South East Wales

Two weeks to show £425m Circuit of Wales funds in place

Circuit of Wales Image copyright Circuit of Wales

The firm behind the £425m Circuit of Wales race track in Blaenau Gwent has been given two weeks to show it has enough financial backing.

Economy Secretary Ken Skates said the Heads of the Valleys Development Company (HOVDC) should make "faster progress" with the scheme in Ebbw Vale.

It is claimed the project could create up to 6,000 jobs.

A spokesman for the Circuit of Wales said it welcomed Mr Skates' "desire for a speedy resolution".

In July 2016 Mr Skates said the firm had to find at least 50% of the budget and underwriting from private sources.

But on Wednesday, he told AMs he was "concerned" the scheme had been "publicly debated for many years" without sufficient private finance being found.

"The people of Ebbw Vale deserve to know if this project is going ahead and crucially if so when," he added.

Brian Meechan, BBC Wales business correspondent

It is a very significant move because ultimately it is the latest sign of growing frustration from the Welsh Government about how this company has been approaching this project.

Initially the company came to the Welsh Government and said it wanted 100% of the project, over £400m, underwritten by taxpayers.

The Government said to go away and look at that again as it may look at potentially underwriting half of it.

But it is believed ministers still haven't heard anything concrete from the company about who its investors are and whether it has the money in place.

The company has been trying to get that extra funding - it brought in a merchant bank to find that extra investment.

With this deadline, the ball is very firmly in the Circuit of Wales' court.

There are many people in the business community, including investors, that privately are not sure about the strength of the business case for this project.

"I am keen to avoid more opportunity costs associated with the project that does not have a final date.

"I have therefore written to the Heads of Valleys Development Company today asking them to make faster progress on this project and asking for evidence to be provided to me of named investor term sheets within the next two weeks."

The partners claim the development could attract 750,000 visitors a year and inject an estimated £50m into the Welsh economy annually.

Although insurers Aviva have been named as the scheme's likely financial backers, HOVDC has been in negotiations with ministers over the taxpayer shouldering some of the risk.

Earlier this year the firm announced Extreme Sports Company as its new business partner.

A spokesman for the Circuit of Wales said it welcomed Mr Skates' "desire for a speedy resolution which ties in with our own proactive timetable".

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