The government has revealed details of its £33m payout to Eurotunnel, confirming it will hand over three instalments of £11m over the next three years.
The first payment, due by 1 April 2019, is legally earmarked for expenditure on projects at the Folkestone terminal.
Details of the out-of-court settlement were published on the government’s website and confirm that none of the payments will be recoverable.
“Under the settlement agreement, the government is obliged to pay Eurotunnel £33m in equal instalments over the next three financial years, with the first payment to be made by 1 April 2019,” the statement says.
This confirms suspicions raised by the SNP’s justice and home affairs spokesperson, Joanna Cherry, on Monday that the £33m was a conventional out-of-court settlement with no exit clause in the event of Theresa May’s deal being voted through the Commons next week.
The health secretary, Matt Hancock, who was dispatched to take questions in place of the transport secretary, Chris Grayling, told MPs that the £33m was a “maximum exposure”, hinting that some of the money could be recoverable.
Confirmation that the payments will be made whatever the outcome of Brexit negotiations will heap further embarrassment on Grayling.
Eurotunnel took the government to court for allegedly breaching procurement rules after Grayling awarded three contracts for transporting Brexit medical supplies to ferry companies, including one company that had no ships. The contract with Seaborne was cancelled last month after its backer revealed it had no contract with the port of Ramsgate.
The government statement on the settlement spells out clear conditions on how Eurotunnel can spend the money. “In order to achieve value for money for the taxpayer, the government has agreed with Eurotunnel that they will use this settlement sum only to fund certain categories of projects furthering the wider public interest,” it added.
Under the deal, Eurotunnel has undertaken not to spend the money on new trains or at its terminal in Calais unless it is related to counter-terrorism measures. It will instead use the money to “develop, enhance and upgrade the Channel tunnel site’s infrastructure” after Brexit. This will include counter-terrorism measures, improved access to the Folkestone terminal and the development of a freight yard at nearby Dollands Moor.
The £33m payout triggered fresh calls for Grayling’s resignation, which were first voiced last month after he was forced to scrap the £13.8m contract with Seaborne when its main backer withdrew support.
Cherry, a barrister, told MPs on Monday: “Not a penny will be recoverable because it’s not for a contract [with Eurotunnel] – it’s for an out-of-court settlement to avoid a finding that the government was in breach of the law.”
