A Safe Bet? Week In Week Out


A Safe Bet?

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This landscape should be alive

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with the sound of racing engines and roaring crowds.

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The promise was for thousands of jobs to be created

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with the Circuit of Wales.

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Promises don't pay mortgages or keep a roof over you.

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Without Circuit of Wales, it will be a case of,

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last person to leave, please shut the lights out.

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Welsh government has spent millions of our money on this.

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Tonight, questions are being asked about

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where some of that money was spent.

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I made some simple queries, and what I've discovered

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absolutely horrifies me.

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A former insider questions the promises that were made.

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I think people need to wake up and smell the coffee,

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because it took me four and a bit years to do so.

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Investment is still needed to get the circuit up and running.

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But with enquiries into the use of public money underway,

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we talk to the man behind the dream, and ask, can he deliver?

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People have invested lots of hope, faith, dreams and ambition,

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and so far they have come to nothing.

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They're praying for better times in Ebbw Vale.

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And for the Circuit of Wales.

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We want this for the community, and we are also saying to the people

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with the vision to do this, we are praying for you.

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We are supporting you. We are on your side in this.

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We are in the third generation of unemployment.

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Youngsters with no hope of a job, they don t see any hope.

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There is nothing else on the horizon.

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We have seen other factories come and go, shops close,

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they come for five minutes and disappear elsewhere.

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There is nothing else and that is why I am supporting it.

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There is no Plan B.

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This is their promised land.

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We were told that by now there would be

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a state of the art race circuit, with miles of tarmac, concrete,

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and thousands of bringing the circuit to life.

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Instead...well.

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Welsh Government has put ?9 million of our money on this scheme so far,

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in the belief that if they did, then private investors

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would buy in, too.

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But will the public be left picking up the bill

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if this turns out to be nothing more than an expensive dream?

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Michael Carrick is the man behind the dream.

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We first started investigating his promises two years ago.

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Can you look me in the eye right now and say,

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yes, you are definitely going to deliver?

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We have to deliver, we absolutely have to deliver.

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If we fail to do that, it is an absolute disaster.

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And failure wasn't an option according to his team,

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driving the public relations message to schools at the time.

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No longer will you have to leave Blaenau Gwent

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to find a job and an opportunity, they will exist on your doorstep.

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They said this would be the jewel in the crown.

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The circuit was going to host the world famous Moto GP.

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We are starting to build it this year that s how close it is.

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By September next year, we could have our first races

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taking place up the road from here.

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Well, he got that wrong.

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Two years on, this is where that race is still being held.

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The fans who are camped here should be going through the turn styles

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in Ebbw Vale to see the world famous Moto GP event.

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Instead, they are here at this campsite at Silverstone,

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the home of British motor racing, for yet another year.

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There's no shortage of enthusiasm here for the Circuit of Wales.

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We were expecting to be there two year plan to build then this

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We were expecting to be there two year plan to build then this

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year to be there very gutting for ourselves.

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Of course, it would get the support.

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Wales is a beautiful country.

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Let's have it, let's do it, come on.

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The Circuit of Wales is paying millions of pounds a year

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to Spanish company Dorna to host Moto GP in the UK.

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They are also having to pay Silverstone to run it

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because the Circuit of Wales is still on the drawing board.

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But why is it taking so long to start building?

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The answer is money.

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The estimated costs have now risen from ?350 million to ?425 million.

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But two years ago Mr Carrick said he had investors lined up.

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Though he wouldn t say who they were.

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How much is promised to you from independent investors?

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More than we need.

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More than you need?

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We need ?200 million from our investors.

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We have agreements, and they are taking their agreements

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through their processes.

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But to date, that money still hasn t appeared.

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So two years on, what does Michael Carrick have to say

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about the promises he made?

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In March of 2014, you said you had investors

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In March of 2014, you said you had investors

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and money lined up.

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Where did it go?

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Well, it s got to come when you have got a project to be invested in

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and at that time, we didn't envisage having a public inquiry

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or two and half years of engagement.

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Investors would have to know there had there to be a public

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inquiry, they know how these things work.

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This was a deregistration process of common land and with uncertainty

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you have to actually change your position and we changed it.

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"We changed our position."

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What does "change your position" mean?

