The government’s award of a £13.8m ferry freight contract to a company that does not own any ships and has no track record as a cross-Channel operator has raised eyebrows. Seaborne Freight is one of three firms sharing a combined £103m of contracts, and is the only one that is not an established ferry company.
Why is extra ferry capacity required?
The Department for Transport says the prospect of a no-deal Brexit leaves the UK facing a “situation of extreme urgency” in terms of cross-Channel cargo capacity. It anticipates severe congestion around UK ports caused by increased border checks on freight that would be required by EU member states.
Without securing additional ferry capacity, the DfT says, delivery of critical goods such as food and medicine could be delayed and there could also be significant wider disruption to the UK economy.
Why is Seaborne getting £13.8m?
Paying ferry companies to make more freight capacity available at multiple ports will minimise the potential disruption, the DfT says. One of these ports is Ramsgate, where Seaborne has been planning a service to Ostend for two years. Berths at the port are not yet big enough to accommodate freight ferries, but Seaborne says dredging work will begin within days and services will be ready to go by the end of March.
Who are Seaborne?
The company has never run a cross-Channel service and does not have any ships but says it plans to charter some. The London-based company’s chief executive, Ben Sharp, is a former Royal Navy submarine officer, and its board includes several ferry industry veterans.
Sharp told the Guardian that Seaborne had funding in place from City investors including well-known financial institutions, which stand ready to provide loans and equity to fund its operations. However, the company’s website provides scant detail and a section marked “timetable” does not contain any information as yet, perhaps due to the lack of ships.
How was the contract awarded?
According to the Official Journal of the European Union, which logs government procurement contracts, the awards were made after a “negotiated procedure without a call for competition”. But the DfT says the tender was “competitive and open to a wide range of operators”.
What if there is a Brexit deal?
The DfT says the contracts provide for all circumstances, including a scenario in which the UK comes to a deal with Brussels. In that case, the government will try to sell the freight capacity back into the haulage market. It is not clear who the buyers would be.
Who else is getting funds?
DFDS of Denmark is getting £42.3m and the French firm Brittany Ferries is getting £46.6m.
Which other ports are involved?
As well as Ramsgate, the government is seeking extra capacity at Poole, Portsmouth, Plymouth, Immingham and Felixstowe.