The Government of Wales has stated that it could not back the Circuit of Wales PPP project unless the risks sharing in the project are balanced. The Government wants a 50/50 split in financing and underwriting the project with the private sector.

We informed in early April that the Government of Wales confirmed it could not guarantee 100% of the necessary funding for the £371 million (US$491 million) Circuit of Wales PPP project in Ebbw Vale. However the economic uncertainty due to Brexit has worsen the situation. 

This announcement came after Aviva Investors agreed, in February, to provide most of the funding for the project. 

Heads of Valleys Development Company (HoVDC), the current project owner, communicated that it will continue with negotiations in order to satisfy all parties.

Economy Secretary Ken Skates said:

"Including guarantees and council loans, the latest proposal involved Welsh Government underwriting about 75% of the total cost of the project, with councils underwriting a further 8%. Unfortunately, despite the efforts of the project backers, this leaves only around 17% of the risk being taken by the private sector.

My door remains firmly open and I have urged them to revise their bid in such a way where the private sector takes more of the risk in order for this project to be taken forward. 

We need to see at least 50% of this project funded and 50% of the risk underwritten by the private sector to justify value for money for Welsh Government and the public purse."

The Circuit of Wales will be located north of Ebbw Vale close to the Rassau Industrial Estate. The development will span 336 hectares and represent the most significant capital investment program in automotive and motor sports infrastructure in the UK in the last 50 years.

The main race track is 3.5 miles in length and there will be additional smaller circuits for karting, motocross and 4x4, hotels, retail space and a technology park, among others. The circuit is being designed to FIA and FIM high standard levels.

In February we reported that just weeks ahead of the beginning of works on the project, Alun Griffiths, one of the main contractors, had been replaced by civil engineering firm Roadbridge. Spanish construction company FCC is the project’s main contractor.