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It means we chose we wanted to deliver the project

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in a different way and reason we chose it to do it in a different

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way was to attract a different type of investor that was longer term

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and better for our project.

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David Bates worked with Michael Carrick from 2012 to find

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investors for a number of developments

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including the circuit.

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Did he know where the ?200 million was coming from?

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We didn't have private capital to best of my knowledge in 2014.

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It would have been unlikely we had private capital it in March 2014.

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It was about May-June 2014 that we agreed

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a document called the PPM.

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For people who want to invest, this is document you need

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to read because it tells you what you are investing in.

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You feel you were in a position to know whether there was private

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investment for this scheme.

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Absolutely.

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It would have been a quantum step forward

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and no-one was going to keep that secret.

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We understand there was a PPM document, the private placement

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memorandum document, to give prospective investors wasn't

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issued until a few months after we spoke.

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Well, it is entirely different, Tim.

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A PPM document is a final legal contractual document that

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investors subscribe.

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It doesn't mean you have conversations before

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for years before...

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Conversations are one thing actually having the money

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is something, isn't it?

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Well, actually having the planning is something else, isn't it.

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Until you have the planning, the deregistration, the detailed

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construction documentation, you can't go forward.

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The company has continued to rally support.

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At this summer's eisteddfod their message was that the circuit

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is still very much on track.

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And in September, it was the same in Ebbw Vale.

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I think it would be fantastic idea and it should the jobs.

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There's a college down the road, there's got to be other technology

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This is going to be a typical ghost town without Circuit of Wales,

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it will be a case of last person to leave, please

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shut the lights out.

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We need jobs and in this area and if this brings jobs, brilliant!

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But so far they haven't ? and that's the problem.

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Two years ago we filmed plumbing student John Daniels

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at the local college.

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He asked the company's recruiter for a job.

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I know it sounds like begging but I am that desperate

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to get the opportunity.

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There's nothing wrong in wanting a job - never apologise

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for being keen to work.

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Thank you, I look forward to seeing you on the track maybe.

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John is still waiting for that call.

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You can't live on hope.

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You can't wake up every day thinking that phone's going to ring

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because they told you it was going to

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ring cos it don't.

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All John's had are temporary jobs.

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He's one of thousands who hoped to be working on the circuit by now.

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I'm going over the job centre.

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I'm phoning the agency.

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Happening?

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Oh, we haven't heard nothing yet.

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But it is definitely happening at the end of the month now.

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Promises don't pay mortgages or keep a roof over you.

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A public inquiry held up progress for a year.

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But there has been nearly a year of further delays

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because the company can't find enough private investment.

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Don't say nothing till you are sure it's going ahead,

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don't fill everyone with hope.

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To help bring in big money and create confidence among

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among the private sector, Michael Carrick convinced Welsh

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government to award his company a ?2 million development

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grant and to underwrite a ?7.35 million bank loan.

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Welsh government has told us it agreed to give the money knowing

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that the company did not have confirmed investors on board.

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So why did it decide to take the risk?

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Prof Gerald Holtham is an economist who has had a career in the city

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and worked as an advisor to Welsh government.

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In order to commit that money when you haven't got any other

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investors, you have to believe it has got a good chance of flying

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of working, being viable, and to form that view

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you have to do what's known in the trade as due diligence,

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you have to do your market research

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to satisfy yourself, that yes, this could work.

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Because they had no other investors to rely on they had to go out

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and do it themselves.

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So this opens up the role of Welsh Government in this whole

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process to closer scrutiny, does it?

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It's always a good question - what procedures do you follow

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in that sort of situation?

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And they ought to be able to answer that question.

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Does ?9.3 million seem like a lot of money?

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Yes, for a pre-investment, it seems like a lot of money.

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Welsh government says the public money it's given is in line

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with its processes and procedures.

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And it's due diligence reports - prepared by external advisors

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are due to be released.

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But are being reviewed to check if any parts remain

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commercially confidential.

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Michael Carrick and his company have always been confident

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the development will go ahead and earlier this year, a potential

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investor in the form of insurance giant AVIVA was revealed.

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Which was said to be prepared to back the scheme on the condition

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that Welsh government was prepared to underwrite the whole deal.

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But the economy minister at the time came back with a very clear no.

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You've got to look at the risk we are now being asked to undertake.

