Eurotunnel withdraws suit after $43 million Brexit deal

The U.K. government agreed Friday to pay 33 million pounds ($43 million) to settle a lawsuit that claimed it improperly awarded contracts to run extra ferry services in the event that Britain leaves the European Union without an agreement on future relations.

Eurotunnel filed the suit after the government announced three contracts to provide additional ferry capacity for trucks, including one with a company that had no ships. Eurotunnel alleged it had been unfairly excluded from bidding on contracts totaling 108 million pounds.

The settlement agreement requires Eurotunnel to improve security and traffic flow at the border, helping to speed the flow of urgent shipments, as well as the goods needed by British businesses, the government said.

"While it is disappointing that Eurotunnel chose to take legal action on contracts in place to ensure the smooth supply of vital medicines, I am pleased that this agreement will ensure the Channel Tunnel is ready for a post-Brexit world," Transport Secretary Chris Grayling said in a statement announcing the settlement.

Eurotunnel said the agreement "enables the development of infrastructure, security and border measures that will guarantee the flow of vehicles carrying urgent and vital goods."

Despite allegations that the government was stalling the release of information related to the bidding process, Theresa May's Downing Street office said that settling allowed the government to concentrate on the job of contingency planning in the event of a no-deal Brexit.

The settlement comes amid criticism of Grayling for his handling of a number of issues, including the ferry contracts and widespread travel delays on Britain's train network.

The government defended Grayling, saying he is "leading his department through some very important projects and work."

Meg Hillier, the Public Accounts Committee chair, took a dim view of the situation.

"This was an extraordinary procurement which, as this 33 million pound settlement makes clear, is now unravelling at the taxpayers' expense," Hillier, a lawmaker for the opposition Labour Party, said in a statement. "We will (be) pushing the Department for Transport for clear answers on the circumstances surrounding this agreement with Eurotunnel when it gives evidence to our committee next week."