Revised investment plans for the proposed Circuit of Wales have been rejected today by the Welsh Government.
Ken Skates AM, Cabinet Secretary for Economy and Infrastructure said in a statement that there was still too much risk put on the public purse by the £370 Million scheme outside Ebbw Vale, particularly in the light of the expected Brexit budget bashing, and private funding must be half of the cost, not the 17% under the new proposal.
Originally the Circuit of Wales developers wanted Welsh Government to underwrite the whole cost if it failed and the private backers would get their investment covered, but after this proposal was turned down the new deal was announced with 75% risk taken by the Government and 8% shared by two local authorities and this is the latest idea sent back to the developers for reconsideration.
In a statement after the meeting with Welsh Government, Martin Whitaker, chief executive Circuit of Wales, said they were confident of reaching a mutually agreeable settlement on the finance.
“The discussions were positive and we welcome the Cabinet Secretary’s support for the development and confidence that a financial proposal that will allow the project to move forward can be agreed.
“The Welsh Government clearly recognises the enormous benefit the development will bring to the people of Blaenau Gwent and the profile of Wales, and in the coming days, under instruction from the Cabinet Secretary, we will work with his team to reach agreement and deliver a successful conclusion to discussions.
“The Cabinet Secretary was comforted that the revised proposal delivered a number of benefits reflected in the Circuit’s revised proposal including:
- there is no risk of EU state aid which was the substantial challenge before the election;
- that the level of private finance that does not require support by government has been substantially increased;
- that the Welsh Government is not required to put any capital funding in the scheme and will be rewarded for supporting the project delivery with a guaranteed fee that equates to £125.4 million over the next 33 years
“As a predominantly privately initiated and financed partnership with government we are confident that an equitable balance of risk sharing can be delivered. The Cabinet Secretary has requested we deliver the guarantee to below 50% of the total project costs and we are confident we can do so over the course of the project.”