Circuit of Wales: £7.35m for Ebbw Vale racetrack unlikely to be repaid

Welsh Government officials have confirmed there is “little chance” of recovering the £7.35 million given to the now-insolvent company behind the ambitious plan for a racetrack in Ebbw Vale.

In response, leader of the Welsh Conservatives Andrew RT Davies accused the Welsh Government of "being taken for a ride by this ghost company".

An artist's impression of the Circuit of Wales track (Image: Newsquest)

An artist's impression of the Circuit of Wales track

The project, which would have involved a racetrack as well as hotel and other facilities on a site in Ebbw Vale, was first announced in 2011, only to be twice turned down by the Welsh Government over concerns around the amount of public investment required.

The £7.35 million was part of £9.3 million of public money provided for the project. It was a guarantee for a loan from Santander Bank to Heads of the Valleys Development Company (HOVDC), which was called in in May 2016.

In July 2020 then-economy minister Ken Skates wrote off the value of the loan, its interest, and fees, totalling £14.9 million.

In a response to a Freedom of Information request seen by the Argus, the Welsh Government said, as the HOVDC had entered into a Company Voluntary Arrangement (CVA) in 2018, and all other associated companies were "insolvent", there is "very little chance of the monies owed to Welsh Government being recovered".

Responding to the news, Welsh Conservatives leader Mr Davies said: “The Welsh Conservatives told the Labour Government at the time that they were being taken for a ride by this ghost company.

Circuit of Wales (Image: Newsquest)

An artist's impression of the Circuit of Wales

“Through the sheer arrogance of Labour ministers in Cardiff Bay, it is now the hard-working Welsh taxpayer who is paying the price.

“For the Labour Government to now say they have taken action to recover this money, whilst research has highlighted that they’ve actually lost at least £7.35 million, really shows how delusional they are.”

In 2017 the Argus reported that the project had fallen apart as the Welsh Government brought the axe down on the £425 million scheme, which ended seven years of speculation.

The project fell apart in 2017 (Image: Newsquest)

The project fell apart in 2017

The plan 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.

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.

At the time 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.