MotoGP: Circuit of Wales hit by another significant setback
The Circuit of Wales is facing yet another significant setback, after the Welsh Government refused a second bid from the company behind the project, the Heads of the Valleys Development Company, to underwrite the project.
The HotVDC originally requested that the government basically insure the entire investment of nearly £400 million in the project, but the proposal was rejected in the run-up to the Welsh Assembly elections in April.
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They then proposed a new plan that would see the regional government instead underwrite 75% of the costs – but new Welsh Economy Secretary Ken Skates rejected that plan this afternoon, saying that the plan did not “does not provide value for money for level of risk” attached to it with a further 8% of the cost provided by local authority loans.
The Secretary went on to ask for a new proposal to be instead submitted that would see more of the project’s risk – up to 50% – taken on by the private sector. He confirmed the Circuit of Wales’ Michael Carrick and Martin Whitaker accepted this principle and would work on a new proposal.
The £356.4 million million financial backing for the project has been pledged by the real estate division of insurance and financial services body Aviva – but it remains to be seen how today’s decision will affect their support.
It is unclear where this now leaves the project, as it continues to face delay after delay. 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.