Circuit of Wales update

Circuit of Wales update

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Discussion

LordOfTheManor

1,267 posts

110 months

Wednesday 6th April 2016
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I think TVR will be ok where ever they go - but would you pick Ebbw Vale !


framerateuk

2,730 posts

183 months

Wednesday 6th April 2016
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Bonkers that they were even considering underwriting that amount - quite right they've pulled out!

Can't see it going forward now. Who knows if TVR will decide to go elsewhere too.

SwanJack

1,911 posts

271 months

Wednesday 6th April 2016
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LordOfTheManor said:
I think TVR will be ok where ever they go - but would you pick Ebbw Vale !
They want / wanted to have a factory next to a track.....They'll go elsewhere

Trev450

6,314 posts

171 months

Thursday 7th April 2016
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SwanJack said:
LordOfTheManor said:
I think TVR will be ok where ever they go - but would you pick Ebbw Vale !
They want / wanted to have a factory next to a track.....They'll go elsewhere
This. Which brings me back to my earlier post and the alternatives which are now Llandow and Pembrey.

ZOLLAR

19,908 posts

172 months

Thursday 7th April 2016
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Trev450 said:
SwanJack said:
LordOfTheManor said:
I think TVR will be ok where ever they go - but would you pick Ebbw Vale !
They want / wanted to have a factory next to a track.....They'll go elsewhere
This. Which brings me back to my earlier post and the alternatives which are now Llandow and Pembrey.
Is Pembrey a big enough draw for TVR? I'd hope so as we'd get to see test mules about the area but I'm not so sure.
Shame about Ebbw Vale track, I know it hasn't been officially canned but it's not looking good is it.

Trev450

6,314 posts

171 months

Thursday 7th April 2016
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Statement from the CEO:


The Circuit of Wales is a significant mixed-industry development with the potential to deliver widespread regeneration benefits to the South Wales region. Many observers near to the site will have noted that the pre-enablement works and ecology activity has already commenced and we have a range of contractors engaged on creating sustainable employment opportunities in this challenged area.

We respect and understand the Ministers decision on the support for a 100% guarantee for our private funding. 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.

– MICHAEL CARRICK, CEO, HEADS OF THE VALLEYS DEVELOPMENT COMPANY

Evanivitch

19,802 posts

121 months

Thursday 7th April 2016
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Trev450 said:
This. Which brings me back to my earlier post and the alternatives which are now Llandow and Pembrey.
Llandow isn't much of a track and doesn't have the best transport links besides being close to Cardiff.

Pembrey I'm willing to bet will be deemed too far west.

Mazington

18 posts

101 months

Thursday 7th April 2016
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http://www.southwalesargus.co.uk/news/14408010.Wel...

Sadly it looks as though the project will no longer go ahead, to me it seems highly unlikely that aviva will find another investor for such a risky undertaking (hopefully they will). Also, well done WAG for messing everyone about for so bloody long and wasting so much cash on this when it seemed like you lot knew it was never going to become a reality.

Ken Figenus

5,678 posts

116 months

Thursday 7th April 2016
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Smelt very fishy all along and that doc on TV with that shifty/evasive guy would have had me running a mile. SIX THOUSAND jobs? Pull the other one... Big shame mind & hope they can salvage something - maybe develop it more gradually?

ETA: "Mrs Hart said it would not impact on the decision of TVR to investment in a new sports car production plant in Ebbw Vale.

He said; "TVR are happy with their arrangement with us, as are Aston Martin."

Nice to see Wales Online have twigged they are sports cars not 'luxury cars' at long last (but still not that she is not a he)!

Edited by Ken Figenus on Thursday 7th April 17:52

framerateuk

2,730 posts

183 months

Monday 18th April 2016
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I'm sure the people in charge of the Circuit of Wales have done exactly what they intended - make a lot of money in the short term before bailing on the project and leaving everyone else to pick up the scraps.

Trev450

6,314 posts

171 months

Tuesday 19th April 2016
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I'm sure you are not far off the mark. It may have a chance of revival though if we get a change of government in the Welsh Assembly next month.

