Brexit ferry fiasco costs taxpayers another £50m after Grayling cancels no-deal contracts

Further embarrassment heaped on beleaguered transport secretary, who has faced repeated calls to quit over the controversy

The no-deal Brexit ferries fiasco will cost taxpayers an extra £50m after transport secretary Chris Grayling axed all the controversial contracts.

The Department for Transport (DfT) will be forced to accept termination clauses agreed with the companies, which included a firm which had no ferries.

The settlement comes on top of a £33m payment to Eurotunnel, earlier this year, to settle its legal case over the cross-Channel contracts.

And it piles further embarrassment on the beleaguered Mr Grayling, who has endured repeated calls for him to resign over his mishandling of the issue.

The transport secretary, who has enjoyed Theresa May’s strong backing as an arch-Brexiteer, personally signed the pre-Christmas contracts, including one with “startup firm” Seaborne Freight, which had no ships.

He was forced to scrap that £13.8m contract with Seaborne in February, after its main backer withdrew support – then hand the £33m to Eurotunnel a month later.

The axing of the contracts was revealed by Sky News, following the government agreeing a delay to Brexit instead of pursuing a crash-out departure at the end of March.

Mr Grayling awarded contracts worth a total of more than £100m to three firms to prepare to run extra services from Plymouth, Poole and Portsmouth to ease pressure on the main Dover-Calais route.

After the expected 29 March date of EU withdrawal was delayed, first to 12 April and now to 31 October, the extra services were not required.

The National Audit Office estimated the compensation owed to ferry operators if contracts were terminated at £56.6m, but a Whitehall source said the payout was expected to be around 10 per cent lower.

The DfT told Sky News: “We are reviewing contingency plans to ensure costs to the taxpayer are minimised and are already selling additional ferry capacity back to the market.”

One ferry company told the broadcaster: “Since December, we have changed our schedules, added 20 weekly sailings, disrupted 30k passengers and hired more staff, all to be ready for what is now not needed.”

Labour said the new £50m bill meant the ferry contracts fiasco would “for evermore be a case study in ministerial incompetence”.

“Chris Grayling’s approach to procurement and planning has cost taxpayers tens, if not, hundreds of millions of pounds,” said Andy McDonald MP, the shadow transport secretary.

“His career as a minister has left a trail of scorched earth and billions of pounds of public money wasted.”

The latest payout comes after it emerged that the department was facing a second legal claim over the award of the ferry contracts.

P&O said it was taking action against the government on the grounds that the Eurotunnel payout would put it at a competitive disadvantage.