Funding gap threatens to derail £400m testing facility

PLANS for the world’s first integrated train and rail infrastructure testing facility, which promises to create more than 1,100 permanent jobs in one of the most deprived areas of Wales, are now unlikely to be realised without the Welsh Government making a bigger financial commitment.

- SION BARRY

The £400m Global Centre of Rail Excellence (GCRE), first proposed by the Welsh Government seven years ago, is earmarked for a 700-hectare site - the size of Gibraltar - at Onllwyn in the Dulais Valley.

The project would consist of two electrified 7km looped testing tracks for rolling stock and infrastructure, both designed to operate 24/7 year-round. It would also include train storage and maintenance facilities, a control centre, a 100-bedroom hotel, as well as training and R&D functions.

The land, which the Welsh Government acquired from opencast company Celtic Energy, already has planning consent and, subject to securing finance, is shovel-ready.

A ater phase, outside of the £400m fundraise, could also see a rail-related technology park, potentially privately funded.

The project has received expressions of interest from more than 200 firms looking to utilise its facilities, including Network Rail, Transport for Wales, and leading train manufacturers such as Hitachi and its Spanish rival Construcciones y Auxiliar de Ferrocarriles (CAF), which has a train-making factory in Newport.

GCRE Ltd, which is wholly owned by the Welsh Government but operates at arm's length, has secured £50m from the Cardiff Bay administration and £20m from the UK Government, originally signed off by the former Conservative Westminster administration. This leaves it needing to raise around £330m.

Initial fundraising activities, conducted through a public procurement exercise, focused on securing equity investment. While the process was narrowed down to three potential institutional investors, including those in the US and the Middle East, a deal could not be secured.