Arklow Shipping was ‘just a prospective investor probably in a long line of others’
Chris Grayling’s Brexit ferry fiasco has taken a further twist after the reported backer of the startup company with no ships that was awarded a £13.8m contract said it never had a stake in the venture.
Sources at Arklow Shipping, which operates 55 dry bulk vessels in northern Europe, said it had been in talks with Seaborne Freight twice last year but it “never had any agreement” with either Seaborne or the Department for Transport (DfT) to run a service from Ramsgate.
It raises further questions over the transport secretary’s decision to award Seaborne a contract to operate a ferry route between Ramsgate and Ostend in the event of a no-deal Brexit.
The government cancelled the contract at the weekend, saying it had become clear Seaborne could not fulfil it because Arklow had decided “to step back from the deal”.
Sources at Arklow said it had considered investing in Seaborne and providing two ferries but it saw itself as “just a prospective investor probably in a long line of others”. When it was discovered last week that Seaborne did not have a port agreement in place in Ramsgate, it decided not to pursue its talks any further.
“If you don’t have an agreement with a port, how can you run a ferry service?” the source said. “We never had an agreement with Seaborne, so when it was reported that we were a backer, that was not the case.
“Seaborne approached us a year ago and we had no further contact until the end of December. There was nothing signed, we were just prospective investors that they had approached like many others I imagine. We had no agreements with Seaborne or with the Department for Transport.”
Downing Street said on Monday that Theresa May continued to have full confidence in Grayling amid calls for his resignation over the ferry fiasco.
The contract with Seaborne was announced at the end of December and was quickly subject to ridicule after it emerged that the company had no ships and appeared to have copied and pasted terms and conditions on its website from a pizza delivery company.
Arklow wrote to Grayling on 18 January stating that it intended to provide equity finance for the purchase of two vessels and an equity stake in the project. However, in the last week it discovered there was no deal for access to the port and it decided not to proceed.
The DfT said Arklow Shipping’s backing had given it confidence in the viability of the deal, and it stood by the due diligence carried out on Seaborne Freight.
Grayling is under further pressure to explain how Seaborne was awarded the contract after weekend reports that Ramsgate authorities could not afford to run the port.
The contract was cancelled a day after Grayling contacted Thanet district council to ask it to postpone a budget that would have shut down parts of the port for use by freight shipping.
Questions remain about the viability of Ramsgate’s port for use post-Brexit. It can accommodate ships up to 180 metres long, but modern ships are typically 230-250 metres.
John Davis, a member of the Ramsgate Action Group, said: “You can’t run a double-decker bus service out of a single-storey garage on the side of a bungalow – that’s the problem.”
Questions remain about the procurement process after the DfT relied on an emergency exemption provided for by the Public Contract Regulations Act to award the contract. Eurotunnel has accused the government of “anti-competitive” and “distortionary” behaviour.
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