A ferryless ferry firm that was awarded a £13.8million government contract in December 2018 for extra ‘Brexit-resilience’ crossings has appointed a voluntary liquidator and will go out of business owing almost £2 million.
Seaborne Freight began negotiations to run a Ramsgate-Ostend ferry service in 2017 but the service did not materialise on the proposed March 2018 start date.
During the 2018 Christmas period news emerged that Seaborne Freight had been awarded a government contract worth £13.8million to provide extra ferry capacity to UK ports in the event of a no deal Brexit on March 29 – despite having no ferries and no track record.
By January Britain and Ireland’s largest union, Unite, called for then transport secretary Chris Grayling to resign in the wake of the ‘no-deal Brexit’ ferry service contracts.
The £107 million deal with three firms, including Seaborne Freight, was slammed for ignoring the role of Eurotunnel. At the end of the month a Parliament select committee questioned the legality of the government contract awards to the three ferry companies, particularly Seaborne Freight.
In February 2019 the government contract with Seaborne was terminated. The Department for Transport 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.
This month Seaborne lodged a resolution to wind up with Companies House and a document to say voluntary liquidator Quantuma had been appointed.
According to the documents the firm has assets of around £39,000 in computer equipment, furniture and cash.
But it owes almost £2million, made up of £1.2m to trade and expense creditors, a £400,000 loan, £323,000 in directors loans and a £100 corporation tax bill to HMRC.
In the beginning…
The company had been in negotiations with Thanet council over the proposed service since 2017. A start date of March 2018 came – and went- with not a ferry in sight.
It followed an announcement by former Ostend mayor Johan Vande Lanotte in October 2017 that a ‘basic agreement’ has been made for the ferry line.
When asked by The Isle of Thanet News whether a suitable ferry was available for the operation the Ostend mayor said he ‘thought’ there was.
Only one vessel was identified out of three proposed for the route, the former Dover-Calais ferry MS Nord Pas de Calais. To date no ships have been bought or chartered by Seaborne Freight.
The announcement had been made in the run up to the 2018 elections in Ostend, which Vande Lanotte lost.
In April 2018 Thanet council confirmed no contracts had yet been signed with Seaborne but added that discussions were being held with “several parties to consider the future of a potential ferry operation across various routes.”
Then council leader Bob Bayford said work on ferry operations was the priority for Ramsgate Port.
In June 2018 we reported losses at The Port of Ramsgate of £20million had been made since 2010, according to Thanet council’s statement of accounts for each financial year from 2010/11 to 2017/18.
The figures exclude £5million in live export compensation and £3.4million for bankrupt TransEuropa Ferries unpaid fees and charges.
In July 2018 it was revealed Kent County Council was urging the Government to invest in the Port of Ramsgate and make more use of current lorry parking facilities at the Manston airport site as part of preparations for Brexit.
In August 2018 Seaborne Freight said it was aiming to begin sailings at the end of the year – and launched a website advertising the route.
The same month Ramsgate Action Group agreed to pass a motion of no confidence in the management of the port.
The following day Thanet Cllr Bob Bayford announced he had taken over responsibility for Ramsgate port and harbour.
The then Conservative leader said he would be taking plans in a ‘new direction’ and a detailed review of costs and income for both the port and the harbour was underway.
He also revealed the authority would be looking at marina development alongside talks with Seaborne.
Marine Development Limited had previously offered to carry out an appraisal. The firm had been in talks with county councillor Paul Messenger and the Ramsgate Action Group (RAG), and had also met with Cllr Bayford and Thanet council officers Madeline Homer and Gavin Waite offering to produce a feasibility study to create a marina development.
The study would have looked at options for operational integration of the Royal Harbour and Marina Village, accommodating larger yachts, creating a berth for small cruise ships, the possible repositioning of the Royal Harbour based fishing fleet; wind farm support vessels; pilot services and associated support services. Also included is a suggestion for the creation of a hotel and conference centre surrounded by retail outlets, artisan workshops and markets.
In October 2018 a presentation on Ramsgate port and harbour finances resulted in confusion– and a suggestion was made that selling the site could be ‘considered’ . Cllr Bayford denied suggestions that Thanet council was considering selling the port “at that moment”, but said a complete review of the estate and leases was being carried out.
He added: “As part of the review all options are being considered.”
Thanet council pays a £246,000 lease fee to Crown Estates for the land.
In November 2018 Thanet council slammed a request to investigate accusations of potential bribery in officer dealings over proposals for a ferry service at Ramsgate port as “unsubstantiated,”
A report was made by Ramsgate resident Steve Coombes to Cllr Bob Bayford in July alleging a bribe had been alluded to during a meeting regarding proposals for a Ramsgate-Ostend ferry service.
Cllr Bayford took the matter to Thanet council’s monitoring officer Tim Howes who then had a meeting with Mr Coombes. Thanet council said there was no evidence to support an investigation.
A week later Thanet council said the results of a capability review showed 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.’
A spokesman said that with a £26million investment, Ramsgate has the potential for up to 24 sailings a day.
The move was being suggested as a strategy for reducing pressure at Dover if France introduces immediate checks on trucks crossing the Strait of Dover as a result of a no deal Brexit.