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When we started to talk about this project we knew there'd been private

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sector investment, it went from talking

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about ?35m weeks ago to over ?350m as a guarantee,

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it's a 100% guarantee.

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We wanted to support this project, we thought it would have been good

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but I'm not entitled to take the risk with that type of money

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and I don't think the public would expect me to take that risk.

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At the time, David Bates was at Michael Carrick's company

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Aventa Capital Partners which looks for investors.

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He says the news came as a shock because Michael Carrick had

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told him it was a done deal.

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So Michael Carrick told you?

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Yes, Welsh government had agreed a 100% guarantee.

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So he was convincing in that, and sure about that?

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Yeah.

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As far as you were concerned?

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Absolutely.

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At that point, when she said what she said, that was a light bulb

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moment when you suddenly realise the emperor doesn't have any

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clothes, that it's not what you always thought

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it was going to be.

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That was mentally the end of me and Aventa because I felt I'd been

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led up garden path to be honest.

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Did the Welsh Government ever tell you they were willing

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to underwrite the deal by 100%?

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Because we understood you told people, including colleagues,

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that that deal was done.

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Why say that?

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Well, I think we were all moving towards a deal

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we felt was deliverable.

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All the delivery partners including our financing partners,

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investors, our contractors, felt we had a solution and even

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the government thought we had a solution that was deliverable.

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The Welsh Government told us it has never offered the company a 100%

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guarantee and that the previous Minister made that clear.

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The future of this whole development and the community below was suddenly

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thrown into jeopardy.

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Unless Michael Carrick could find enough new private investors,

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the Circuit would remain just a field of dreams.

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The company had already spent the ?9 million of grant and loan it

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had from the public purse.

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So questions began emerging about what we had to show for it.

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Hello, can I speak to David Davies, please?

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The MP who's Chair of the Welsh Affairs Select committee

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had been asked by Michael Carrick to promote the Circuit.

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What he has been doing all along is go around prominent people

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in Wales, politicians, and get them all to say this

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is a fantastic project, Welsh Government go ahead and sort

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this out and make project happen.

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David Davies began asking questions about how public money

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was being spent and the relationship between Mr Carrick's private company

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Aventa - and the firm behind the Circuit, the Heads

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of the Valleys Development Company, which was being propped

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up by public money.

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I made some simple queries into this which is the right thing to do

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before giving support for something and what I have discovered

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absolutely horrifies me.

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It emerged that Aventa has been paid nearly ?1 million to find investors

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for the Circuit.

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We asked David Bates if that was something

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he was aware of?

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Yes, Aventa charged fees to the Heads of Valleys for work it

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did for Heads of the Valleys.

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It had a commercial agreement to do so.

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The largest shareholder in Heads of the Valleys Development Company

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and he owns Aventa so he was charging himself.

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In

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Yes, it came from one company controlled by Michael to another

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company controlled by Michael.

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But not everyone who's worked on the scheme has been paid.

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There's been such excitement and belief in the Circuit of Wales,

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that a number of companies have been prepared to work on the project

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without being paid so far.

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Some are doing it "at risk" - in other words, if the project

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doesn't work they won't get paid.

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And we have discovered that the value of that work so far

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is around ?23 million.

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David Bates is one of those and he left the project

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in the summer.

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Everyone who's been involved in this project has got lot riding on this.

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There's lots of personal financial pain if this project

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doesn't go ahead, yes.

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We understand it is around ?23 million worth of support

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which is being done by companies at risk -

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what happens to their money if this is not built?

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Well, we are hoping it will get built, we are hoping

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the structure goes forward.

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I think we are all confident it will get built but it is

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a risk of projects that sometimes they don't work.

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So what about Michael Carrick's company Aventa?

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Aventa were not doing it on an at risk basis.

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They were paid ?967,000 and yet they were the company responsible

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for raising the finance so if there was any company that

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should have been willing to say this project is fine, this

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is going to go ahead, we are quite relaxed about it,

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we are prepared to wait till it does and we get paid, is Aventa.

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Why did you transfer nearly ?1 million from Heads

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of the Valleys Development Company to Aventa, and what was that

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money used for?

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Well, we haven't transferred it, it's been paid for services,

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as have been a number of services to the Heads of the Valleys

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Development Company.

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So Heads of the Valleys has 30-odd relationships with different private

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companies and they get paid for services.

