Government axes £13.8 million ‘post-Brexit’ contract with Seaborne Freight

Photo John Horton

A £13.8 million government contract with Seaborne Freight to provide extra ferry capacity in the event of a no deal Brexit on March 29 has been terminated.

The firm was awarded the contract in December  despite being a start-up company with no vessels or track record as yet.

The firm, which says it is proposing to run a Ramsgate/Ostend service, had said operations would start in late March – to coincide with the UK withdrawal from the European Union – initially with two ships.

But the Department for Transport has now reportedly said the agreement has been axed as Seaborne would not reach its contractual requirements and the firm’s backer Arklow Shipping has pulled out of the deal.

Arklow Shipping, which is based in Ireland and also has operations in Rotterdam, has a fleet of modern singledeck, box hold and container fitted vessels ideally suited for the carriage of project cargoes, grain, generals and bulk commodities. It does not have ro-ro vessels.

Arklow’s involvement had not been made public prior to the announcement of Seaborne’s contract being terminated. Thanet UKIP leader Chris Wells, who had been in talks with Seaborne when the party held a majority on the council, said on a social forum: “At no time during discussions at TDC regarding Seaborne was the name of Arklow in the conversation.”

A DfT spokewoman told Reuters that the government is in advanced talks “with a number of companies” to secure additional post Brexit freight capacity — including through the Port of Ramsgate.

Despite prolonged negotiations no deal has been signed with Thanet council  or the Port of Ostend for the route.. A service had been mooted to start in March last year but the date came -and went – with no sign of progress.

Under fire

The contract award to Seaborne came under fire from Labour MPs and a Parliament select committee, which last month questioned the legality of the ferry agreements, particularly Seaborne Freight.

The DfT says no monies have been paid to Seaborne and that the government stood by the due diligence carried out on the firm.

In Parliament Secretary of State Chris Grayling previously said Seaborne’s “business and operational plans were assessed for the Department by external advisers, including Slaughter and May, Deloitte and Mott MacDonald.

“These included Seaborne’s plans to charter vessels for service, as is common across many transport modes including airlines and rail operators. We also conducted searches on the directors of Seaborne via a third party, and found nothing that would prevent them from contracting with the Government.”

A spokesman for Seaborne Freight said: “It is with regret that Seaborne Freight is not in a position to add any further comment, as we remain bound by a confidentiality clause with the DfT.”

Budget disruption

The lack of progress also prompted the inclusion of plans to ditch £500,000 funding to keep Ramsgate port in readiness for a ferry operation and axe a further £130,000, totalling £630,000 (or £730,000 in a full year) from Thanet council’s 2019/20 budget.

A report to Cabinet members at a meeting last month said Thanet council would be “at significant risk of overspending the proposed budget,” unless the action was taken.

The authority needs savings of £1.8 million in order to balance the books. Councillors have been told the biggest expense is at Ramsgate Port.

But the budget report was withdrawn  on Thursday following discussions between Thanet council leader Bob Bayford and Secretary of State for Transport Chris Grayling.

Council leader Bob Bayford said that although an ‘uncomfortable decision’ may have to be made to close sections of the port and make cost savings an approach from the Department for Transport would now delay that until a date on or before March 11.

He added that the importance of Ramsgate in Post-Brexit resilience plans had been recognised and the DfT was keen to “keep the option of Ramsgate alive.”

Cllr Bayford said a decision would be made by March 11. It is not clear whether the ending of Seaborne’s contract will now bring this forward.

Brexit resilience

The aim of the DfT contracts with Seaborne until cancellation, DFDS and Brittany ferries, is to 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.

In November Thanet council said the Port of Ramsgate could have the potential to provide enough sailings to divert 3,360 lorry movements per day from the planned Operation Brock queuing system on the M20 and M26 to support ‘post-Brexit resilience.’

20 Comments

  1. How much of the £13.8 million was actually paid to Seaborne – and how will it (taxpayers money) be recovered. Where is the evidence of appropriate due diligence prior to awarding this so-called contract and were there additional arrangement or service fees paid alongside? This really looks like a major con.

    • I am curious about some of that. As I understand it, dredging at Ramsgate started in January at Seaborne’s expense. Where did the money to pay for that come from?

      And while every report on this latest development directs the blame to Arklow Shipping, an Irish company, no mention of this backer has existed before this.

  2. “A UK firm contracted to provide extra ferries in the event of a no-deal Brexit will only be paid if it runs “an effective service”, the Department for Transport (DfT) says.”(BBC, 31st Dec 2018)

  3. After all the talk about Britain being “global” after Brexit, wouldn’t there be a bigger need for port facilities on the northern or western coasts, rather than more ferries in east coast harbours? Wouldn’t we expect to do LESS trade with our near neighbours in Europe, so that we won’t need a lorry park at , say, Manston, or along the M20.
    Instead, we will need extra capacity in northern Scotland or Cornwall to cope with our huge,growing trade with Greenland or Burkina Faso. Or, possibly, this whole Brexit nonsense hasn’t been thought through at all so we end up trying to just reproduce what we already have as EU members but without the arrangements to cope with being “on the outside looking in”.

