Am­bi­tious project on the ropes as Welsh gov­ern­ment re­fuses to un­der­write 100% of £357m in­vest­ment

Motorcycle News (UK) - - This Week - By Michael Guy

The planned devel­op­ment of the Cir­cuit of Wales has been dealt a ma­jor blow fol­low­ing the Welsh gov­ern­men­tõs re­fusal to un­der­write 100 per cent of £357.2m needed to start the project.

With pri­vate in­vestor, the in­sur­ance gi­ant Aviva pledg­ing their sup­port on the ba­sis the project is 100 per cent un­der­writ­ten by the Welsh gov­ern­ment, Busi­ness Min­is­ter Ed­wina Hart has now back-tracked and said this level of gov­ern­ment sup­port would be a step too far.

Hart said: Òthe fi­nal of­fi­cial ad­vice rec­om­mends that I should not agree to un­der­writ­ing the £357.2m Aviva in­vest­ment in the scheme for two rea­sons. First the sig­nif­i­cant ques­tion around the vi­a­bil­ity of the project and sec­ondly the un­ac­cept­able risk to the Welsh gov­ern­ment of, in ef­fect, un­der­writ­ing the en­tire project.ó

While it comes as a bit­ter blow to HOTVDC (Heads of the Val­leys Devel­op­ment Com­pany), there is still a hope that the project, which prom­ises to bring a state-of-the-art rac­ing fa­cil­ity to the UK, could go ahead.

While the gov­ern­ment has re­fused to un­der­write the devel­op­ment 100 per cent, they are of­fer­ing to un­der­write 80 per cent - leav­ing an es­ti­mated short­fall of £71.48m.

Car man­u­fac­tur­ers As­ton Martin and TVR have also con­firmed they will re­lo­cate to the Ebbw Vale area.

Michael Car­rick CEO of HOTVDC said: ÒWE re­spect and un­der­stand the Min­is­terõs de­ci­sion on the sup­port for a 100 per cent guar­an­tee for our pri­vate fund­ing. While this was our clear pref- er­ence and re­flec­tive of the ne­go­ti­a­tions we have held over the past six months, we ac­cept that the project will need to progress on re­vised terms.

Òthe Cir­cuit of Wales is a sig­nif­i­cant mixed-in­dus­try devel­op­ment with the po­ten­tial to de­liver wide­spread re­gen­er­a­tion ben­e­fits to the South Wales re­gion. Many ob­servers near to the site will have noted that the pre-en­able­ment works and ecol­ogy ac­tiv­ity has al­ready com­menced and we have a range of con­trac­tors en- gaged on cre­at­ing sus­tain­able em­ploy­ment op­por­tu­ni­ties in this chal­lenged area.

ÒWE will con­tinue ne­go­ti­a­tions with the Welsh gov­ern­ment, the lo­cal au­thor­i­ties and Aviva to ad­vance the devel­op­ment on re­vised terms that will be ac­cept­able to all par­ties.ó

While the con­tro­ver­sial project now ap­pears to have stalled com­pletely, Hart main­tains that the project re­mains vi­able Ð just not on the cur­rent terms.

She said: ÒI donõt take it (the de­ci­sion) lightly as I have al­ready spent £9m. How­ever, I donõt think it is wasted as I do think there is a vi­able project that can be picked up there, but it will be have to be picked up by oth­ers.ó

‘Aviva’s sup­port was on the ba­sis it was 100% un­der­writ­ten by gov­ern­ment’

The pro­posed cir­cuit, 25 miles north of Cardiff, prom­ises world-class motorsport fa­cil­i­ties

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