The call for the panel followed the presentation of a 1,273 signature petition organised by the Ramsgate Action Group declaring a vote of no confidence in the council’s ability to run the port and harbour and demanding that Thanet District Council create an independent working party to investigate the losses and bring forward a comprehensive regeneration plan within six months.
There has been no publication of minutes from a meeting held later that month.
During the Christmas period news emerged that Seaborne Freight had been awarded a government contract worth £13.8million to provide extra ferry capacity to UK ports in the event of a no deal Brexit on March 29 – despite having no ferries and no track record.
In January 2019 the Jetsed dredger began working at Ramsgate port as part of preparations for a potential ferry service.
Seaborne Freight said it was footing the bill.
The same month Britain and Ireland’s largest union, Unite, called for transport secretary Chris Grayling to resign in the wake of the ‘no-deal Brexit’ ferry service contracts.
The £107 million deal with three firms, including Seaborne Freight, was slammed for ignoring the role of Eurotunnel.
In a letter, acquired by the Financial Times it emerged that Eurotunnel’s chief executive Jacques Gounon had written to Mr Grayling accusing him of engaging in anti-competitive practices, confirming that Eurotunnel could undertake the work and threatening legal action, if similar contracts are not awarded.
The government agreed to pay £33million to Eurotunnel to settle the lawsuit.
Again in January 2019, Thanet council budget papers revealed the authority was planning to axe £630,000 (£730,000 for a full year) from its budget for Ramsgate Port if a ferry service contract had not been signed by the end of this month.
The authority needed to find savings of £1.8 million in order to balance the books. Councillors were told the biggest expense was at Ramsgate Port.
The cut, which includes removing £500,000 to keep the port in a state of readiness for a ferry service, is agreed by Cabinet members as Seaborne comes under increasing scrutiny both locally and nationally.
Seaborne said operations would start in late March – to coincide with the expected UK withdrawal from the European Union – initially with two ships and 200 staff but commentators in Ostend and in Parliament cast doubt on whether this is possible.
At the end of the month a Parliament select committee questioned the legality of the government contract awards to the three ferry companies, particularly Seaborne Freight.
Committee chairman Lilian Greenwood MP wrote to Secretary of State, Chris Grayling MP, demanding answers over the legality of awarding the contracts without a competition process and questioning whether emergency powers applied when a No Deal Brexit was a foreseeable event.
She raised numerous questions in regard to the Seaborne contract, asking what due diligence was carried out, whether steps were taken to establish the experience of the firm’s directors, whether Seaborne ability to deliver was examined, whether there are RoRo vessels available that are suitable for Ramsgate, whether assessment has been made of the work that will need to take place at Ramsgate Port and the funding for it, what border and customs checks will be in place and whether support of a British start-up raises questions of illegal state aid.
Submissions published by the Transport Committee from two experts conclude the contracts were not legal.
On February 7, 2019 Thanet council postponed a decision on whether to ditch the port funding when the budget report was withdrawn following discussions between Bob Bayford and then Secretary of State for Transport Chris Grayling.
Cllr 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.”
Just over 24 hours later news broke that the government contract with Seaborne had been terminated.
The Department for Transport 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 and the shipping firm later said there had been no signed contracts with the company.
The DfT said no monies had been paid to Seaborne and that the government stood by the due diligence carried out on the firm.
In Parliament 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.”
On February 12, 2019 a memorandum to the House of Commons released by the National Audit Office revealed Seaborne Freight was flagged as being a ‘high risk proposition’ before government awarded the firm a post-Brexit extra capacity contract.
The memorandum revealed the Department for Transport planned to invest £3 million of government funds for work to make Ramsgate Port ready for a new ferry service and would have bought 50% of tickets for extra capacity crossings.
It emerged that on December 17, 2018, the Department asked its legal advisers to do a basic background check on Seaborne. These checks included Seaborne’s filing history with Companies House and that no winding-up orders had been made against it. The Department says it was not aware at the time of allegations that were made about the directors of Seaborne and says these “were not substantiated by checks it had undertaken prior to contract award.”
It also revealed that Seaborne said the ‘pizza delivery’ terms and conditions of service on the Seaborne website were “a draft place-holder that contained errors and that its booking system, available only to approved trade customers, will include the actual terms and conditions of sale.”
On February 20, 2019 it is announced Ramsgate Port will receive £136,362 as part of Government Brexit resilience plans.
The written ministerial statement was published by the Ministry of Housing, Communities and Local Government outlining an extra £1.5million of funding – making a total of £3.14million – to be shared between 19 UK ports impacted by the withdrawal from the European Union.
The funding is to “allow them to increase resources to work through the immediate impacts from Brexit, such as ensuring the port’s resilience and potential impacts of greater traffic to surrounding communities.”
On February 28, 2019 Thanet council agrees the budget, including slashing the port funds.
Councillors hear that a Ramsgate ferry service is now off the table with Bob Bayford revealing a deal was supposed to have been signed the day after the original budget was postponed.
It was revealed that a feasibility study for the port – on how else the port could be used- would be completed by the end of 2019.
February 2020: A new study on uses for Ramsgate Port is published and is still under consultation
September 2020: Seaborne goes into liquidation.