The Welsh Government has axed the proposition to fund the troubled Welsh Motorsports project – is this the last nail in the coffin?
There’s nothing like the smell of imminent doom in the morning. Well, there is, but it’s not a particularly pleasant sensation; as the folks over at the MotoGP Circuit of Wales project are finding out. The project to build a British MotoGP venue in Wales has had a tumultuous time to say the least. After suffering a massive blow when private investors backed out amid poor resource management and allocation, all eyes turned to the Welsh government in a plea to fund the £433 million project.
Unfortunately, the plea for help has been struck down by Welsh government in a statement from Welsh infrastructure and economy cabinet secretary Ken Skates, claiming that the amount the track is asking for would pose a significant risk to the government:
Dorna Sports and Circuit of Wales sign historic MotoGP™ agreement http://t.co/8fs092XuZm
— MotoGP™??? (@MotoGP) August 13, 2014
“…due to the way the deal is structured, the current proposal would see the Welsh Government exposed to more than 50% of the risk”.
This is because the £210m underwriting element would carry a higher risk than other parts of the financing package.
As a result, following discussions with ONS [Office for National Statistics] and HM Treasury during the due diligence process, it is assessed that there is a very significant risk that the full £373million debt of the entire Circuit of Wales project would be classified against Welsh Government capital spending.”
– Ken Skates
It’s highly unfortunate, but equally understandable that the government would omit stepping in as a possibility if they were expected to should half of the risk for their return-on-investment. And yet, one can’t help but feel that this result has been a long time coming. The circuit has had an off-again, on-again development period that has led many to question just how capable the people running the project are.
The circuit even signed a five-year deal to host the British round of MotoGP between 2015 – 2019 – although Silverstone has had to step in to fill the gap after it became apparent that the Circuit of Wales was nowhere near completion.
— Motorsport News (@MNmotorsport) June 27, 2017
Despite the depressing results of the potential government intervention, the track still could see the light of day should a private investor decide to intercede. The track itself does appear nearly ready to the outside eye, but who knows what sort of logistical and administrative nightmares await those that would venture in to save the ailing track.
One possible solution for redemption would be the involvement of Dorna, MotoGP’s governing body. Should the administration see enough potential for profit in the track, we may very well see a Dorna-sanctioned bailout occur in the future.