Crunch time for the Circuit of Wales?

Author: Oli Rushby Posted: 06 Apr 2016

It's crunch time for the Circuit of Wales

The Circuit of Wales is reported to be in jeopardy after a row erupted over the legality of state funding for the project.

The debate surrounds the £32 million of taxpayers’ money the Welsh Government are set to plough into the project and whether that amount could be considered ‘state aid’, which would be illegal for such a project under EU law.

Overnight, Welsh press have reported should the Government and the company behind the circuit, the Heads of the Valley Development Company not come to an agreement before the Welsh Assembly dissolves for the upcoming election then the project is essentially ‘dead in the water’.

However, a source close to the project has told Bike Social this is not the case and such discussions highlight the advanced stage it has reached.  

The argument against the case put forward that any Government funding amounts to state aid is that the Circuit of Wales is ‘not just a race-track’ as it’s set to ‘regenerate’ one of the poorest areas of the country.

Touching on a topic at the forefront of recent news, a circuit source has said “The project is going to use 650 to 700 tonnes of British steel and local labour, creating 400 jobs in the first six weeks of construction and 1600 across 24 months.”

However, it’s not the first time allegations have been made regarding the legality of state funding for the Circuit of Wales. 

In March 2014, then Silverstone Managing Director Richard Phillips wrote to David Cameron saying “An injection of funds by the Welsh and/or UK governments to the Circuit of Wales project would amount to a transfer of state resources, which gives Circuit of Wales an economic and selective advantage over other circuits. As such, it could amount to illegal state aid.”

Mr Phillips’ argument surrounded the fact that the UK’s other race circuits are privately funded and would therefore be at an unfair advantage to a Government-supported venue.

Bike Social sources claim allegations the project could collapse should the Welsh Government pull funding are unfounded and Welsh Assembly Member for Blaenau Gwent (the borough in which the Circuit of Wales is set to be built), Alun Davies has also referred to such reports as ‘speculation’, although has said he’ll be meeting with Edwina Hart, the Minister responsible for signing off the government funding, today to discuss the situation.

Despite not yet being built, the Circuit of Wales is already contracted to host the British round of the MotoGP World Championship until 2020, with an option to extend until 2025.