There are subtle and complicated financial schemes (in French: “scams”), which to succeed require an agreement between the different stakeholders, such as politicians, bankers, senior civil servants, etc. Generally, business is done after a distribution of income has been established among the participants. But sometimes greed makes everything fail.
The Circuit of Wales project is a magnificent example in this area, all the more interesting because it took place in broad daylight. A contractor has proposed building a circuit in Wales, creating thousands of jobs. To do this, he asked to be given hectares of public land, and of course subsidies.
Some Welsh people pointed out that this land belonged to the community, that all the circuits in the world were loss-making (therefore subsidized), and that the Silverstone Circuit – the largest in the United Kingdom – employed fewer than twenty permanent workers.
It would have taken a lot more than these few disparaging remarks to upset the promoter, who signed a contract with Dorna in 2014 to host a Moto GP from 2015 to 2019, with a possible extension until 2024. The only small detail, there is no had no circuit. No matter, it was decided to organize it in Donington. But the Donington Park Circuit, having not received the promised funds, canceled. It was then decided to use Silverstone, a circuit at that time put up for sale by its owner the British Racing Drivers Club (BRDC), who gave up selling it in February 2017, due to a lack of a buyer.
Meanwhile, the Circuit of Wales promoter continued to do business. Preferably with other people's money, which is why he decided to borrow £210 million, which would have brought his total debts to £373 million. He obviously asked the Welsh Government to act as guarantor with the financial lending organizations.
It is unclear whether the Welsh Government is ungrateful or humorless. Still, he has just refused to act as guarantor for the reason that “ It is believed that there is a very significant risk that the total debt of £373 million for the entire Circuit of Wales project will be classified as Welsh Government capital expenditure.
“Over the next three years this would have had the same impact on Welsh Government budgets as if we had already spent the money and would have significantly limited our ability to deliver current and future projects to improve infrastructure, housing , hospitals or schools. »
This was the final nail in the coffin for the Circuit of Wales. But not in that of its promoter, who in the meantime had bounced back and sold another project to politicians. Thus the Economic Secretary Ken Skates announced this Tuesday that “ The Welsh Government is therefore today committing to create a new automotive technology business park in Ebbw Vale (editor’s note: site initially planned for the circuit), with funding of £100 million over 10 years, with the potential to support 1 new jobs. We will begin with the delivery of 500 square feet of land currently in public ownership. »
Sources: with the BBC et bbc.uk
Illustrations: Fantasy Land
