Decision looms over rail testing centre as £330m investment remains unsecured

Mark Mansfield

The Welsh Government is weighing the future of a proposed rail testing centre that has yet to secure the private investment needed to proceed.

The Global Centre of Rail Excellence (GCRE), planned for a former coalfield site at Nant Helen and Onllwyn on the Neath Port Talbot–Powys border, has been awarded £70m in Welsh and UK government funding.

But around £330m in private investment is still required, while the target for the centre to become fully operational has slipped from summer 2025 to 2030.

First Minister Rhun ap Iorwerth told the Senedd last month that ministers “need to come to a decision soon”. No firm deadline has been announced.

Options considered for the site range from ending the project altogether to fully funding the railway from the public purse. Other possibilities include proceeding with an energy and data centre development alone, or using it to help finance a reduced rail project.

Enterprise, Connectivity and Energy Minister Adam Price said in September that specialist advice had been received and discussions with potential investors were continuing.

“There is an incredibly important employment site here, and we’re looking both at the Global Centre of Rail Excellence option, but looking at it in the round as well,” he said.

An analysis by Gareth Thomas, published by Senedd Research, sets out the challenges facing the development as the Senedd’s Economy, Energy and Connectivity Committee examines the project.

First announced in 2018, the centre would provide a dedicated location for testing trains, railway infrastructure and new technology. Wider plans include renewable energy generation, a data centre, a hotel and a technology park.

GCRE Ltd, which is wholly owned by the Welsh Government, says the development could create nearly 1,400 jobs during its first decade of operation.

However, efforts to attract a private investor to take a majority stake in the business have not secured funding.

In evidence submitted to the committee in September, the company identified uncertainty in the UK rail market and wider economic conditions as the main reasons potential investors had been unable to commit.

It also described a funding dilemma: customers will not sign contracts without confidence about when the centre will open, while the absence of guaranteed income makes attracting investors harder.

GCRE has now shifted its approach, exploring whether the proposed energy and data centre developments could help pay for the railway.

The company says those elements would not require public funding and could generate a substantial one-off payment to reduce the amount needed to construct the rail project.

It hopes to agree a contract with an energy and data centre partner by the end of 2026, subject to ministerial consent and continuing commercial discussions.

Business rates revenue

GCRE has also suggested that future business rates revenue from a data centre could help fund the railway. The potential income is not yet known, and such an arrangement would require agreement from the Welsh Government and local government.

In its September update, the company acknowledged that seeking significant public investment at a time of “stretched resource across Wales is a huge challenge”.

However, it argued that the data centre proposal could offer an opportunity to “construct something more creative” and reduce the financial risk to government.

The previous Welsh Government explored whether additional public funding or a government guarantee could help secure private investment. An updated business case was submitted to the new administration in June, with a further update expected this autumn.

Transport campaigner Dr John McTighe called for an Audit Wales investigation in September, questioning spending on the project and demand for the proposed centre. Former transport minister Ken Skates rejected his criticisms.

Endorsed

GCRE and industry supporters maintain that there is a need for the development. The company says more than 200 businesses have endorsed the project, while Network Rail, Transport for Wales and Hitachi have signed agreements or memoranda of understanding.

The Rail Forum, which represents almost 400 organisations, including GCRE, says its members currently rely on inefficient and time-consuming alternatives to test products and systems.

It argues that the investment required is too large for an individual rail company and that an independently operated centre would allow access across the industry.

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