Eurotunnel Sues U.K. Government Over No-Deal Brexit Ferry Plans

(Bloomberg) -- The companies that run the Channel tunnel are suing the British government over its award of ferry contracts to handle freight shipments in a no-deal Brexit -- in a lawsuit that comes just days after one of those contracts, with a startup company that doesn’t own any ships, fell through.

Channel Tunnel Group Ltd. and France-Manche SA accuse the government of a “secretive and flawed procurement exercise,” their lawyer Daniel Beard said in court Monday. The companies together form Eurotunnel, which operates the link between the U.K. and mainland Europe.

The lawsuit challenges the government’s award of ferry contracts to Brittany Ferries of France, Danish shipping firm DFDS and U.K.-based Seaborne Freight for additional freight services between Britain and continental Europe.

Those contracts were awarded without a publicized competition and relied on “extreme urgency provisions,” the tunnel companies said in their court filings for Monday’s hearing. It’s unlawful to rely on the urgency provisions and the contracts represent state aid, they said.

A Department for Transport spokeswoman didn’t immediately comment.

On Saturday, the U.K. government canceled a 13.8 million-pound ($17.8 million) ferry contract with Seaborne Freight, a startup company that doesn’t own any boats, to deliver backup ferry service in the event of a no-deal Brexit. The setback prompted cross-party calls for Prime Minister Theresa May to fire Transport Secretary Chris Grayling, the Guardian reported.

The case is Channel Tunnel Group LTD & Anr v. The Secretary of State for Transport, High Court of Justice, Case No. HT-2019-000028

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