The Circuit of Wales, the track which was to be built near Ebbw Vale in South Wales, has been dealt what will likely be a fatal blow. Today, the Welsh Government rejected the request of the Heads of the Valleys Development Company to underwrite the debts incurred for the construction of the circuit.
The HOTDVC, the company that had been set up to build and run the project, had originally requested that the Welsh Government underwrite the full £280 million cost the project had been expected to cost.
After years of negotiation, the estimated costs had risen to £433 million, and the Welsh Government refused the HOTVDC proposal to underwrite half that debt.
The Welsh Government had demanded that the HOTVDC find external investors, and the firm had brought in outside money from UK investment firm Aviva, but Aviva had only agreed to become involved if the Welsh Government had promised to underwrite the project.
With the Welsh Government refusing to underwrite the debt, Aviva’s commitment now looks to be at an end.
The reason given for rejecting the proposal to build the Circuit of Wales is because the Welsh Government did not believe the projections for the number of permanent jobs.
The HOTVDC had suggested that the circuit and its associated technology park would generate 6,000 full time jobs. The Welsh Economy Secretary, Ken Skates, said the project would only create 100 direct jobs and 500 indirect jobs, with a further 500 temporary jobs while the circuit was being built.
Without the backing of either Aviva or the Welsh Government, the Circuit of Wales looks to be doomed. Attempts to raise the necessary funding through private investment only have so far fallen flat. Instead, the Welsh Government will build a technology park on the site.
What this means for the future of the British round of MotoGP is uncertain. Dorna signed a five-year contract with the Circuit of Wales to host the race from 2015.
The contract allowed the Circuit of Wales to host the British MotoGP at an alternative circuit. For 2015 and 2016, the race was held at Silverstone, and it is scheduled to be held there in August of this year as well.
With three years (or rather, three races) left on the contract with the Circuit of Wales, the future of the British MotoGP round is clouded in doubt.
The race in Silverstone in 2017 is almost certain to go ahead, as the plans are already too far advanced to do anything about it. However, where it will be held for the following years is unknown. If the Circuit of Wales is abandoned, then the contract with Dorna will also end.
This situation does put Silverstone in a very strong position with respect to Dorna. Dorna is committed to holding a race in the UK as part of its contract with BT Sport, which broadcasts MotoGP in Britain. Currently, only Silverstone is up to the task of hosting a round of MotoGP.
The recent purchase of Donington Park by MSV, the organization which owns several other circuits in the UK and organizes BSB, could lead to the track being made suitable to host MotoGP, but significant challenges would remain.
The facilities at the track are currently not capable of hosting a MotoGP round, as there is simply not enough space in the paddock to house all of the race trucks, let alone the hospitality.
Should MSV commit to upgrade the facilities, then a return to the calendar could be possible. Until then, the contract is Silverstone’s to lose.
Source: BBC & South Wales Argus
This article was originally published on MotoMatters, and is republished here on Asphalt & Rubber with permission by the author.
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