The Circuit of Wales developer has struck back at the Welsh Government after it decided not to part-fund the circuit, citing a “fundamental misunderstanding” of the risks involved.
Previously the government had indicated it might guarantee against 50% of the £433million project if the Heads of the Valleys Development Company, met the other half.
Last Tuesday, the Welsh Government’s cabinet secretary for economy and infrastructure, Ken Skates, said the authority would be exposed to more than 50% of the risk and was not willing to fund the project.
In a lengthy statement that replied directly to many of the due diligence findings on the project, the HotVDC insisted the project is “commercially viable”.
“The project is commercially viable even under downside scenarios,” read the statement. “And the Welsh Government would receive a fee of £2.5 million per year, with the project delivering a net economic contribution to Wales of £45 million, every year for the future.
“There appears to be a fundamental misunderstanding of the project risks born by the private sector and we encourage an early meeting with the First Minister to reconsider the decision.”
The report from cabinet also questioned the 6,000 jobs the circuit developers claimed it would create, and said that that was “overstated”.
Instead, Skates claimed “the number of direct full-time-equivalent [FTE] operational jobs would be little over 100” and that “circuit development could create around 500 indirect FTE jobs… as well as approximately 500 FTE construction jobs while the track was being built”.
Responding to this issue, the HotVDC said: “This is factually incorrect and indeed does not reflect the figures we provided during the due diligence process.”
It also revealed that a third-party report it had commissioned claimed that “4,358 permanent jobs and 4,809 part time jobs would be created by the circuit, technology park and property development.
“Even if we did make the claim of 6,000 jobs this does not support Mr Skates’ statement that, ‘both the circuit and the technology park, according to due diligence, would likely fall substantially short of the 6,000 jobs figure’.”
Instead of backing the Circuit of Wales initiative, the Welsh Government intends to go ahead with a new automotive technology business park on the same land in Ebbw Vale, Blaenau Gwent county.
The HotVDC added: “At a time when the Welsh Government is trying to demonstrate that Wales is ‘Open for Business’, the rejection of this significant infrastructure project will do little to breed confidence within the private sector for future investment in the country.”