The multi-million pound plan to create Circuit of Wales has stalled.
Developers of the £357 Million 800-acres motor sport complex above Ebbw Vale have failed to get Welsh Government to underwrite the project and its future is now in great doubt unless it can be refinanced, but talks are continuing to try and rescue the deal.
Welsh Government Economy Minister Edwina Hart in a letter to the First Minister Carwyn Jones yesterday said about £9 Million of public funds have been spent on the scheme over recent years but final advice from civil servants and external advisors was not to underwrite the investment by Aviva.
A decision on loan support had to be taken by today and now the public will not back the project it will mean the complex may be further delayed while new backers are sought, or it will be shelved.
In her letter to the First Minister, the Economy Minister said Welsh Government had originally been asked to put up £16 M to create 6,000 jobs but the “final ask” of the Circuit was to guarantee the £357.4M entire project as well as the £16 M, over 20 times the first request. Attempts to share some of the cost with several local authorities also failed due to budget restrictions and Mrs Hart said Aviva was not even willing to guarantee 20% of the cost itself.
This week, the Welsh Government said they would consider a guaranteeing 80% of the project costs but the Circuit board could not secure any real private risk capital and the option was not possible to take up. Mrs Hart concluded, “It is important we keep the door open to any new investors who might be able to take this project forward.”
The decision yesterday will force a rethink on the future of development of MotoGP which was intended to run at the circuit but because of delays has seen events in Silverstone, where it may remain for a few more years. The likelihood of a automotive motor-sport cluster being centred on the circuit is also diminishing unless a substantial new backer is found for the complex of track, hotel, business units and retail area.