One of the most bizarre sub-plots of the Brexit era came to an end on Saturday morning when the British government stripped a no-deal contingency contract from a ferry company with no ferries.
Chris Grayling, transport secretary, had come under fire over the £13.8m deal with Seaborne Freight to transport emergency supplies from Ramsgate to Ostend if Britain left the EU with no agreement. The company won the contract in December despite having no vessels or any firm agreement with either port.
The Department for Transport said on Saturday morning it had pulled the contract after the company’s Irish backer — a group called Arklow Shipping — pulled out. It said that payment of the £13.8m had always been contingent on Seaborne providing services. It had become clear that the company “would not reach its contractual requirements” after the withdrawal of Arklow, the DfT said.
“The government is already in advanced talks with a number of companies to secure additional freight capacity — including through the Port of Ramsgate — in the event of a no-deal Brexit,” it said.
Layla Moran, a Lib Dem MP, said it had always been obvious that a new company with no ships would struggle to deliver a vital freight services with just a few months to prepare.
“With less than 50 days to put new arrangements in place there are serious questions to answer over how this multimillion-pound contract was awarded in the first place,” she said. “This saga has been beyond satire and it’s a worrying indictment on this government’s lack of preparation.”
Seaborne was one of three ferry groups to win a total of £103m in no-deal contracts in December alongside established operators: Brittany Ferries and DFDS.
At the time the government said it had carefully vetted the company, acknowledging that it was a new shipping provider.
On Saturday a government aide said ministers were looking at various options to replace the Seaborne capacity: “The DFDS & Britanny contracts both have options for extra capacity in them,” he said.
Only a month ago Mr Grayling had insisted that the Seaborne contract was “not a risk” despite the FT reporting growing Whitehall fears about its capabilities.
Ben Sharp, the chief executive of Seaborne, previously ran a business that was liquidated owing money to the UK tax authorities. Mercator International owed £1.8m to creditors in the final year for which it filed accounts, which was the year to March 2013.
Two other directors of Seaborne Freight, Peter Blackmore and Brian Raincock, were also directors of a company called Litigation Protection, which is in liquidation.
As of December Seaborne Freight had negative equity of just over £374,000, according to the most recent Companies House disclosures.
Andrew Gwynne, shadow communities secretary, told the BBC: “It’s just another example of a major disaster on the hands of Chris Grayling, who actually must now really class as the worst secretary of state ever.”