Circuit of Wales: What now?

AFTER a long and very bumpy journey for the Circuit of Wales, it seems the project has finally reached the end of the road.

Last week the Welsh Government brought the axe down on the £425 million scheme, ending seven years of speculation.

Announcing the decision last week, economy and infrastructure secretary Ken Skates said the actual public financial stake which would be required would be far higher than predicted, and the number of jobs which would be created would be significantly lower than that forecast by developers the Heads of the Valleys Development Company.

Instead, the Welsh Government is planning a new automotive technology business park on the site, which it says will be funded with £100 million over the next 10 years and could create up to 1,500 new jobs, along with a depot for the planned South Wales Metro elsewhere in Ebbw Vale.

The news received a mixed reaction from Argus readers on Facebook, where Derek Duval said: “The Welsh Government is a joke. This would have brought millions to Wales.”

Eileen Love wrote: “If it had been in Cardiff or Swansea it would have been given the go-ahead years ago, this just shows how much the people in Cardiff care about the valley people of Wales.”

And Ceri Davies said: “What a sad story this is. So much hope put in. Quite clearly a mess from every side involved. Real shame.”

Meanwhile Andrew Read said: “The spin-off in jobs alone would have been worth the investment. Hotels, restaurants, shops, leisure, track days all gone. And many more small businesses that could have benefited from this.”

And Brian Kinsey wrote: “After voting Labour all my life I think I just stopped.”

But others were more positive about the news, with Jessica Oputa saying: “Completely right decision well done Welsh Government” and Matthew Morris writing: “It’s way too expensive and in this economic climate its not worth the risk.”

Meanwhile Paul Williams wrote: “A huge amount of public money on a risky venture. I think the alternative investment in an industrial park makes more sense.”

And Sandra Hale said: “Surely that money could be better spent on our schools and NHS?” while Martin Griffiths wrote: “This has always been a bad idea and now at long last they have admitted that there are nowhere near the number of jobs that were heralded. 6,000 jobs? In Ebbw Vale? Do us a favour! It was a white elephant from the word go. Money is better spent elsewhere.”

The scheme has already cost the Welsh taxpayer more than £9.3 million after the Welsh Government handed the Heads of the Valleys a £2 million grant in 2012 and in May 2016, was forced to pay out more than £7.3 million to Santander after the bank recalled a loan the firm was unable to repay.

Despite there now being no prospect of the project ever going ahead, the likelihood of this money ever being repaid is remote.

And in April the Wales Audit Office released a damning report slamming the Welsh Government for its decision to hand over the grant, saying it had failed to monitor how the cash was used.

The plan for a £425 million race track in Ebbw Vale caused excitement when it was first announced in November 2011, with the idea of bringing a major sporting venue to an area of Wales blighted by high unemployment and deprivation widely hailed as a much-needed shot in the arm for the area.

Despite objection from environmental campaigners concerned about the loss of greenfield land, the Welsh Government was quick to get behind the project, which would have also involved a technology park, hotels and other facilities.

With building work set to get under way in 2013, an agreement was signed with MotoGP to host the motorcycling grand prix at the circuit for five years from 2015.

But, with the project repeatedly stalled and now scrapped for good, the event was instead held in Silverstone, reportedly losing the Heads of the Valleys £1.2 million.

Announcing the decision, Mr Skates said he recognised the news would be met with disappointment

“Politics is about difficult decisions, and today’s in relation to the Circuit of Wales was no exception,” he said.

“I do not take the impact of this decision lightly, and neither do my cabinet colleagues. “We made every effort to make this project work. “However, this is about getting the decisions right, and getting the right investment into Blaenau Gwent and the wider south Wales Valleys, investment that is sustainable, long term and that genuinely benefits local communities.”

But the project team hit out at the reasons for refusal, saying “There appears to be a fundamental misunderstanding of the project risks born by the private sector” and calling for a meeting with the first minister as soon as possible.

A Heads of the Valleys Development Company spokesman told the Argus: “The Circuit of Wales project is very much alive and the team is actively working on a solution to address Cabinet Secretary Ken Skates’ concerns and will be meeting with him shortly to discuss plans in more detail.

“We were pleased he put a great deal of emphasis on an automotive technology park in his announcement, a key component of the Circuit of Wales development which already has a great deal of interest in it. Naturally, it is the associated track and its use as a test / proving ground that makes our technology park of great interest to organisations.

