UK-Seaborne Freight hard Brexit contract cancelled after 'no ships' allegations

The British government has terminated a contract with Seaborne Freight to provide extra ferries in the event that the country leaves the European Union without a deal on March 29. The government's decision to award the 14 million pound ($18.1 million) contract in December even though Seaborne Freight did not have any ships had been heavily criticised by opposition politicians and others.

A Department for Transport spokeswoman said on Saturday the contract was terminated after Seaborne Freight's backer Arklow Shipping decided to step back from the deal. "It became clear Seaborne would not reach its contractual requirements with the government. We have therefore decided to terminate our agreement," she said.

"The government is already in advanced talks with a number of companies to secure additional freight capacity -- including through the Port of Ramsgate -- in the event of a no-deal Brexit." The spokeswoman said no taxpayer money had been transferred to Seaborne. She added that for commercial reasons the government had previously not been able to name Arklow Shipping's involvement.

Britain's EU membership means that trucks now drive smoothly through border checks within the 28-nation bloc. But after a no-deal Brexit, even a few minutes' delays at customs for each truck could mean vehicles backed up at ports and queuing on feeder roads on both sides of the Channel. The Department for Transport spokeswoman also said the government stood by the due diligence carried out on Seaborne.

The company had also been criticised when its business terms and conditions showed references to placing "any meal/order", prompting speculation on social media that it had copied the format from a takeaway delivery company. Seaborne has since updated its website. Britain is on course to leave the EU at the end of next month without a deal unless Prime Minister Theresa May can convince the bloc to reopen the divorce agreement she reached in November and then sell it to sceptical British lawmakers.

(With inputs from agencies.)