Business
Welsh Government’s Financial Support Crucial for Rail Excellence Centre

Plans for the world’s first integrated train and rail infrastructure testing facility, the Global Centre of Rail Excellence (GCRE), face significant uncertainty without increased financial backing from the Welsh Government. The ambitious project, estimated to cost £400 million, aims to create over 1,100 permanent jobs in the economically challenged Dulais Valley, Wales.
Located on a 700-hectare site in Onllwyn, the GCRE is designed to include two electrified 7-kilometre testing tracks for rolling stock and infrastructure. These facilities are intended to operate continuously throughout the year. In addition to the testing tracks, the project plans to feature train storage and maintenance facilities, a control centre, a 100-bedroom hotel, and facilities for research and development.
The land for the project has already been secured from Celtic Energy and has received planning consent, making it shovel-ready pending financial closure. However, as of now, GCRE Ltd, which operates under the Welsh Government, requires approximately £330 million to proceed. The project has garnered interest from over 200 firms, including significant players such as Network Rail and Transport for Wales, as well as train manufacturers like Hitachi and Construcciones y Auxiliar de Ferrocarriles (CAF).
Despite initial funding of £50 million from Cardiff Bay and £20 million from the UK Government, GCRE has struggled to secure further investment. The initial fundraising efforts focused on equity investment but did not yield a successful deal. GCRE’s chief executive, Simon Jones, has indicated that while discussions with potential debt providers were promising, no agreements have materialized thus far.
In light of these challenges, GCRE is actively seeking other funding avenues, which may include a combination of debt and equity financing. However, there is growing recognition that additional financial commitments from the Welsh Government are essential. The government must weigh its budgetary constraints against the potential benefits of the GCRE, especially as it faces competing demands in health and education.
The project falls under the oversight of Ken Skates, the Cabinet Secretary for Transport, and its future may hinge on decisions made by the next Welsh Government following the upcoming Senedd election in spring 2024. There is potential for the UK Government to bolster financial support, which could enhance investor confidence and strengthen the overall business case for the GCRE.
Economic assessments by PwC project that over a decade, excluding future phases like the Sarn Helen Technology Park, the GCRE could generate a gross value added (GVA) impact of £300 million in the local area and approximately £1.2 billion over its lifetime. Furthermore, for every pound invested, the project is expected to yield a 15-fold economic return.
Despite the hurdles, Jones remains optimistic about the GCRE’s prospects. He emphasized the importance of attracting private investment to develop a facility that could serve as an economic catalyst for the region. He acknowledged the project’s complexities and the broader economic challenges in attracting investment to the South Wales Valleys.
“Our aim is to de-risk the GCRE project to a point where private investors are attracted to finance the bulk of construction,” Jones stated. He reiterated that the project could transform local economies by creating new jobs and fostering regional pride.
The urgency for projects like GCRE is amplified by the need for economic revitalization in areas impacted by industrial decline. The UK Climate Change Committee has underscored the necessity of generating alternative employment opportunities in these regions.
As discussions continue with potential investors, including renewable energy and data centre firms, there remains a possibility for the site to accommodate diverse investments. Should the rail project fail to secure funding, the entire site could be repurposed for alternative developments.
Despite the uncertainties, Jones maintains that the GCRE represents a vital opportunity for the future of the area. He is committed to collaborating with government and industry partners to navigate the challenges ahead and ultimately realize the vision for this groundbreaking facility.
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