Evanivitch

19,802 posts

121 months

Friday 17th June 2016
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Word from the Valleys is that Welsh government has agreed to underwrite 50% of the investment.

Trev450

6,314 posts

171 months

Saturday 18th June 2016
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Well at least that's a move in the right direction. If Aviva are prepared to underwrite the other 50 percent, then we could have a result.

sospan

2,469 posts

221 months

Sunday 20th November 2016
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Having watched the documentary and interviews with the developers I could hear alarm bells and a smell of fish.
Complete evasiveness.
A mix of assosciated companies paying each other for "work done" with, in a couple of cases at least, the same people owning each company.
Looked like a merrygoround of money.
The claimed money backer (Aviva) not knowing much about claims made when approached.
It looked like a lot of unsubstatiatable claims being made to paint a rosy picture.
I sincerely hope the Welsh Gov see sense before paying in more money.
A potential second Delorean escapade!

Jamesgt

Original Poster:

848 posts

232 months

Monday 21st November 2016
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I can't believe anyone has invested in this. How can anyone justify giving a penny to this project?!

RyanTank

2,850 posts

153 months

Thursday 27th April 2017
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Well I don't think anyone would be surprised to read there's been bad investment of public funds so far rolleyes

Taken from a Facebook post, and posted on mobile. Apologies for any bad formatting etc

CIRCUIT LATEST CONTROVERSY-

'Wales Online' report on 27th August-

A hard-hitting report raises serious questions over public funding given to the Circuit of Wales-

The Auditor General for Wales has strongly criticised the Welsh Government’s handling of £9.3m in taxpayers' money given to the Circuit of Wales project.

The financial watchdog expressed serious concerns about the “limited understanding” of the companies involved in the project to build a £425m racetrack in Ebbw Vale, one of the most deprived parts of Wales.

It also questioned why the Welsh Government allowed money to be used for projects that weren’t in line with the aims of the grant.

In particular it questioned why £300,000 of public funds had been used to acquire a motorbike firm in Buckinghamshire that later went bust; Payments of almost £1m were allowed to another firm run by the Circuit of Wales’ director Michael Carrick “without enough evidence [they] represented value for money”; The Welsh Government did not have any evidence of the firm buying in services “in a competitive and sustainable way” as required in the £2m grant offer letter; Further, the Auditor General said “nearly half of the total value of payments to suppliers” was conducted “with or through related parties” and invoices were approved “without evidence of value for money”.
Altogether the project has received from the Welsh Government a grant of £2m and a loan underwriting facility of £7.33m, which had to be paid to the project’s bank in full in April 2016 when the company was unable to pay the loan.

Economy Secretary Ken Skates is currently deciding whether to provide a further loan guarantee of £210m from public funds, without which the project will not proceed.

Those behind the project claim that together with adjacent developments like hotels and leisure facilities it will create up to 6,000 jobs in one of the poorest parts of Wales, but critics – including Monmouth MP David Davies – doubt its viability.

The inquiry that led to the report was prompted by concerns raised with the Auditor General by Mr Davies.

The use of public funds from the initial £2m grant to buy motorcycle firm FTR Moto in Buckinghamshire came in for particular scrutiny in the report.

In April 2016 the Welsh Government issued an “incorrect and misleading” press statement to the Western Mail claiming no public money was involved in the purchase.

However the report confirms for the first time that nearly £300,000 of public funds was used to buy the firm, which later went into administration with debts of £500,000.

Huw Vaughan Thomas, the Auditor General for Wales, says he does not believe there was any justification for allowing grant money intended to develop a racetrack on moorland above Ebbw Vale to be spent in such a way.

Earlier, officials had advised that the loan guarantee was “very likely” to be considered to be in breach of EU state aid rules and it was approved the same day.

The report said: “The Welsh Government has been unable to explain to our satisfaction why it approved grant funding intended for property development so that HoVDC could acquire a motorcycle engineering company.”

The Auditor General also criticises the Welsh Government over an arrangement under which one company controlled by Circuit of Wales frontman Michael Carrick awarded a consultancy work worth nearly £1m to another firm wholly owned by him.

