Saturday, 12 April 2014

Short Circuit

The goodwill shown towards the proposed Circuit of Wales
is quietly turning into suspicions and doubts.
(Pic : Click on Wales)
After numerous delays and bubbling controversies, it's worth returning to the Circuit of Wales saga.

I briefly outlined what the project involves in Formula One, Motorsports and Wales. Jac o' the North also covered it in Vroom, Vroom – The Next Gravy Train? In short, the project proposes a motor sports track, a karting track, various related facilities (hotels etc.) and an industrial park at Rassau to the north of Ebbw Vale in Blaenau Gwent.

The total cost of the project is currently estimated to be in the region of £280million, and is being led by Heads of the Valley Development Company (HVDC). Concerns about some claims made by the developers prompted a BBC Wales Week In, Week Out investigation last month (though it's no longer available on iPlayer), and also an angry response from established motor circuits like Silverstone, Brands Hatch and Donington Park, who fear the project could receive illegal state aid.

As I was preparing this post, news broke yesterday that the EnglandandWales Planning Inspectorate are going to hold a four-day public inquiry in June to determine whether the project will go ahead.

The Jobs Issue

Job creation figures have been criticised by industry experts as wide of the mark - although,
of course, any job creation is going to be welcomed in the Heads of the Valleys.
(Pic : frequency.com)

Last summer, estimates regarding the number of jobs created from the project's backers and developers were in the region os 4,000 construction jobs and 6,000 operational jobs - a total of around 12,000. Following Week In, Week Out, HVDC said the figures are 2,300 construction jobs and between 4,000-6,000 operational jobs.

Yeah, the figures are suspect. But the proposed business park could make an excellent base for the automotive industry (Ebbw Vale is an automotive enterprise zone). It's historically been one of Wales' economic and manufacturing sector success stories and would provide highly-skilled, relatively well-paid engineering jobs.

Prof. Garyl Rees of the Wales Automotive Forum, told Week In, Week Out estimates that the project would create 6,000 operations jobs requires "incredible multipliers" and "doesn't do any good to anybody". He hints the real figure is closer to 1,000 jobs – which is still significant in the Heads of the Valleys, don't get me wrong - meaning the original estimates are only 600% out.

If estimates on jobs are that far out, I doubt it's the only area where there are "issues".

Promising jobs in an economically depressed area is always going to win hearts and minds – rightly or wrongly. Just be sure the numbers add up, because I suspect Prof. Rees is right based on historical precedents.

The Money Issue

There's no deal in place to secure a major event (MotoGP), while the apparent
request for state assistance has been angrily criticised by established circuits.
(Pic : aqueduct.co.uk)
Last August, when discussing the project's finances, I said this :
"There's....the question of how events will be attracted to this new circuit in the face of competition from established circuits - and how much that might cost. It would almost certainly require some sort of capital funding from the Welsh Government at some point."
Although the developers claimed they had the money to build the track itself, the begging bowl has promptly come out, hinting towards a £30million investment from the Welsh Government and possibly up to £20million from the UK Government – a total of £50million in public funds (~18% of the total cost). I don't think it's beyond the realms of possibility that the next round of EU funding will be eyed up too.

The project has already been awarded a £2million loan from the Welsh Government, prompting Antoinette Sandbach AM (Con, North Wales) to call for a Wales Audit Office investigation before any more public funds are put into it.

All this is wasted money if we end up with a track with no events. As of yet, the developers have no deal in place to host the British leg of the MotoGP championship from 2015 – which would move from Silverstone. It's also unclear what other events the Circuit of Wales aims to attract.

It's claimed the Circuit of Wales could generate 750,000 visits a year. MotoGP would probably attract ~250,000 people over a three-day race weekend - a third of the visitor estimates in just three/four days. What about the rest of the year? The only other motorsport event that comes close to those figures is Formula One, and there's no chance of that moving to Wales. Are the visitor figures another very optimistic over-estimate?

You can argue the business park is more economically important than the race track, as at least it would be used all-year round and provide more than temporary hospitality and race-day jobs. So surely the business park should be the priority development, with the race track a nice add-on, not the other way around.

There's feudal remnant at play too. As the Western Mail and Daily Wales recently reported, the Duke of Beaufort (a distant cousin of Bet Windsor – net worth circa £135million) stands to make several million pounds out of this development, as he's the landowner via a claim to the title of Earl of Glamorgan dating back to Chuckles II. The Earldom of Glamorgan is a courtesy tital only used to address the direct relatives of a peer, so AFAIK shouldn't have any value in itself.

