Circuit of Wales Boss Q&A

Author: Bike Social Sports Reporter Posted: 14 Aug 2014

Following yesterday’s announcement that the Circuit of Wales has signed a five-year deal to host the British MotoGP from 2015 despite not having even started building the venue, we spoke with Michael Carrick, the Chief Executive of the group behind the Circuit in an attempt to clear up a few unanswered questions…

When will you first lift a spade and are you confident the build will start on time?

The programmed schedule is for the building work to begin in March 2015 but before that there is a lot of detailed design, procurement and pre-mobilising that needs to get underway before we start building the circuit. I am confident the build will begin on time.

When will the circuit be ready for use?

2016. We have to agree a date with Dorna but it will be the back-end of 2016, so August or September.

Have you discussed potential dates for the MotoGP round?

Yes, of course. We have the Ashes, we have the Volvo challenge and a number of other things going on in 2016 that we don’t want to clash with, we certainly don’t want to clash with any football or other events in Cardiff. We want this to be the most profiled event in Wales at the time we host it. We want to create all sorts of noise for expressing and showcasing Wales in the same way that the Ryder Cup did. We cannot host two major events in Wales at the same time, the hotel capacity etcetera would be insufficient. MotoGP will book out Wales so we have to find a time and date that works.

How much private funding do you need and how much have you already secured?

We’re in market with £200 million equity to be raised for the project. We don’t know how much we have secured. That’s not meant to be flippant but until people turn up with their chequebooks you’re not there. We haven’t closed our funds so the fund is open to investment and when we reach the target it will be closed. I am very confident of reaching the target.

Carrick with Dorna CEO, Carmelo Ezpeleta

How much public funding will go into the project?

We have applied for £30 million of grant funding. The whole programme is a £315 million investment programme so the public support is less than 10%.

What happens if you don’t manage to raise the £200 million private investment needed?

We don’t need £200 million to build the track, we need £200 million for the full £315 million investment programme. We don’t need anywhere near that to build the track, we’re in the investment programme for our full funding and it won’t all come on day one but we need to raise funds to enter into a contract to build, which is what we’re focused on immediately. There will be other follow on vehicles for enterprise, housing, hotels and commercial buildings but our immediate focus is on sorting the circuit. We’re confident that there are enough investors who have expressed support and currently going through their processes known to our partners to get it done.

What if you can’t raise the money to start, or indeed complete, the build of the circuit itself?

You just keep going. You tend to forget that raising investment is the most inefficient process in the world. It’s horrific. There are gatekeepers, different objectives, lots of people who say they’re going to and then don’t do it, which is why you have to be very vague about who is going to end up being in the investment partnership at the end because things change. We are working with groups of investors, not just in the UK but around the world, about the most exciting investment opportunity in the United Kingdom today. The challenge is it doesn’t look like an energy project or a road or any other scheme but it does give investors the types of risk profile that they are actively looking for. In the past five years they haven’t had many investment opportunities in the UK so this is a scalable, material investment opportunity for sophisticated investors to get long term exposure to one of our leading industries in partnership with Government on a major social impact programme. It hits all the right boxes and investors telling us that as well.

Today is important in boosting investor confidence that there is a partner out there of the credibility and reputation of Dorna who are prepared to commit themselves to the vision of the Circuit of Wales for the next ten years. It’s as good as it gets.

Has Dorna given you any kind of deadline?

No, why would they? They’ve done three hundred of these. They know the challenges of getting governments aligned, getting contractors aligned, working with the planning processes. We just happen have a very sophisticated regime in the UK, compared to other places in the world it could be seen as over regulated and bureaucratic but it does take longer here.

Will public money from the Welsh taxpayer be used to fund a British MotoGP in England next year?

I don’t think we’re going to be using public money to pay for a round of MotoGP outside of Wales. When we reach financial close we will provide all the relevant funding guarantees. The £30 million that the Government is putting into the project is going to go in after our £200 million, so it’s very back-end loaded. Public money will be used for the construction of the Circuit of Wales.

It should be ready by 2015

MotoGP doesn’t tend to draw huge crowds in Britain compared to elsewhere in Europe, can the Circuit of Wales increase spectator numbers?

We’re hoping for a minimum crowd of 80,000. I don’t think smaller crowds for MotoGP in Britain is a result lack of interest in motorsport, I suspect it’s an element of how it is promoted, how it’s supported and how it’s second to Formula 1 at Silverstone. It’s not a great track for MotoGP either, it works but it doesn’t reflect the exhilarating kind of racing fans come to expect of their modern facilities. If you look at the Circuit of the Americas and some other circuits around the world where you’ve got major changes in undulation, blind curves and incredibly demanding corners, you don’t have that at any other circuit in the UK. We are going fundamentally for a place where you can see a lot of action.

Secondly, we’re putting it all in a place where you can see a lot of the track. We’ve got spectator facilities where at most points you will be able to see 60-70% of the track so you are both closer to the action and get to see an awful lot more. It’s easier to get to, you’re on a dual carriageway all the way from London, Birmingham or Cardiff straight to our circuit. We have the modern facilities, designed by the same people who did the architecture for the London Olympics, where you actually cater for the way that people want to interact with their sporting events. You need to have the right quality of facilities and the right spectator flow for it will be attractive not just to single white males who are 28-32 years old. Every other sporting event has grown into the new market place and motorsport needs to improve. I’m pretty confident that what we’re offering is the ability to create a track that improves the experience of spectators, competitors, sponsors, promoters and all other parties engaged.

Why sign a deal when you don’t yet have a circuit?

MotoGP is, by any means, the most important and profiled sporting event in the two wheeled calendar anywhere in the world. This is hugely important in terms of the level of engagement and support. This will be worldwide news in motorsport for weeks. There will be annoyers who come up with the same old “you’re not going to be ready you don’t have any money” but Dorna have done due diligence on us, they’ve done due diligence on the Government and our construction partner. They’ve not come here blind to put pressure on somebody to announce something. They are here because they believe that this is the most important step in UK motorsport to improve the quality of the facilities that will attract and retain audiences in the future that will help create the types of World Champions that Dorna need in the sport. Britain, as most sophisticated motorsports nation, should be better represented in the two-wheeled premier class.

More importantly it means that we’ve got a regeneration programme that transforms one of the poorest parts of our country. I can’t emphasise enough that we started this project with transformational economic change at its heart and motorsport excellence is one of the measures to deliver that.

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