The rolling contract to undertake regulated investment fundraising was initially signed in January 2012 before any Welsh Government funding. It was not put out to competitive tender and Mr Carrick signed the contract on behalf of both parties.

However, two years later, after requests from the firm leading the Circuit of Wales proposal, the Heads of the Valleys Development company (HoVDC), the Welsh Government authorised payments totalling nearly £1m from HoVDC to Aventa after an official stated in an internal note, “I’m now satisfied that none of the directors of HoVDC would personally benefit from these payments”.

The Auditor General questioned both the evidence for the assertion and the evidence provided to support the payments.

The report stated: “Invoices submitted by Aventa to the Welsh Government for payment approval simply comprised monthly payments of a retainer which, on their own, do not provide evidence of value for money or of services being delivered.”

'Proper standards of scrutiny'-
Addressing concerns about how Welsh Government money was spent by the project, the report states: “Many companies providing services to HoVDC have direct relationships with current or previous shareholders, board members and individuals contracted to provide services to HoVDC and Aventa.

“We have identified nine such relationships between individuals and companies to whom payments involving public funds were made (by or on behalf of HoVDC) with Welsh Government approval, and two further relationships whose costs were deemed eligible but no claims were submitted.

“We have identified that nearly half of the total value of payments to suppliers, excluding bank charges, made involving public funds through the PDG and the loan guarantee were conducted with or through related parties.” However, invoices submitted by related companies were approved by the Welsh Government for payment without evidence of value for money. In many cases, these invoices simply represented monthly retainers without evidence of any actual services being delivered.

In response, the Welsh Government told the Auditor General that officials “had satisfied themselves as to the value for money at the overall project level rather than at the individual service contract level”.

The Welsh Government also approved payment of business and travel expenses before evidence had been provided.

Under the arrangement, HoVDC would then submit actual invoices with its next claim and the Welsh Government would adjust the amount then paid.

Two expenses claims totalling £19,000 were approved by the Welsh Government and paid to HoVDC before the Welsh Government cancelled the arrangement because HoVDC failed to provide sufficient evidence to support the claims.

The Auditor General also criticises the Welsh Government for allowing officials who were championing the project to make funding decisions. He says the roles should have been separated.

Mr Vaughan Thomas said: “Using public money to support private infrastructure projects in Wales can help boost regeneration and economic development. In doing so, public financing needs to be managed robustly, with proper standards of scrutiny, vigilance and oversight.

“It’s unfortunate that, in the case of the Circuit of Wales, we have identified significant shortcomings and so the Welsh Government needs to learn from my report, particularly if it decides to provide any further support for the project to progress.”

The report makes five recommendations to the Welsh Government for improvement, including ensuring that submissions to Ministers for decision approval include all information relevant to any proposed expenditure that may be “novel, contentious or repercussive”, and asking companies applying for financial support whether any transactions involving public funds are to be conducted through related companies, and then undertaking robust due diligence where this is proposed.

The Auditor General’s report made it clear it had not: Examined directly the conduct of individuals or entities connected with the project; Reviewed the viability of the business cases for the construction and operation of the race circuit, or for the overall Circuit of Wales scheme, or tested assertions made by the developers about job creation and economic activity arising from the overall scheme;
Or assessed the merits of providing further publicly funded support to the project.

This is what the Welsh Government said: “We are surprised and disappointed by the decision of the Auditor General for Wales to publish this report within pre-election periods.
“We are also disappointed that a number of key concerns regarding the content and the inferences of the report have not been addressed prior to its publication.
“As a government, we are routinely asked to take on higher levels of risk to support companies and projects than might be acceptable to the private sector. The Circuit of Wales is a complex project, but we are satisfied that we have assessed risk against value for money for the taxpayer and have sought to secure the maximum security available from the developer.
“We are constantly striving to improve, and as a result have already made a number of changes to our business support processes that take into account some of the WAO recommendations, including the PDG approval process and due diligence on related companies.
“The funding support was provided to Circuit of Wales to help develop the business proposition for the circuit, to secure planning permission and private finance.
“We apologise for the mistake that led to incorrect information being issued to a member of the press regarding the acquisition of FTR. Officials answered the question in respect of the guarantee, but overlooked the fact that some of the original grant was used to purchase FTR. There was never any intention to mislead anyone.”

