May 1, 2019 / 12:14 PM / 25 days ago

British transport minister faces calls to quit after Brexit ferry contracts cancelled

LONDON, May 1 (Reuters) - Britain's transport minister was under fresh pressure to resign after the government stacked up a 50 million pound ($65 million) loss for cancelling contracts to charter extra ferries to bring in essential supplies in the event of a no-deal Brexit.

The decision to award the contracts has been a major political embarrassment after it emerged the government handed out a 14 million pound contract for extra ferries to a company that owned no ferries and published terms and conditions on its website that appeared to be for a takeaway food business.

Then, the government was forced to pay a further 33 million pounds to settle a lawsuit brought by Eurotunnel, which complained that it was unfairly prevented from bidding on the ferry contracts, which were negotiated in secret.

The botched handling of the contracts, led the transport minister Chris Grayling, to be nicknamed "failing Grayling" by local newspapers.

The contracts were originally awarded four months ago as part of the government’s broader strategy to ensure Britain was not left without key supplies.

The government put its contingency plans on hold after European Union leaders agreed last month to push back the date of Brexit to as late as the end of October.

"Chris Grayling and the ferry contracts will evermore be a case study in ministerial incompetence," said Andy McDonald, the opposition Labour's transport spokesman.

"His career as a minister has left a trail of scorched earth and billions of pounds of public money wasted. This country cannot afford Chris Grayling."

The Department for Transport declined to comment.

The National Audit Office, which has issued a report on the government's preparations, previously estimated that cancelling the deals would cost 56.6 million pounds. But a government official, who asked not to be named, said the cost would probably be closer to 50 million pounds.

The official said it was a necessary insurance policy.

But there remains a risk that the United Kingdom could still leave the EU without a deal if the government fails to pass its Brexit deal or the EU fail to agree another extension.

In a further twist, a rival ferry operator, P&O, said last week that it was preparing its own legal action amid claims that the payout to its rival Eurotunnel was unlawful. (Reporting By Andrew MacAskill; editing by Guy Faulconbridge)

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