Thursday, 7 April 2016

Is the Circuit of Wales, another Potemkin village"

I wrote last year  about plalns for St Athan using the term "Potemkin village"
This  was originally used to describe a fake portable village, built only to impress. According to the story, Grigory Potemkin erected the fake portable settlement along the banks of the Dnieper River in order to fool Empress Catherine II during her journey to Crimea in 1787. The phrase is now used, typically in politics and economics, to describe any construction (literal or figurative) built solely to deceive others into thinking that some situation is better than it really is. 

I must  admit that I had my doubts about the Circuit of Wales viability and have fears in 5 years we may find we have a White Elephant on our hands 

motor racing circuit and technology park under development in Blaenau Gwent,  it is a joint venture funded by the Welsh Government and private investors, it is to be situated on the A465 road on the outskirts of the town of Ebbw Vale, 18 miles (29 km) north-west of the city of Newport, and 25 miles (40 km) north of the city of Cardiff. It is intended to be constructed by Heads of the Valleys Development Company.
The circuit is being designed to FIA and FIM standards with the aim of hosting events such as the MotoGP ]Superbike World Championship, Motocross World Championship and the World Touring Car Championship.

However it now seems that despite it being a Joint Venture the Welsh Government  have developed cold feet at a late stage wit the news that hthe firm behind plans for a £357m race track in Ebbw Vale is working on revising the project after the Welsh Government refused to underwrite it.
Economy Minister Edwina Hart said there was a "significant question around the viability" of the Circuit of Wales project which could bring 6,000 jobs.
One wonders why this has happened now.
 Heads of The Valleys Development Company (HOTVDC), said it would try to find a solution.
Insurance firm Aviva has been expected to back the project but HOTVDC hoped the Welsh Government would underwrite the private investment.
Chief executive Michael Carrick said: 

"While this was our clear preference and reflective of the negotiations we have held over the past six months, we accept that the project will need to progress on revised terms.

"We will continue negotiations with the Welsh Government, the local authorities and Aviva Investors to advance the development on revised terms that will be acceptable to all parties."
Mrs Hart suggested in a letter to First Minister Carwyn Jones a guarantee of 80% of the total value of the project may have reduced the Welsh Government's risk to an acceptable level but HOTVDC had not been able to secure "any real private risk capital".

She said

“Obstacles were put in our way as people were disingenuous, but I never lost faith and I and the First Minister wanted to pursue this project vigorously because of where it is going in Ebbw Vale and in what it could have opened up [jobs and investment].
"I have to say that Blaenau Gwent and Monmouthshire are all for this project, because of the good opportunities for the enterprise zone [Ebbw Vale] and for employment. And we have had good dealings with Aviva.
"But from day one there was no clarity and ther
e was only clarity when we became engaged."
Reflecting the pressure she was under Ms Hart said. 
But it has been really quite threatening to some individuals in what has happened in saying how embarrassing it could be if we didn’t do this and that.
"But I am not prepared to be bullied.
“If you are asking for nothing at the beginning, but just some exploratory finance, that is fine. But it then went from to £35m £357m.
"And then on state aid there are issues and they are constantly at the back of your mind.
" But at the end of the day the risk is just too great for me in terms of money and I think Joe Public would think I have gone bloody made guaranteeing £357m.
"I don’t take it lightly as I have already spent £9m. However, I don't think it is wasted as I do think there is a viable project that can be picked up there, but it will be have to be picked up by others.
"Some of the work up there holds us in good stead and we own the IP rights for everything.”
She said that the Welsh Government were prepared to discuss in the last few days a potential 80% underwriting agreement, but that was not acceptable to the project's backers.
Someone  who will not be happy will be local Labour AM  local  Alun Davies whose lobbying for the project broke ministerial rules
On 10 June 2014, the First Minister announced an investigation into a letter Davies wrote to Natural Resources Wales (NRW) re environmental concerns with the proposed development of the Circuit of Wales race track in his own constituency. As well as making up part of his ministerial portfolio, NRW had expressed concerns re the race tracks development.] In an investigation undertaken by Permanent Secretary Sir Derek Jones CMG, his report published on 1 July 2014 concluded that Davies had breached the Ministerial Code.[ The report noted that in March 2013, Davies had been advised by his own department not to lobby even as the AM in the case of the race track, but had ignored this advice and had then written to NRW as the affected AM.[ The report also revealed that the First Minister had contacted Davies in August 2013, after Davies had expressed support for the circuit openly in quote to the Western Mail newspaper.[ Davies faced no punishment by the First Minister, but endured sustained calls for him to resign due to his behaviour.

 But it seems that NRW had already expressed concerns and we must ask the question    whether they were overuled by the Labour Government,
The opposition Parties have reacted  as expected 


Welsh Conservative leader Andrew RT Davies said:

 "Clearly the Welsh Government has to be cautious and careful about the money it spends, but it is ironic that in a week where they've asked for the UK Government to underwrite the future of the steel industry they're unwilling to back what would be an exciting, flagship scheme."
A Plaid Cymru spokesman said it was "devastating news" for Blaenau Gwent and called on the Welsh Government to publish the advice it received.
Eluned Parrott, the Welsh Liberal Democrat economy spokeswoman said it was the "latest in a long line of Labour economic failures over the past 17 years".
And a UKIP Wales spokeswoman accused Labour AMs of being "economically illiterate".
But surely  there must have  be AM from all parties on the viability of this project?
It shows how desperate we are for attract Investment in Wales that politicians  will support  any project how ever fanciful .
I wonder  if the Labour Assembly government have had their own doubts over the viability of this project but were persuaded by the likes of Alun Davies of the helpful publicity such as job creation  scheme  would  gain them
Is the circuit of Wales anotehr  modern equivalen of a Potemkin Village?



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