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Aventa is one of those companies.

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What did you use the money for?

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In Aventa, or Heads of the Valleys?

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In Aventa.

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Aventa's a private company.

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You're the major shareholder of both.

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Well, I'm the only shareholder of Aventa.

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You are, so what did you use the ?1 million for in Aventa?

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How did that benefit the public of Wales?

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Tim, Aventa is a private company.

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It's been paid for services.

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Mr Carrick says Aventa received its income from a variety

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of sources but it has liabilities.

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There's a number of staff haven't been paid, including myself,

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including operation team, they're prepared to continue...

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And this is a successful company Well, no, cos actually we expected

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to close the project at the beginning this year.

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When the project is closed, a number of payments at risk,

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that are released and if we don't close it they won't get paid.

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The Welsh Government had planted seed investment to the scheme

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in the hope it would grow jobs.

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Earlier this year, it emerged Michael Carrick had ?35,000 worth

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of work carried out on the garden of his mansion in Cambridgshire.

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And the company which was partly funded by the public -

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was asked to pay for it.

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Invoices were sent to David Davies by a whistle-blower.

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They were for hundreds of hours of work over a two-year period.

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The landscape gardeners who are based in Cambridgeshire

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invoiced Heads of the Valleys Development Company

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which is a publicly funded company and I asked Michael why?

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He told me the invoices were not paid by Heads of the Valleys,

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they were paid by Aventa which was his company and he can

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do what he wants with.

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I said, well why did this go on over a period of two years

0:20:240:20:27

and he said it was a mistake.

0:20:270:20:29

Well, it's a funny mistake to happen.

0:20:290:20:31

Why was the Heads of the Valleys Development Company

0:20:310:20:33

asked to pay for ?35,000 worth of work on your garden?

0:20:330:20:35

Well, actually it's an administrative oversight.

0:20:350:20:37

It wasn't asked to pay for that and we've corrected that.

0:20:370:20:40

So that's unfortunate, we've given assurances

0:20:400:20:42

to Welsh Government and others that it hasn't

0:20:420:20:44

been used in that way.

0:20:440:20:46

That was a mistake that went on for two years Well,

0:20:460:20:50

it's an administrative oversight and we've apologised for it.

0:20:500:20:52

It doesn't look good, though, does it?

0:20:520:21:02

Well, in the context of ?20 million -odd that's been spent I don't think

0:21:050:21:08

?34,000 is that relevant.

0:21:080:21:09

To be honest.

0:21:090:21:15

No, it didn't.

0:21:150:21:16

It looks like that's what it is but I've just told you,

0:21:160:21:19

the invoice was misaddressed, Aventa spent that money

0:21:190:21:21

and it was spent on what at the time was our office.

0:21:210:21:23

According to Companies House documents, Mr Carrick's

0:21:230:21:25

office moved from his home to Finsbury Circus

0:21:250:21:27

in London in 2013.

0:21:270:21:28

The gardening invoices - which included amongst other things,

0:21:280:21:30

the cost of compost, seeds, and a timber path,

0:21:300:21:32

were for work done almost a year later and up until March this year.

0:21:320:21:36

In September, the Circuit of Wales team were back

0:21:360:21:38

on the streets in Ebbw Vale, telling locals they do

0:21:380:21:40

have the investors they need, and what they want from the Welsh

0:21:400:21:43

Government.

0:21:430:21:45

All they are asking for from the government is for them

0:21:450:21:47

to underwrite the 50% if at any point it goes tits up

0:21:470:21:50

in the next 30 years.

0:21:500:21:51

So the Welsh Government could earn ?4 million a year in interest

0:21:570:21:59

if the Circuit succeeds.

0:21:590:22:02

But if it failed after being built, we might have to repay up

0:22:020:22:05

to ?7 million a year for 35 years.

0:22:050:22:09

I am satisfied in talking to the senior guys in this

0:22:090:22:14

that the finances they are in place.

0:22:140:22:18

That is what you have been told.

0:22:180:22:20

Yes, that's what I have been told.

0:22:200:22:24

Michael Carrick says he's put ?2.5 million of his own money

0:22:240:22:27

into the development.

0:22:270:22:30

Though he hasn't said publicly where the current

0:22:300:22:32

investment is coming from, he has dropped hints about who else

0:22:320:22:35

is eyeing up a place on this site.

