Fears over 'transformational' rail testing plant

Martin Shipton

Concerns are mounting over whether an ambitious project aimed at making Wales a world-class centre for railway testing will raise enough private investment to be viable.

The Global Centre for Rail Excellence (GCRE) was established on the site of the former Nant Helen opencast mine at Onllwyn, straddling the local authority boundary between Neath Port Talbot and Powys. When completed, it will be the only facility of its kind in northern Europe.

The Welsh Government, which owns the site via an arm’s length company, has committed £50m to the project, while the UK Government has contributed £20m, with a further £7.4m being provided through Innovate UK for research and development.

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Test loops

Planned facilities include two electrified test loops, one a 7km high speed rolling stock track with a maximum speed of around 177km/h, potentially rising to 201km/h, and another, infrastructure test track.

Also included in the project is a dual-platform test environment, rolling stock storage and maintenance facilities, operations room, staff accommodation and connections to the main line between Cardiff and Swansea. State of the art visitor and conference facilities are also planned, plus a business park and a hotel.

Unfortunately, however, the centre has been unable to secure required private sector funding estimated at between £300m and £330m and sources are now seriously worried that the project will not be able to proceed..

In January 2025 GCRE chief executive Simon Jones told online news outlet Business Live there had been two main reasons why the project had failed to secure equity investment at the end of 2023. He said: “The first was uncertainty in the UK rail market, including a lack of pipeline visibility, changing political appetite for rail, and a consequent lack of committed revenue that could be guaranteed by the business. The second was wider economic factors, including above-trend inflation and interest rates.

“What was frustrating for the team was that short-term factors seemed to threaten the progress of such a vital piece of long-term infrastructure investment - a once-in-a-generation opportunity for Wales and the UK to become a genuine leader in European rail innovation.”

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Flexible

He added: “Because the formal procurement was unsuccessful, we were able to develop a more flexible approach to identifying and securing potential investors. This has allowed us to extend the search for investment partners. As a result, we are now in detailed dialogue with a new potential funder whose values closely align with ours. This could lead to a new approach to funding economic infrastructure, requiring changes to how the company is structured and owned in the long term.”

Six months later, there is no sign of a deal coming to fruition.

A source who has spoken to government officials who must remain anonymous said: “This has been spoken of as a transformational project - a term that rarely lives up to expectations. Instead there are very real fears that it won’t go ahead at all.

“It’s proving very difficult to attract the private investment that is absolutely crucial to its success. For a project of this kind to succeed, it needs to gain the confidence of investors who will be looking for a return on their outlay.

“That probably involves attracting angel investors and venture capitalists whose political position may not align with that of the governments. In a way, Wales needs the project to succeed in its own version of Dragon’s Den.

“It’s been four years since work began on the site and large sums of publicmoney have already been spent. It would be terrible if it came to nothing.

“There’s a list of projects in Wales that have initially seemed enticing but in the end have come to nothing, including three in Ebbw Vale: the Circuit of Wales, the TVR sports car factory and the Ciner glass factory, as well as the gigaplant at St Athan. Let’s hope GCRE doesn’t go the same way.”

Complex

A spokesperson for the Welsh Government said: “The Global Centre of Rail Excellence is a large and complex project which we plan to deliver in partnership with the private sector.

"From the outset, it has been the objective of the company and of the Welsh Government to secure the right partners to take the concept forward. This process is ongoing.”