Aventa plans to build £325m race circuit in Wales

Standing on windswept moorland in the Brecon Beacons, Michael Carrick is trying to explain why his company wants to build an international motor racing circuit in one of the poorest parts of the UK.

Where sheep quietly crop the grassland today, Mr Carrick's plan envisages a 5.1km circuit where, for 16 weekends a year, some of the world's fastest cars and motorcycles will provide a spectacle for thousands of petrol-head race fans.

The Australian director of Aventa Capital Partners, an investment company in London, is the main architect of a £325m greenfield scheme to build a track, automotive technology park and retail and property developments near Ebbw Vale, 50 miles north of Cardiff in the Welsh valleys.

Aventa claims the project will transform the economy of Blaenau Gwent borough, creating 6,000 jobs in an area blighted by unemployment since coal mines closed in the 1980s.

The plan has been unanimously approved by the local council, but the promoters have yet to finalise a £30m grant they are seeking from the Welsh government. The project has also been held up after environmentalists secured a full public inquiry, the findings of which are expected to be given to Welsh ministers by the end of May.

But if no further obstacles are raised and the Welsh government gives its backing Aventa is confident of securing the £200m in equity finance it requires, with bank debt providing the balance.

Aventa invests in regeneration projects around the UK, and financing a race circuit far from any big city with little existing infrastructure is not its normal sort of venture.

"With a programme like this it never hits everybody's core investment strategy. Investors are all very familiar with toll roads and airports. This is different. But to reassure them I tend to joke that they're really being asked to fund a 5km roundabout," says Mr Carrick, formerly head of global infrastructure at Merrill Lynch, a US bank.

Surveying the vast, featureless landscape, Mr Carrick, 45, has no problem envisaging what the track will look like. "We've marked it out. We take investors round. It follows the natural ridgeway and contours," he says.

Wales has a developed automotive supply chain and its universities boast some of the best researchers in the field. Moreover the country was one of the few areas in the UK where Aventa could purchase a plot large enough.

The site was bought from the Duke of Beaufort estate. As part of the sale, Aventa had to win over 30 farmers who had grazing rights, as this is common land. With the help of the council, the company then had to find almost 300 hectares of suitable replacement acreage - the focus of the public inquiry.

"If I was going to do it again I wouldn't start here. I'd start with something else, but this was the region and the sector we felt that investors were going towards, with the focus on regeneration and socially responsible investments," says Mr Carrick.

The plans also attracted the attentions of rival racetracks worried it could hurt their businesses. Silverstone, the UK's premier motor racing facility and home to the British Formula One grand prix, was concerned enough to write to David Cameron, the prime minister, to complain about the "unfair " state aid that the project was seeking.

Mr Carrick says: "We've heard the criticism from Silverstone. They actually made a state aid application, they didn't get it because of where they are in the country. We hope in 10 years' time this region won't be a tier one area [making it eligible for special EU funding] but at the moment it's one of the most deprived parts of the UK."

Aventa has already secured the rights to stage the MotoGP motorcycle competition at Silverstone this year and indeed had anticipated it would have been ready to host the event at the Welsh circuit this year if permissions had been secured earlier. The company is aiming for construction to be complete by August 2017, assuming it secures the necessary permits. When the track is closer to completion, Aventa aims to attract a range of other motor races.

Mr Carrick says the track will generate yearly "the equivalent of three Ryder Cups" referring to the biennial European-US golf extravaganza. The circuit and the ancillary activities would be worth £50m a year to the Welsh economy, he claims.

"You've got to sweat it. It's like an airport. With the right type of events you can charge the right commercial fees. If you run it like a church for Easter it will not make money at all."

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