Welsh Government under pressure over multi-million pound rail centre

Emily Price 

The Welsh Government is facing calls to explain mounting delays and rising costs at an international rail testing centre, amid revelations that the project still lacks the private investment needed to go ahead.

Welsh Conservative leader Darren Millar questioned what taxpayers have received in return for the £70 million of public money invested in the Global Centre of Rail Excellence (GCRE).

£50 million of the funding came from the former Labour Welsh Government and £20 million was invested by the former Conservative UK Government.

The facility covers an area roughly the size of Gibraltar across the former Nant Helen opencast mine and Onllwyn coal washery sites on the Neath Port Talbot-Powys border.

Launched five years ago by Welsh Labour, the site was originally expected to be fully operational by summer 2025, with the public investment intended to attract hundreds of millions of pounds in private funding.

However, it emerged last month that no private investment had yet been secured and that completion of the rail facility had been pushed back to 2030.

The project’s chief executive, Simon Jones, said potential investors considered the risks “too great” to commit private funding.

In the Senedd on Tuesday (November 4), Mr Millar raised concerns about how despite the delays, the remuneration package of the chief executive has increased by 11% over two years to more than £267,000, including almost £39,000 in employer pension contributions.

The Tory leader called for a statement from Trefnydd Heledd Fychan explaining who had authorised the pay increases.

Ms Fychan said she would make the Minister responsible for the project aware of the concerns the Conservatives had raised.

Speaking after the exchange, Mr Millar said: “Five years ago, the Welsh Government committed tens of millions of pounds of taxpayers’ money to the Global Centre of RailExcellence, promising a world-class facility that would attract hundreds of millions in private investment and create skilled jobs.

“It appears that they were sold a pup.

“The facility was supposed to be fully operational by summer 2025, yet even now not a penny of private investment has been secured.

“Taxpayers were promised a world-class rail facility, but all they appear to have to show for a £70 million commitment is a massive hole in the ground, and a growing hole in their pockets.

“It’s extraordinary that the chief executive’s remuneration package has risen by 11% in just two years to more than £267,000, when the project appears to have hit the buffers.

“Taxpayers deserve answers as to who is authorising these pay increases, what they have to show for the colossal sums invested so far, and when the promised jobs and investment will materialise.”

The chief executive of GCRE told BBC Politics Wales in September that there was demand in the rail industry for the services the centre would provide but warned “we can’t carry on using public money on this forever so a decision needs to be made.”

He later alluded to “detailed conversations” with an energy and data centre company, but did not name it due to commercial confidentiality rules, adding that GCRE wanted to complete talks this year with the hopes of contract being signed.

“We need to be in a position where we know whether the railway is going ahead or not at the moment we sign that contract,” Jones added.

In September, First Minister Rhun ap Iorwerth said a review has been commissioned looking at how to deliver the “best outcome”at the Nant Helen site.

“We are keen now to develop a clear direction of travel with GCRE Ltd,” he said.

The First Minister added: “Significant amounts of public funding have gone into the site already.

“I’m not going to criticise the concept that came from the current leader of the Labour Party, but we have to understand what has happened as those tens of millions of pounds have been spent on the site, and what maybe hasn’t happened to enable us to be at a place where there is private funding willing and able and keen to come in.

“As I say, my Minister has commissioned that work now because I agree that we need to come to a decision soon in order to make the most of the opportunities for what is still a very important site.”