0:22:350:22:38

Build it and they will come - that's been the company's promise

0:22:380:22:41

about attracting big businesses and jobs to this site.

0:22:410:22:46

We've discovered they are suggesting that car giant BMW has

0:22:460:22:49

its sights on Ebbw Vale.

0:22:490:22:59

David Davies says he was told in a meeting.

0:22:590:23:02

One company that he named as being very interested in getting

0:23:020:23:04

involved and he suggested that BMW were hoping to open up a sort of BMW

0:23:040:23:08

World - a bit like Disneyworld, presumably, but lots of BMWs.

0:23:080:23:14

I don't know how it would work but these are big companies that

0:23:140:23:17

were being named in the time in the presentation.

0:23:170:23:22

Michael Carrick has also suggested that BT wants to invest here,

0:23:220:23:25

that there's talk of the company becoming involved with

0:23:250:23:28

a multi-million pound innovation centre which is planned

0:23:280:23:31

for the site.

0:23:310:23:33

Well, we checked with BT.

0:23:330:23:36

They told us they are not.

0:23:360:23:43

Tell me about BMW's plans for Ebbw Vale.

0:23:430:23:46

Well, I have no detail on BMW's plans for Ebbw Vale.

0:23:460:23:53

The BMW World project?

0:23:530:23:58

The BMW World project.

0:23:580:24:00

We have a number of discussions that are going on with industrial

0:24:000:24:03

partners, that may lead to potential occupation.

0:24:030:24:07

I think BMW is one of the conversations

0:24:070:24:09

we've had in the past.

0:24:090:24:11

And BT?

0:24:110:24:13

BT have a number of relationships with us.

0:24:130:24:16

What have they got planned?

0:24:160:24:19

Well, there's a BT academy with Dorna for new academy riders,

0:24:190:24:23

we're hoping it will be based on the site at Ebbw Vale.

0:24:230:24:29

We've discussed it with BMW and BT and BT are emphatic that they don't

0:24:290:24:33

have any plans to have anything to do with

0:24:330:24:36

the Circuit of Wales.

0:24:360:24:39

Well, we'll see.

0:24:390:24:45

Somebody in the Welsh Assembly needs to be asking very, very,

0:24:450:24:48

hard questions of Michael Carrick and trying to marry up

0:24:480:24:51

the information he's giving which is inconsistent with facts

0:24:510:24:54

as we can find them.

0:24:540:24:57

Are you raising objections for political gain because you're

0:24:570:24:59

trying to make political capital out of it?

0:24:590:25:03

Not at all, there's no political gain in it for me.

0:25:030:25:06

I am raising these objections because I've been approached

0:25:060:25:08

by Michael Carrick and asked to give my support as an MP

0:25:080:25:12

and chair of the Welsh Affairs Select committee.

0:25:120:25:22

There's 3,279 signatures on this cos we really believe

0:25:240:25:26

Blaenau Gwent needs this circuit.

0:25:260:25:29

Keen to show support with a petition to the government,

0:25:290:25:31

local people have been told private investors are ready to go

0:25:310:25:34

ahead, so they want Welsh Government to underwrite it.

0:25:340:25:40

We are trying to pep up the Welsh Government to do it

0:25:400:25:43

as quickly as possible.

0:25:430:25:47

Local business leader Phil Edwards says the message

0:25:470:25:49

couldn't be clearer.

0:25:490:25:50

It's got to be this cos there's nothing else,

0:25:500:25:52

unless the Welsh Government are going to turn round and say

0:25:520:26:00

there's a plan B, there's 6,000 jobs that will be there tomorrow.

0:26:000:26:03

Thanks a lot, Don.

0:26:030:26:04

I will be weighed down with these.

0:26:040:26:06

Thank you for coming.

0:26:060:26:08

But six weeks later, the company turned up at the Senedd -

0:26:080:26:11

not with the money - but with merchant bank

0:26:110:26:13

Kleinwort Benson - its role to find ?100m of investment

0:26:130:26:15

the company still needs.

0:26:150:26:17

Money it says it's confident it will find.

0:26:170:26:21

That's the service that you're supposed to be providing to Heads

0:26:210:26:23

of the Valleys Development Company.