“Our commitment to deliver this project for the people of Wales is as steadfast as ever and we look forward to meeting with the Cabinet Secretary and reaching an agreement that will allow the project to be delivered.”

Meanwhile, opposition politicians have called for an independent inquiry, which the Conservatives, Ukip and Plaid Cymru all calling for an investigation.

Calling the case “a Welsh Labour car crash of epic proportions”, leader of the Welsh Conservatives Andrew RT Davies has said the people of Wales and Ebbw Vale “deserve answers” and “only an independent public inquiry can bring satisfactory answers”.

Meanwhile, Plaid Cymru’s Adam Price, who repeatedly raised questions about delays to the project in the weeks and months before last week’s decision was made, has claimed the Welsh Government made a series of “inaccurate or misleading statements” in the relation to the scheme.

“Sadly this project has been characterised by a series of inaccurate and misleading statements made by the government, ostensibly to justify its own position in the face of potential criticism,” he said.

He added: “As things currently stand no-one, business, media, Parliament or public, can be confident our government is being straight with us. Only a full independent inquiry can begin to rebuild public trust.”

In response to the calls, a Welsh Government spokeswoman, said: “Adam Price and the Conservative Party have consistently questioned our comprehensive due diligence process, which ultimately ensured we did not recklessly gamble hundreds of millions of pounds of tax payers’ money.

“The Welsh Government stands by the due diligence and advice from the ONS (Office of National Statistics) and HM Treasury, and will invest £100 million over the next 10 years in a new Automotive Technology Business Park that will deliver jobs and attract the investment that the people of Blaenau Gwent and the wider heads of the valleys area need.”

One thing is clear – the Circuit of Wales may be dead, but this is an issue we have not heard the last of.Circuit of Wales Timeline

November 2011: The Circuit of Wales is unveiled. Plans are submitted to Blaenau Gwent Council, with an aim of starting building work in 2013. Some environmental groups, including Gwent Wildlife Trust, state their opposition to the plan.

October 2012: The Welsh Government handed the Heads of the Valleys Development Company a £2 million grant. Of this, £300,000 is used to buy Buckinghamshire-based chassis firm FTR Moto.

July 2013: Blaenau Gwent Council grant the project planning permission.

August 2013: The Welsh Government puts the brakes on the project, saying the planning permission needs closer examination. Construction set to begin towards the end of the year and be complete by 2015 or 2016.

March 2014: Developers Heads of the Valleys Development Company say £50 million of public investment is needed in the project.

July 2014: Then-environment minister and Blaenau Gwent AM Alun Davies is found to have broken his ministerial code after he lobbied Natural Resources Wales in favour of the racetrack. He is sacked as a minister but remains an AM. The Welsh Government agrees to guarantee a bank loan to enable the Heads of the Valleys to pay suppliers.

August 2014: A contract is singed to host the motorcycle Grand Prix at the site from 2015 until 2019, with a possible extension to 2024. But it later emerged the circuit would not be ready for the 2015 event and an alternative venue of Donington Park in Leicestershire was chosen.

Feb 2015: Donington Park announced that they would not be able to host the 2015 British MotoGP due to not having received payment by Circuit of Wales backers. Silverstone announced as the new host for 2015 and 2016.

March 2015: A 10-day public inquiry is held to determine whether the 650 acres of common land needed to build the circuit should be deregistered.

November 2015: The Welsh Government agrees to deregister the land. Environmental organisations call it a “black day”.

April 2016: Welsh economy minister Edwina Hart announces the government cannot underwrite the whole 100 per cent demanded by Aviva Investors. Aviva would not guarantee even 20 per cent.

May 2016: The Welsh Government is forced to pay Santander £7.34 million after the Heads the Valleys defaults on its loans.

July 2016: The Welsh Government refuses a second application, which would have required £234 million of public investment.

October 2016: FTR Moto goes into administration with debts of £500,000.

Feb 2017: A third bid, which apparently meets the Welsh Government’s demands to require no more than 50 per cent of the scheme’s funding to be guaranteed by the public, is submitted.

April 2017: A Wales Audit Office report criticises the Welsh Government for the way it monitored how the £2 million grant was used.

June 2017: Ken Skates announces a decision will be made by the end of the month.

June 27 2017: The Welsh Government refuses the application for the third time, announcing instead plans for a £100 million automotive technology park at the site.