Huge blow for MotoGP venue Circuit of Wales as funding rejected

The Circuit of Wales project has taken a major hit after the Welsh Government decided against offering the financial guarantee needed to build the prospective British MotoGP venue

Huge blow for MotoGP venue Circuit of Wales as funding rejected

Welsh economy and infrastructure cabinet secretary Ken Skates released a written statement on Tuesday morning confirming the government was rejecting the proposal presented by heads of the £433million project in April.

This was a request that the government "enter into a guarantee of a loan facility of £210million provided by [major project backer] Aviva Investors".

Since then due diligence has been taking place into how many jobs the project, planned for the Ebbw Vale region, would create and how much value it would bring to the local economy.

This process was delayed initially because the Circuit of Wales did not provide enough information with its proposal, but with due diligence now complete Skates said "the potential impact on the public finances of the current proposal before them was too great".

He added that claims of 6000 potential jobs were "significantly overstated", and that by 2024 the expectation would be "little over 100" direct full-time positions.

Circuit development and construction jobs may have added another 500 jobs each to that tally.

Circuit of Wales' proposal met the criteria laid out by Skates last summer that it needed to secure private sector funding for 50% of the project.

But Skates said that "due to the way the deal is structured, the current proposal would see the Welsh Government exposed to more than 50% of the risk".

He explained: "This is because the £210m underwriting element would carry a higher risk than other parts of the financing package.

"As a result, following discussions with ONS [Office for National Statistics] and HM Treasury during the due diligence process, it is assessed that there is a very significant risk that the full £373million debt of the entire Circuit of Wales project would be classified against Welsh Government capital spending."

Skates said that total was the equivalent of building a major hospital, 10 schools or 5000 new affordable homes.

After rejecting the Circuit of Wales, the national government will instead provide £100m of funding over 10 years to build a new automotive technology business park in Ebbw Vale.

Rejection of state funding is a potentially fatal blow to the Circuit of Wales, which was first tabled six years ago but has faced numerous delays and constant questions over its viability.

It signed a five-year deal to host Britain's round of MotoGP between 2015 and '19, with an option for a further five years.

Silverstone has had to step in to keep the race on the calendar because of the Welsh track's constant delays, with that agreement running until this year's British Grand Prix.

If this is the end of the Circuit of Wales project then Silverstone, which wants to keep the race for longer, will be considered favourite for a new deal of its own with MotoGP promoter Dorna.

shares
comments
Marc Marquez: No Honda MotoGP upgrades expected for rest of 2017
Previous article

Marc Marquez: No Honda MotoGP upgrades expected for rest of 2017

Next article

Rins apologises for holding up Petrucci on final lap in Assen MotoGP

Rins apologises for holding up Petrucci on final lap in Assen MotoGP
Load comments
The three factors that crowned MotoGP’s newest champion at Misano Plus

The three factors that crowned MotoGP’s newest champion at Misano

The prospect of Fabio Quartararo clinching the 2021 MotoGP world championship title at Misano appeared small after struggling to 15th in qualifying, while main rival Francesco Bagnaia took pole. Here's how the Yamaha rider turned it around, with help from an ill-fated Bagnaia tyre choice, to secure the crown with two races to spare

MotoGP
Oct 25, 2021
Marco Simoncelli: Remembering MotoGP's ultimate maverick 10 years on Plus

Marco Simoncelli: Remembering MotoGP's ultimate maverick 10 years on

Saturday 23 October marks the 10th anniversary of Marco Simoncelli's death. The one-time 250cc world champion and double MotoGP podium finisher was the ultimate maverick character with big hair, a big personality and an even bigger talent. Autosport pays tribute to a much-missed figure, a decade on

MotoGP
Oct 23, 2021
Why Quartararo has evolved more than Yamaha on his road to the MotoGP title Plus

Why Quartararo has evolved more than Yamaha on his road to the MotoGP title

Fabio Quartararo has his first match point in the 2021 MotoGP title race this weekend at Misano. While the 2021 Yamaha is a much-improved bike to its inconsistent predecessor, its the rider himself who has shown the biggest evolution this season. Oriol Puigdemont delves into Quartararo's growth.

MotoGP
Oct 19, 2021
How KTM has wrestled control of young MotoGP talent from Honda Plus

How KTM has wrestled control of young MotoGP talent from Honda

There once was a time when Honda controlled any young rider who emerged in motorcycling, but its market dominance has now swung to the side of MotoGP rival KTM and, to a lesser extent Ducati. Could this development have significant ramifications for the future?

MotoGP
Oct 12, 2021
Why Marc Marquez has to reinvent himself as a MotoGP rider Plus

Why Marc Marquez has to reinvent himself as a MotoGP rider

Marc Marquez's romp to victory at the Grand Prix of the Americas led many to believe the 'old' pre-injury Honda rider was close to coming back to his full powers. However, the 'old' Marquez will probably never exist again and instead he'll have to adapt to his new reality to return to title-winning ways in 2022

MotoGP
Oct 6, 2021
The Marquez self-preservation that fulfilled a COTA MotoGP “dream” Plus

The Marquez self-preservation that fulfilled a COTA MotoGP “dream”

Marc Marquez scorched to his seventh Circuit of the Americas victory in MotoGP last Sunday with a display reminiscent of his pre-injury form. However, his path to the win across the weekend was in keeping with the current reality of his physical limitations, with self-preservation on Saturday key to his Sunday success

MotoGP
Oct 4, 2021
How Ducati has developed MotoGP's most versatile bike Plus

How Ducati has developed MotoGP's most versatile bike

His third place at Misano made Enea Bastianini the fifth different Ducati-mounted rider to score a podium in 2021. Amid a season that has seen one rider amass the bulk of Yamaha and Honda's success, the Ducati's versatility makes for a potent weapon, but the contribution of a former leading light shouldn't be forgotten

MotoGP
Sep 23, 2021
The next steps in the rebuilding of a stalled MotoGP career Plus

The next steps in the rebuilding of a stalled MotoGP career

Maverick Vinales’ early debut with Aprilia has been one of the most interesting plots of the recent MotoGP rounds. The results may not look standout on paper, but a closer inspection reveals just how much progress Vinales has truly made in understanding a bike that has taken him well out of his “comfort zone”

MotoGP
Sep 22, 2021