Labour raises concerns for Thanet debt in wake of Seaborne failure

 

Labour's Andy McDonald has suggested the Seaborne Freight disaster could have left the local council, which owns the port, massively out of pocket once again.

Thanet Council was hit with a multi-million bill after the last company to try and run freight services from Ramsgate collapsed in 2013. 

The shadow transport secretary led what became a second grilling of Chris Grayling in the Commons this afternoon over the Seaborne Freight failure, accusing him of presiding over a 'Whitehall farce' and 'off the Richter scale' levels of incompetence.

This time the questions came in the wake of the termination of the contract and a Transport Network exclusive revealing that shortcuts were taken on the procurement process.

Mr McDondald said: 'His [Grayling's] decision to award the contract to Seaborne led Ramsgate port owner Thanet Council's budget deficit to grow by £2m in the last year. His personal intervention to halt the budget vote last Thursday has compounded those losses.

'What's more tax payers face a legal bill of nearly a million to fight euro tunnel following his decision.'

In reference to the Transport Network exclusive, Mr McDonald said: 'He [Grayling] told the house last month that this procurement was done properly. It has since emerged that the DfT took shortcuts on the procurement of the Seaborne Freight contract. It was signed off by a subgroup of a subgroup and the main form of oversight, the Procurement Assurance Board, never looked at it.'

Mr Grayling reiterated that no money had been paid to Seaborne Freight.

However he would not specify how much in terms of civil service time and resources had been put into the failed contract, who had paid for the dredging of Ramsgate Port or how much was paid by his department in legal fees. 

In a cautious acceptance that Thanet Council should not be left out of pocket, Mr Grayling said in response to a question from a local Conservative MP: 'We have to be very mindful of the financial position of Thanet council and make sure they are not exposed to financial risk as a result of the broader work on resilience that is taking place right the way across Kent.'

Transport select committee chair, Lilian Greenwood, said there remained legal questions over the contract and asked how the prospect of a no deal, which prompted the Seaborne contract, was 'unforseeable'.

Mr Grayling offered new information by stating 'the thing that prompted the [contract] move was a change to the assumptions to the levels and length of disruption that might arise in a no deal Brexit'.

He went on to state that DfT had made provision with the other two established ferry companies involved in the £108m resilience plans to provide ferry capacity in the event of a no deal Brexit.

Arrangements were made with 'Brittany Ferries and DFDS for extra capacity on two additional routes that were not in our original mix' he said.

'Those are options we are free to take up and we will be having discussions across government in the next few days to assess current needs current and forecast and see if those are required.

Chair of the Public Accounts Committee, Meg Hillier, said: ' The Department for Transport waited until September 2018 to start thinking about the risks to freight transport across these important routes and entered into a £13.8m contract with Seaborne Freight despite it being a new operation, owning no ferries, and not having binding contracts to use the specified ports.

'We will be pressing the Department for answers on how it awarded its three new ferry contracts, what it is doing to manage risks and exactly what it intends to do now it has axed the contract with Seaborne.'

PAC takes evidence from DfT and Defra on Wednesday, February 13 for its inquiry Brexit and the UK Border.

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