Extra Payments To Ferry Firms Could Run Into Billions By Brexit Delay

The United Kingdom government would be forced to cough of millions in extra payments so that the no-deal ferry contracts are held in place in vase there is any delay to the UK leaving the European Union, says an article published in The Guardian.

Following the end of one contract with an operator that had no ferries and the £33 million out of court settlement in the court case filed by Eurotunnel, for UK’s transport secretary, Chris Grayling, the additional costs would come as a fresh political blow.

And since the British MP’s have already voted in favour of prime minister Theresa May to seek an extension to article 50, it is most likely that the contracts will now be realised. An extension of the article means that the Brexit would now happen beyond March 29, the pre scheduled date for t same. The cost of the delay could reach £28m, according to the Financial Times.

The terms “included fair and proportionate compensation in a deal scenario, taking account of the significant preparatory work and concomitant costs incurred by Brittany Ferries”, said Brittany Ferries, which has contracts worth £46.6m according the deal.

The firm had already “incurred a series of direct costs and resource commitments”, it said.  That including hiring new staff and changing more than 20,000 bookings, and “the new schedule cannot now be changed, even as an extension to article 50 seems likely”.

The aim of ensuring the contracts is to make sure that there is no hold up in the delivery of imports of medicines and other vital supplies to the UK in the scenario of a no-deal Brexit which could result in chaos on the short Dover-Calais and Channel tunnel routes.

The potential problems caused by a delay to the article 50 process were noted by a National Audit Office memorandum in February.

“If the date of the UK’s exit from the EU changes, and there is still the possibility of a no-deal EU exit, the department will need to decide how it wishes to proceed with the contracts,” the NAO said in February.

“There is no provision for the start date to be delayed, but the department may seek to negotiate this with the operators.”

“As the prime minister has made clear, the legal default in UK and EU law remains that the UK will leave the EU without a deal unless something else is agreed’” said a Department for Transport spokesman.

She added that the priority of the government remain to be able to leave the EU with a deal. But it is also important to push for Brexit with contingency measures because of the role of the government as a responsible one she said, in a manner that would make sure that there is a continued supply of critical goods such as medicines into the UK after the exit.

(Adapted from TheGuardian.com)

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Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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