    • Brittany Ferries are adding 19 weekly return sailings on 3 western channel routes. Le Havre / Portsmouth, Cherbourg / Poole, Roscoff / Plymouth. (freightlink.co.uk 02/01/2019)

      DFDS to provide additional capacity on North Sea routes. Immingham / Cuxhaven, Immingham / Rotterdam, Felixtowe / Rotterdam. (No details of number of sailings in article by marinelink.com 07/01/2019)

      A possible positive might be the reduction of through traffic in Kent, and ease congestion at the Dartford crossing?

  4. What a joke this government is , I can’t ever remember this country having such a poor government. MP’s mostly from the upper class on both parties so removed from the working class. It’s just like a debating club for them over champagne and cucumber sandwiches. If it all goes Pete tong they can just sit back on they millions and leave us to pick up the tab again like we did after they friends the bankers ripped us all of.

  5. It seems to me that people who are opposed to Brexit have been exaggerating and misrepresenting this story for their own ends. For a start, whilst a contract may have been drawn up the DfT has made it absolutely clear that no money has changed hands. So people who are screaming about a waste of taxpayers’ money are just lying. Secondly, the reasons for cancelling the contract reveal that this scheme was being backed by a genuine shipping company with real ships. So, all of the hot air about the company having no ships was also a load of left-wing ranting and raving. Remainers are fond of claiming that people who voted for Brexit were lied to. Maybe they need to take the plank out of their own eye before trying to adopt the moral high ground.

    • And you.

      Do you have any evidence that the state of affairs that’s emerged recently was in the public domain? Do you disagree that the only version was the one pushed by the Department of Transport? That the success of the plan lay with the experience of a couple of guys having worked as officers on a failed ferry? That, irrespective of Arklow Shipping having cargo ships, Seaborne did not have ferries?

      Valid conclusions drawn from the available information, not ‘Remainers’ being mean to you people.

    • So why one might ask was the the contract not given to the company with the ships & the experience instead of a company with no ships & no experience in the industry?

    • Well it has wasted several hundreds of thousands of pounds of taxpayers money – just on the costs of the DfT staff and its legal advisers, never mind any real costs such as te dredging that nobody admits to paying for – other than suggestions that it is Seaborne who have no funds. I’d reserve judgement until Arklow provide a statement proving their involvement “from the outset”. But that would be embarrassing for Chris Grayling, who repeatedly reassured us that he was proud to be supporting an all-British start-up company…I am far from left-wing but can only see lies from Brexiteers and solid, evidence-based concerns from those who would preferto remain.

    • Nice try at deflecting from this Brexit shambles.
      Arklow doesn’t have any ferries. It has bulk carriers. It said it planned to provide equity financing to help procure vessels. But they say they had signed no agreement whatsoever with Seaborne.

  6. I don’t think it is exaggerating to suggest that this whole saga has cast doubt on the abilities of the DFT to take precautionary steps to alleviate the consequences of a no deal Brexit.
    Arklow Shipping are a well respected short sea trading company, handling mainly bulk commodities from smaller ports.They have a chartering arm, which I presume Seaborne were hoping to use to acquire the 4 ferries.The problem really lays with Seaborne, who have proved to be less than forthcoming with any information.
    Had seaborne mentioned Arklow at the outset then some of the criticism could have been avoided.
    As it is the Secretary of State, the DFT, TDC and in some ways Ramsgate, have been subjects of some derision by the outside world.All because a small covey of over optimistic Ferry enthusiasts think a ferry service can be started quickly given a little knowledge and a lot of money. Well, clearly, it can’t, at least not in a matter of weeks.

  7. How many departments can this guy be allowed to mess up more than they already were? Work And Pensions, Justice, Transport-what next? Does he have incriminating photos of Cameron & May? Does this man inspire any level of confidence in anybody? Does his leader?

  8. No surprise here chaps, a brewery without any heavy drinkers to be organised, seems a likely analogy. What did you expect, this country is being and has been run by a bunch of out of touch politicians mainly from the Bullingdon Club brigade, how I long for a principled politician, the Tony Benn type who turned his back on heredity and the silver spoon lifestyle.
    Chris Grayling is a prime example of how someone gets moved from dept to dept leaving a pile of unmentionables behind. I’m with Steve, this man must have some tasty goss on draculas bride and her predecessor, you know, posh boy Cameron, what ever happened to him? Oh I know, he’s been filling his boots and of course his bank accounts ever since he did a runner.
    No surprise here chaps!!

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