping industry insider added that it was “incomprehensible that neither the Baltic Exchange, nor one of the big six shipbroking companies in the London were approached to advise on such an operation.”
Seaborne Freight said directors and shareholders have been working over the last two years on a business plan to reintroduce the Ramsgate to Ostend ferry service from early 2019.
A spokesman said: “During the development phase and pending the finalisation of robust funding arrangements, the business has been financed by the shareholders.”
Thanet council has said Ramsgate Port is one of the UK’s largest municipally-owned commercial ports and is the second closest to the continent, meaning it could play a significant part in providing additional capacity.
Yesterday Seaborne issued a statement to say two ships would be running on the Ramsgate/Ostend route next March, which four vessels by the Summer.
But the port cannot currently accommodate the larger cross-Channel ferries due to the restricted size.
Despite negotiations with Seaborne Freight no deal has yet been signed for a ferry service from Ramsgate. A service had been mooted to start in March but there has been no update on progress to date.
There has not been a cross-Channel operation at Ramsgate since the collapse of TransEuropa in 2013 which left Thanet council owed an unpaid debt of £3.4 million accrued by the ferry firm in port fees.