Latest news with #GCRE
Wales Online
4 days ago
- Business
- Wales Online
£400m flagship Welsh project needs more money to become reality
£400m flagship Welsh project needs more money to become reality The Welsh Government may need to put more money into the planned Global Centre of Rail Excellence 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. 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 later 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. Article continues below 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. GCRE, under its chief executive Simon Jones, then entered into discussions with a long-term debt provider for the project. While the potential interest rate on the debt was agreeable, the undisclosed institution is now unlikely to enter into a deal. GCRE is back out to market and remains hopeful of securing investment, whether in the form of debt, equity, or a combination. However, there is a realisation that it is highly unlikely a funder(s) would be willing to provide the £330m gap, and it will require the Welsh Government to commit additional capital as well as potentially providing guarantees. While it is not clear what any additional requirement would be, having already committed and spent £50m on the project – which includes the acquisition of the site, running costs for GCRE, and enabling work to date – it would come down to affordability and the risk to reward appetite of ministers. The Welsh Government is already facing competing funding demands in areas like health and education. The project falls under the responsibilities of Cabinet Secretary for Transport Ken Skates. A decision could potentially be left to the next administration following next spring's Senedd election. The UK Government could provide additional finance, but it could also give added confidence to investors and strengthen the business case by ensuring that all train operating companies and rail infrastructure equipment manufacturers utilise the facility. Rail operating franchises, as they expire, are already coming under state control and will sit under the new body, Great British Railways. The £400m cost of the project has been maintained through value engineering. However, inflation is a concern if work on the project does not start soon. New strategy to boost SMEs needs alignment between UK and Welsh governments READ MORE: Wales bucks UK trend with a fall in unemployment READ MORE: An economic assessment by professional advisory firm PwC suggests that over ten years – excluding the planned later phase Sarn Helen Technology Park – GCRE could create 1,100 permanent jobs, with a £300m gross value added (GVA) impact on the local area over and £1.2bn over its lifetime. The project has also been forecast to generate a 15-fold economic return for every £1 invested. GCRE is confident it will be able to put a number of private sector funding options to the Welsh Government following the summer recess. Mr Jones said:'The aim of development work to date has been to de-risk the GCRE project to a point where private investors could be attracted to finance the bulk of construction and, ultimately, take forward a business that could act as a new economic magnet for the region. Our intention is to operate GCRE as a successful business, but it's also an opportunity to show how that can be done creatively, working with government and industry partners in an active way. 'We knew how challenging the task would be. It has never been easy to attract major sources of private investment to northern areas of the South Wales Valleys, and GCRE is a development not without risk. Looking back, our biggest barrier was that we began our search at the very time when the UK's economic headwinds were at their strongest. The last few years have been a challenging time for every major project looking for large-scale capital funding. 'I indicated in January that initial feedback from investors was that, while they applauded the vision and could see the strategic need for such a facility, the construction and early-years commercial revenue risks of GCRE still remained the biggest barriers to commitment. Despite international interest from both the Middle East and the US – from the rail and energy sectors – we still have not secured the funding we need. 'As a result, GCRE has taken longer to move towards the construction phase than we had originally intended. In recent months, that has led to some challenging headlines about the delay to the project and questions about its ultimate viability. There's no hiding from the fact that this isn't where we wanted to be. 'But I also know from my own background in major projects that it's not unusual, particularly for a development as large, complex, and novel as GCRE. One thing I know for sure, though: the prize is worth it. We must find ways to grow the economy in Wales, particularly in de-industrialised areas of the country, and GCRE is still one of the most interesting and creative home-grown ways in which we can do that.' Mr Jones said he remains positive that the project will be realised for a number of reasons. He added:'First and foremost, we are still in discussions with potential investors. Now, with the support of the Welsh Government, we are exploring additional ways to get investment secured, and that work will continue in the coming weeks. This includes looking at ways to further de-risk the capital construction of the project and underpin the early years revenue risk of the facility. 'The UK, like most countries, needs more large sites on which to develop new infrastructure of this kind, and with GCRE located on a site as large as Gibraltar, it's one of the complementary ways in which we can show a strong commercial return on the investments made. 'Third, the economic and social imperative of getting more projects like GCRE to succeed only grows with time. Everyone is heartened to see that work has now begun constructing the new electric arc furnace at Tata in Port Talbot. But there is no escaping the fact that the site will employ fewer people than it did in the past, and that many thousands of jobs could be lost as a result of the transition across the supply chain. The UK Climate Change Committee recently reported that more needs to be done to create alternative forms of employment in the region. 'The UK Government has certainly shown through its new industrial strategy that investment in new, place-based infrastructure is vital not only to kick-start economic growth but to build greater resilience in coalfield communities. Using the green industrial revolution to help give de-industrialised areas a new economic future has never been more vital and an important part of the next few months will be seeing what more the UK Government can do to support the Welsh Government's investment choices at GCRE. Article continues below 'What sustains the team at GCRE is the firm belief that the project is a transformational one—something that will help to rebuild local prosperity in an area of the South Wales coalfield through the creation of new jobs, identity, and pride for this and future generations. The task isn't easy, but we'll keep working flexibly with our partners to achieve that goal.' Mr Jones confirmed that GCRE is also in discussions with a number of data centre and renewable energy firms with a view to potential investment at the site. This would sit alongside the train testing project. If the rail project is abandoned, the whole site would be available for alternative investment. Even if the project secures the required private sector funding through a public–private partnership approach, it could still have implications for the Welsh Government's budget if the ONS continues to deem the business as being part of its accounting framework. This means that whatever amount is raised would be reduced from its block grant. A possible workaround could be reclassifying GCRE as a community interest company.