This is what the Heads of the Valleys Development Company said: A spokesman for the company welcomed the report and said the firm was “raring to go to deliver thousands of important jobs, exciting events and valuable visitors to south Wales”.
The spokesman highlighted the fact that the Auditor General had confirmed payments relating to gardening invoices and gardening events, which David Davies MP had raised concerns about, had not been made using public funds.
He said: “We welcome the publication of the Welsh Audit Office report: this report represents a clean bill of health for the Circuit of Wales (CofW) team, our plans and the project and shows that our directors have been completely exonerated of the false claims made over the misuse of public funds.

“The report shows that we have always operated within conventional commercial practices, ordinary company activity and standard accounting processes and, where the specific Welsh Government loan is concerned, very carefully adhered to and implemented advice on spending eligibility provided by the Welsh Government’s relevant officials.

“CofW has at all times been fully transparent, open and clear in its engagement with the Welsh Government. It has assembled a very senior management team with an impressive track record in major infrastructure, regeneration and automotive focused projects, while retaining the support of world-class organisations to deliver what will be a vibrant location for business, sports, leisure, culture and the arts.

“With this firmly behind us, we are ready and raring to go to deliver thousands of important jobs, exciting events and valuable visitors to south Wales.

“It is impossible to underestimate the importance of the Welsh Government loan funding. It was vital during the extended development phase and played a critical role in encouraging private-sector partners to invest substantially in CofW. Such supportive funding, which will be paid back with interest at financial close, has been crucial in encouraging the private sector to invest, and without it our project would not be ready and able to deliver thousands of much-needed jobs in the Blaenau Gwent area.

“The money we received from Government has levered over £425m of unparalleled, premium private investment. This is the most significant private investment programme in this region for 50 years and one that, when up and running, will inject £50m into the Welsh economy every year.

“This £425m is made even more valuable by the enormous potential it unlocks. Once the Circuit is up, running and successful, our achievement will inevitably inspire additional investor confidence, undoubtedly attracting further, vital investment into all parts of Wales.

“We have proven that the money is all in place. We remain in confirmatory due diligence with the Welsh Government and its advisers and, once we receive a positive decision, will move forward with construction in the very near future.

“We encourage all parties to now get firmly behind the development that will provide another key building block in the resurgence of the South Wales UK automotive sector, deliver visitor numbers of 750,000 a year, create thousands of independently validated new jobs, and transform the economic future of the South Wales valleys.”

This is what Nick Ramsay, chairman of the National Assembly’s Public Accounts Committee, said:
“The Auditor General’s report highlights several significant weaknesses in the Welsh Government’s handling to date of its multi-million-pound support package for the proposed Circuit of Wales project.

“I am particularly concerned that the Auditor General has identified a lack of Welsh Government oversight of payments made by the project to related companies, and also the use of taxpayers’ money to purchase a Buckinghamshire-based engineering company that later went into administration.

“Once again we see an apparent lack of robust governance around the Welsh Government’s use of public money to fund private companies, as this committee found with Kancoat and the Regeneration Investment Fund for Wales.

“The Public Accounts Committee will want to examine all of these matters in detail in the near future.”

Ken Figenus

5,678 posts

116 months

Thursday 4th May 2017
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I refer the honourable gentleman to the posting almost exactly 12 months ago mentionig the word 'fishy'!

What's the latest on Trevor moving to Ebbw Vale?

Trev450

6,314 posts

171 months

Wednesday 17th May 2017
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Its not over yet but looking shaky - http://www.bbc.co.uk/news/uk-wales-politics-399421...

TimCrighton

996 posts

215 months

Wednesday 17th May 2017
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The Welsh Government has a circuit in Anglesey that would be perfectly capable of taking the events they are looking for at CoW, and for the money that has been wasted so far at CoW they could have funded the infrastructure works to secure them. Good money after bad any further investment in CoW in my opinion.

covmutley

3,012 posts

189 months

Wednesday 17th May 2017
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Certain disaster if this went ahead.