Welsh Government minister for Economy and Infrastructure Ken Skates has announced that his department has rejected the Circuit of Wales’ latest submission for government funding, in a move that marks the end of their involvement in the project and could bring it to a close.
The latest proposal put forward by project bosses at the Heads of the Valleys Development Company was pitched after the government refused to provide more than 50% of the underwriting for the £425 million project. The underwriting is designed to protect public investment in case the project fails after construction has started, and essentially acts as insurance for it’s first 35 years.
It’s the third time that an underwriting application has been rejected by the government in the circuit’s six-year history, with the latest one coming last year after they ruled that it failed to reduce public liability below the 50% target the government had set.
In a statement, the government said that backing the project was too much of a financial commitment in the current climate.
“Over the next three years, this would have the same impact on Welsh Government budgets as if we had already spent the money - and would place a significant limit on our ability to deliver current and future projects to improve Welsh infrastructure, housing, hospitals or schools.
“To give an indication of the scale of the impact, this represents the same cost as building, for example, the planned new Specialist and Critical Care Centre in Cwmbran, 10 schools similar to the new Ysgol Bae Baglan in Port Talbot, or the equivalent of 5,000 new affordable homes in communities right across Wales.”
Originally proposed in 2011 and scheduled to get construction underway in 2013, the site has yet to break ground. However, the Circuit of Wales organisation remain as the rights holders of the British round of the MotoGP championship, signing a ten-year deal with rights holders Dorna in 2014.
However, it's unsure yet how this week's news is likely to affect this year's British Grand Prix or the longer-term future of the event.