Also, as Jac o' the North said, only one person on the HVDC board of directors has any experience in motor sport – and that's as a motorcycle racing manager.

What started as slightly tangy whiffs in the air that make you check your shoes, is turning into a full-blown farmer's field pong.

Here comes the muck spreader....

The Environment & Planning Issue

A Natural Resources Wales u-turn on their objections to
the project has been called into question.
(Pic : Chris Hatch via Gwent Wildlife Trust)
The development is on common land, which means any land lost has to be replaced like-for-like on adjacent upland moors. It's a process the EnglandandWales Planning Inspectorate says could take up to a year, leading to significant delays in planning and – subsequently – construction.

When the plans were first submitted, Natural Resources Wales (the joint environment body established in April 2013) registered an objection, which should've/could've led to the scheme being "called-in" by the Welsh Government and possible further delays.

Correspondence between Welsh Government officials, agents working on behalf of HVDC, and Natural Resources Wales (NRW), were released via a Freedom of Information request last September. The important documents are Nos. 18-18c, which is NRW's response to a request for further advice.

NRW say in 18a (pdf) that, "....from the outset, we have had serious concerns over the scale, location and nature of the scheme as submitted and the likely resultant environmental impacts."

They go on to say that they wanted to work with the developers and Blaenau Gwent Council to ensure the environmental impacts would be mitigated, adding that a lot of work went towards that goal – though all the relevant information should've been provided from the start. They then conclude that the project no longer needed to be called-in by the Welsh Government. A near complete u-turn.

Since then, it's been revealed by BBC's The Wales Report that internal NRW e-mails suggest they've been put under pressure not to object to major developments. Morgan Parry – a well-respected NRW board member who died in January – is quoted as saying :
"I don't know who wrote our submission or how high up the hierarchy it was escalated, but I know that staff are finding it difficult to do anything other than give the same answer as we would have done before....

"The only way our advice on issues such as Circuit of Wales is going to change is if we are directed by (Welsh) government to have regard for other factors over and above the environmental ones. And that, I believe, would be a very sad day."
That day came.

Coincidentally, the minister in charge of the environment, Alun Davies (Lab, Blaenau Gwent), is also the local AM. Quasi-judicial decisions and all that. He is, however, quoted as dismissing criticism of the Circuit of Wales u-turn as possibly the work of "one disgruntled employee".

Big Projects, Big Problems

With all the talk of improved cross Irish Sea connections, has Wales
imported something rather unpleasant from the Irish.
(Pic : tee2i.org)
Personally-speaking, I have no objection to these flagship "big projects". They should be judged on their individual merits and strength of their business/economic case – weighed against the environmental impacts (which should be offset). I don't see the point of protecting every single scrap of  moorland, which is about as unnatural as it comes as it should, ideally, be covered in forest (sheep farming aside).

So in principle, I support the Circuit of Wales. It's just the execution of the project and sheer number of unanswered questions that risks bringing the whole thing down. That's not something limited to this project either, it's almost becoming standard practice in Wales.

For "big projects", the whole process – from planning to construction – has to be transparent.  Figures shouldn't be plucked out of the sky, and key decisions shouldn't be made behind closed doors in a manner that could compromise the independence of major public bodies.
An example of good practice here would be the proposed tidal lagoon in Swansea Bay.

If developers think they'll need public money, they should be up-front about that from Day 1, not drop politicians in it just as the public momentum builds behind a project. It's an underhand tactic, and bounds politicians and other decision-makers to support them in order to avoid becoming public enemy number one. It puts them in a difficult position, so it's not fair on them or fair on us.

We've seen it with RIFW (which has yet to reach a conclusion). Lest we forget Valleywood? We've also seen it with some of the schemes proposed for restoration of open-cast mining sites (like the Teletubby Village at Margam), and Carmarthenshire's dealings with Llanelli Scarlets (also something related from Y Cneifiwr). On a smaller scale, we've seen it in the case of the suspected fraud in the Milford Haven regeneration scheme.

Wales can't afford to become a nation of - what the Irish would call – gombeens; which roughly translates as shady wheeler-dealers with political connections. Labour would be wise not to perpetuate their position as a gombeen-enabler, shoring up their strong claim to be a Welsh version of Fianna Fáil.

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