Wales Online
26-06-2025
- Business
- Wales Online
£300m railway project in Powys delayed by five years risks local job opportunities and economic boost
£300m railway project in Powys delayed by five years risks local job opportunities and economic boost A report to a Powys County Council committee has revealed that one of the biggest employment projects in the county is running five years later than planned The project would potentially introduce hundreds of jobs (Image: Local Democracy Reporting Service ) A rail track testing facility project near Ystradygynlais has experienced significant delays, now running at least five years late, according to recent disclosures. The plan promises substantial economic benefits by potentially introducing hundreds of jobs and is anticipated to inject approximately £300m into the local economy. During a Powys County Council's Governance and Audit committee session, councillors together with lay members reviewed a report on the risks the council faces from repurposing the former Nant Helen coal drift mine into a state-of-the-art Global Centre of Railway Excellence (GCRE). Diane Reynolds, director of economic development and growth, informed the committee that they can expect GCRE to submit additional planning applications for the site to the council in the upcoming year. For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here Planning permissions confirming the fundamental viability of redeveloping the location were secured from both Powys and Neath Port Talbot council's planning committees back in 2021. In the previous year, GCRE had secured approval from planning authorities to extend the time permitted to deliver detailed designs for the project. A site masterplan shows how the GCRE will take shape. (Image: Local Democracy Reporting Service ) Article continues below The facility was initially slated to be up and running by 2025, however this no longer appears to be the case. Ms Reynolds clarified: "These things change over time they are looking to put in a revised planning applications." The upcoming plans are set to include the refurbishment of a footpath encircling the area, which could become part of a new cycle route. She added: "I think they are looking at improving access as well." Committee vice-chairman and lay member John Brautigam expressed concern, stating: "There is a risk stated in the report that there is a skills deficit for the jobs that would be needed there. What is being done about that?". Ms Reynolds responded that they have a massive programme to attract people into the world of engineering. She explained: "They have been conducting STEM (Science, Technology, Engineering, and Mathematics) sessions with Year Six pupils, reaching out to all of the local schools, providing training and sparking interest among young people in the types of skills that will be required for the future operation of such a site. "We don't anticipate the site to be operational until 2030 so we're talking five years. "They have also been working diligently with the Welsh and UK Government on any individuals that will be displaced as part of the steelworks ceasing. "They have been re-training local people in the rail industry so they can assume positions in the future." Mr Brautigam responded: "Thank you I'm glad to hear there is some activity in that direction anyway." Committee chairwoman and lay member Lynne Hamilton suggested that another report on the development should be presented to the committee in the future to ensure that the council's risks are being "managed appropriately,". Article continues below
ITV News
25-06-2025
- Business
- ITV News
Global Centre of Rail Excellence: £400m rail testing facility 'delayed for five years'
A state of the art rail testing facility near Ystradgynlais is at least five years behind schedule, it has been revealed. On Friday, Powys County Council councillors received a report outlining the risks to the council associated with transforming the former Nant Helen opencast mine and Onllwyn washery site into a Global Centre of Railway Excellence (GCRE). The development has a potential to create hundreds of jobs and could revitalise the economy bringing in an estimated £300 million into the area. The committee were told by director of economic development and growth Diane Reynolds that further planning applications from GCRE for the site were expected to be submitted next year. Planning permission which agreed the principle of developing the site were agreed by both Powys and Neath Port Talbot council planning committees back in 2021. Last year GCRE had an application to extend the timescale allowed to provide detailed plans for the facility, approved by planners. The Welsh Government first revealed plans for the site back in 2018, and it was originally expected that the site would be operational by 2025. Ms Reynolds explained: 'These things change over time they are looking to put in a revised planning applications.' Future proposals would include restoring a footpath that goes around the edge which could form part of a cycle way. 'I think they are looking at improving access as well,' said Ms Reynolds. Committee vice-chairman and lay member John Brautigam said: 'There is a risk stated in the report that there is a skills deficit for the jobs that would be needed there. 'What is being done about that?' Ms Reynolds said: 'The GCRE have a huge programme to entice people into engineering." 'They have been doing STEM (Science, Technology, Engineering, and Mathematics) sessions with Year Six pupils going out to all of the local schools providing training and getting young people interested in the types of skills that will be needed for the future running of such a site. 'We don't expect the site to be up and running until 2030 so we're talking five years. 'They have also been working really hard with the Welsh and UK Government on any people that will be displaced as part of the steelworks ceasing. 'They have been re-training local people in the rail industry so they can take up positions in the future.'
