The Circuit of Wales is edging ever closer to becoming a reality. BBC Wales is reporting that UK insurance giant Aviva will be backing the Circuit of Wales project, and providing funds to allow building work on the track near Ebbw Vale in South Wales to start. Construction will take some time, however, and Silverstone will continue to host the British round of MotoGP for the 2016 and 2017 seasons, the race only moving to the Circuit of Wales from 2018 onwards.
The news that Aviva is to provide financial backing for the Circuit of Wales still leaves many questions unanswered. It is not clear from the reports by BBC Wales exactly how much money Aviva will be putting into the track. The circuit needs £300 million in private investment, on top of roughly £30 million in public funding in the form of loans. Whether Aviva will be providing the full £300 million for the Circuit of Wales, or sufficient seed money for building work to start is unclear.
Senior management at the circuit told BBC Wales that they were close to securing full funding. The project's CEO Martin Whitaker told the BBC that financial negotiations were at a very advanced stage, and they expected to be able to make a full announcement soon. Once those details have been finalized, then a complete timeline for construction of the project would be announced.
Even once funding is in place, the circuit will still face formidable challenges. The provision of public funds for the circuit is certain to come under attack from other tracks in the UK, none of which receive public money. Jonathan Palmer, head of MSV, which owns several UK tracks including Brands Hatch, and the driving force behind the British Superbike championship, has stated publicly that MSV will challenge the provision of public funds to the Circuit of Wales.
There are practical problems too. A 600mm high pressure gas line, which supplies a large portion of South Wales, crosses the site, and the environmental plan imposes several severe conditions on dealing with the gas pipeline, demanding that large groups of people are kept more than 195m away from the pipeline, and that building be done with care.
That is the type of detail which will be dealt with during the due diligence phase, in which financial negotiations currently find themselves. According to the BBC Wales story, that phase should be completed soon. Once it is, we shall soon find out just how solid the financial basis for the circuit is.