Ferry giant P&O is to launch legal action against the government after Transport Secretary Chris Grayling bungled a £100m effort to provide ships in the event of a no-deal Brexit.
The Southampton-based company said it had initiated legal proceedings after rival firm Eurotunnel was awarded £33m in compensation after it alleged Grayling’s department failed to use a proper bidding process.
The Department for Transport (DfT) gave £100m to three companies – Brittany Ferries, DFDS, and Seaborne Freight – to provide extra space for freight travelling across the English Channel from Europe.
Despite the multi-million pound award, Seaborne was found to have no actual ships, with Grayling’s department having simply “taken its word” it could deliver on its £13.8m share of the deal.
While Grayling declared “I did see ships”, Seaborne’s part of the deal was scrapped amid mounting scrutiny.
Eurotunnel has said it will use some of the £33m to improve its ability to handle large volumes of freight on its cross-Channel route, where P&O operates ships.
P&O said in a statement on Friday that it was “happy to compete” on a level playing field, but that it felt the Eurotunnel settlement could leave it at a “competitive disadvantage”.
A spokesperson for P&O Ferries said: “We can confirm that we have initiated legal proceedings against the government over its £33million payment to Eurotunnel.
“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 £33million 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.”
A government spokesperson said it was confident it “acted appropriately in reaching the agreement with Eurotunnel”.