P&O Ferries in legal action against Department for Transport over £33m settlement of Eurotunnel procurement claim

P&O Ferries has initiated legal proceedings against the Government over the £33m payment to Eurotunnel to settle its claim over the award of contracts for the provision of additional freight capacity.

A spokesman for P&O Ferries said: "We have repeatedly made clear during decades of providing vital transport services between Britain and the Continent that we are happy to compete with other providers on a level playing field. We also fully accept that it was prudent of the Government to make contingency plans to protect international supply chains in the event of a hard Brexit.

"However, we do not believe that the payment of £33m of public money to Eurotunnel to settle its legal challenge to these plans is fair or reasonable. It is explicitly designed to be invested in the tunnel's infrastructure and if left unchallenged would put our services at a competitive disadvantage."

The Department for Transport had awarded the contracts to Brittany Ferries, DFDS and – most controversially – Seaborne Freight, which had no ferries at the time. The latter’s contract was subsequently withdrawn after a major backer pulled out.

The Secretary of State for Transport had sought to use the extreme urgency provisions in regulation 32(2)(c) of the Public Contracts Regulations 2015 to carry out the procurement. The contracts are said to be for medicines and other high priority goods.

The DfT settled the claim shortly before Mr Justice Stuart-Smith had been due to hear the case in the Technology and Construction Court at the beginning of March. Brittany Ferries and DFDS had been given leave to intervene.

A Government spokesperson said: “This cross-government decision helped protect vital freight capacity for medical supplies to enter the country, in the event the UK left the EU without a deal.

“We are confident we acted appropriately in reaching an agreement with Eurotunnel.”