BBC News
25-06-2025
- Business
- BBC News
Ystradygynlais rail track testing complex at former mine delayed
A rail track testing facility set to bring thousands of jobs to an area of mid Wales is at least five years behind schedule, it has been permission was granted to transform the former Nant Helen coal drift mine near Ystradygynlais, Powys into a Global Centre of Railway Excellence (GCRE) back in was originally expected the site would be operational by this year, but last year GCRE was granted more time to provide detailed Friday, councillors received a report outlining the risks of the project and were told the need for revised planning permission to be submitted meant the site was unlikely to be completed until 2030. The development has a potential to create hundreds of jobs and could revitalise the economy bringing in an estimated £300m into the earlier this year, GCRE said "limited funds" had been set aside for the site's Reynolds, Powys council's director of economic development and growth, said future proposals would include restoring a footpath that goes around the edge of the site, which could form part of a cycleway."I think they are looking at improving access as well," she concerns about skills deficit in the area for the new jobs, Ms Reynolds said the GCRE had "a huge programme to entice people into engineering"."They have been doing Stem (Science, Technology, Engineering, and Mathematics) sessions with Year Six pupils going out to all of the local schools, providing training and getting young people interested in the types of skills that will be needed for the future running of such a site."
Powys County Times
24-06-2025
- Business
- Powys County Times
Powys: Council told former Nant Helen plans behind schedule
A PROJECT to develop rail track testing facilities in south Powys is at least five years behind schedule – it has been revealed. At a meeting of Powys County Council's Governance and Audit committee on Friday, (June 20), councillors and lay members received a report outlining the risks to the council associated with transforming the former Nant Helen coal drift mine near Ystradygynlais into a Global Centre of Railway Excellence (GCRE). The development has a potential to create hundreds of jobs and could revitalise the economy bringing in an estimated £300 million into the area. The committee were told by director of economic development and growth Diane Reynolds that further planning applications from GCRE for the site were expected to be lodged with the council next year. Planning permission which agreed the principle of developing the site were agreed by both Powys and Neath Port Talbot council planning committee's back in 2021. Last year GCRE had an application to extend the timescale allowed to provide detailed plans for the facility, approved by planners. It was originally expected that the site would be operational by 2025. Ms Reynolds explained: 'These things change over time they are looking to put in a revised planning applications.' Future proposals would include restoring a footpath that goes around the edge which could form part of a cycle way. 'I think they are looking at improving access as well,' said Ms Reynolds. Committee vice-chairman and lay member John Brautigam said: 'There is a risk stated in the report that there is a skills deficit for the jobs that would be needed there. What is being done about that?' Ms Reynolds said: 'The GCRE have a huge programme to entice people into engineering. 'They have been doing STEM (Science, Technology, Engineering, and Mathematics) sessions with Year Six pupils going out to all of the local schools providing training and getting young people interested in the types of skills that will be needed for the future running of such a site. 'We don't expect the site to be up and running until 2030 so we're talking five years. 'They have also been working really hard with the Welsh and UK Government on any people that will be displaced as part of the steelworks ceasing. 'They have been re-training local people in the rail industry so they can take up positions in the future.' Mr Brautigam said: 'Thank you I'm glad to hear there is some activity in that direction anyway.' Committee chairwoman and lay member Lynne Hamilton believed that another report on the development should be brought to the committee in future so that the committee is assured that the council's risks are being 'managed appropriately,'