0:26:230:26:26

So why do you now need to go to Kleinwort Benson?

0:26:260:26:28

No, the structure has changed.

0:26:280:26:30

We brought Kleinwort Benson in as corporate advisors

0:26:300:26:32

to the Circuit of Wales.

0:26:320:26:34

Your company has been telling people in Blaenau Gwent that

0:26:340:26:37

you have the investment you need, it's now up to the Welsh Government

0:26:370:26:41

to underwrite the deal so that the Circuit can go ahead.

0:26:410:26:47

Why have you been telling people that?

0:26:470:26:50

What we've been saying to them is that it's a complex project,

0:26:500:26:53

we've spent many, many, years advancing it,

0:26:530:26:56

and we've got a structure that we believe is supportable.

0:26:560:27:00

And what about public money you have received -

0:27:000:27:02

are we ever going to see that back?

0:27:020:27:04

Well, if we close the project, it gets paid back with interest.

0:27:040:27:08

The Infrastructure and Economy Minister Ken Skates says the people

0:27:080:27:11

of Blaenau Gwent deserve an answer very soon on whether this vision

0:27:110:27:15

will be realised.

0:27:150:27:18

Ken Skates had agreed to give us an interview to discuss the some

0:27:180:27:21

of the issues we have raised about the Circuit of Wales

0:27:210:27:23

but yesterday he changed his mind.

0:27:230:27:27

A press officer told us that the development

0:27:270:27:29

is at a sensitive stage and talks with the company about a refreshed

0:27:290:27:33

bid are commercial, in confidence and progessing.

0:27:330:27:40

The company's bank called in the ?7.35m loan so the Welsh

0:27:400:27:44

government could seek to recover that money but at present it's not.

0:27:440:27:49

David Davies has given a dossier of information

0:27:490:27:51

from the whistle-blower to the Auditor General for Wales

0:27:510:27:54

who has confirmed he is examining the use of public money and aspects

0:27:540:27:57

of how it was awarded.

0:27:570:28:01

They should say to Michael Carrick, it's down to you -

0:28:010:28:03

if you have private investors out there willing to back the scheme,

0:28:030:28:06

bring them forward, let us know who they are.

0:28:060:28:08

At least ?9 million has gone into this scheme of public money

0:28:080:28:11

and I think it's time they started to find

0:28:110:28:13

out what's happened to that

0:28:130:28:15

money and not put any more into it.

0:28:150:28:25

In Ebbw Vale there were prayers again today for Michael

0:28:270:28:29

Carrick and his dream.

0:28:290:28:32

Someone once said to me you spell faith R-I-S-K.

0:28:320:28:35

I worry about it.

0:28:350:28:37

I pray about it and I believe prayer works and I firmly believe

0:28:370:28:40

that this is going to happen.

0:28:400:28:47

For John Daniels, who is out of work again, it's hard to keep faith.

0:28:470:28:53

I'd have been honoured to work there.

0:28:530:28:56

It would have taught me a lot of things and given me a lot

0:28:560:28:59

of confidence and look forward to but unless I am up

0:28:590:29:02

there and see the diggers up there digging I won't believe it.

0:29:020:29:12

People have invested lots of faith, hope, and a lot of dreams in this

0:29:120:29:16

Circuit and so far they have come to nothing.

0:29:160:29:21

We appreciate that it has been challenging.

0:29:210:29:24

We're committed to delivering it to the degree we can.

0:29:240:29:28

At what point do you draw a line under this and say, enough.

0:29:280:29:32

I think you do at some point have to draw a line.

0:29:320:29:35

If we're not going to be delivering what we say we're

0:29:350:29:37

going to be delivering, we'll stop it.

0:29:370:29:43

The promise of changing this landscape and of the fortunes

0:29:450:29:49

and the lives of the people in that valley below has been

0:29:490:29:52

a huge undertaking.

0:29:520:29:55

This community has lost so many jobs over the years, this scheme

0:29:550:29:59

seemed to offer real hope.

0:29:590:30:02

But if that hope is lost, there won't just be anger

0:30:020:30:05

and disappointment,there'll be serious questions,

0:30:050:30:07

too, about who is to blame.

0:30:070:30:13

tomorrow

0:30:300:30:30

tomorrow night

0:30:300:30:30

tomorrow night at

0:30:300:30:33

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