New Year Update
By Simon Jones
Chief Executive of GCRE
As I write this update on a frost-capped January day on top of the Global Centre of Rail Excellence site, I’m reminded again just what a beautiful time of year it is in this part of Wales.
High on the hill – where the Swansea, Dulais and Neath valleys converge – January always contrives to bring something magical out of the landscape. The bracing wind, the blanket-white ground, the cloudless, crystalline sky – it’s a place that never fails to revive the spirits. A good spot from which to look ahead as the new year breaks out from the old.
From its very beginnings I’ve always seen GCRE as a breakout project.
A way to tangibly demonstrate that a new and bolder path to economic growth is possible in this part of South West and Mid Wales. By regenerating the former Nant Helen open cast mine and developing it as a new cluster for rail testing and innovation, I’ve always felt GCRE has the potential to catalyse new green jobs and help attract investment into the valleys and communities around it.
By building infrastructure not found in any other part of Europe, GCRE has the potential to encourage companies from across the world to set up permanent bases and invest here and at the same time, around the innovation that happens at GCRE, encourage the establishment of a cluster of new, innovation-led businesses and grow an active local supply chain. All the while, employing, involving and creating new opportunities for local people and businesses. Perhaps most importantly of all – helping to rebuild local prosperity and a sense of agency and pride again in the regional economy.
The need for new economic growth in this region is clear. More than 2,000 jobs have been lost over the last couple of years at the Tata Steelworks, just fifteen miles from the GCRE site, with many more going in the supply chain. Since 2020, the country in the UK with the largest percentage decrease in private sector businesses was Wales, where numbers of businesses have decreased by 15,000. Recent analysis has shown that while private sector employment has grown in pockets of the South East and North East of Wales over the last decade, its places like Mid and South West Wales that have seen quite significant falls.
Quite simply, over the next few years we need to be using every lever at our disposal to encourage sustainable new economic growth where its needed in Wales. In particular, taking actions that can stimulate the growth of new private sector jobs and which can develop the foundational economic infrastructure needed to make those jobs and that wider prosperity possible.
That’s why, at the heart of GCRE’s development, from the beginning, has been the commitment to ‘place’. GCRE was always intended to stimulate the economy of the northern coalfield valleys of South West Wales and the southern end of Powys to give it a more vibrant, unique and diverse economic future.
An independent economic appraisal undertaken by PWC has highlighted that GCRE has the potential to create more than 1,100 jobs in its first decade, with the potential to contribute a £300m GVA uplift to the local and regional economy and £1.2bn over its lifetime. It reported that for every £1 spent developing the GCRE project, £15 is returned in wider community, economic and rail industry benefit.
But by now we’d hoped to have been further along the path and made greater progress in constructing the GCRE facility itself. The vision hasn’t changed; our optimism hasn’t waned, but it has been much harder to secure the private investment we’ve needed to move the project from page to reality.
In that we aren’t alone. One of the structural challenges holding back the economy of the UK right now is a lack of capital investment outside of London and the Southeast of England. GCRE is one a number of good projects that have the potential to play a vital role in fostering place-based renewal in de-industrialised areas of the UK, but are unable to lever in the private funding they need to move forward.
But what makes me optimistic about the years ahead is that I still believe there is a way to bring the GCRE vision to life. Crucially, the Welsh Government still believes that too. They still want the project to work and have recently indicated that they are committed to working with us to addressing the barriers identified by private investors to date which have prevented us from moving to a final funding commitment and onto construction.
The Welsh Government has confirmed that it is prepared to explore how the GCRE project can be further de-risked by virtue of additional public funding or the provision of a revenue funding guarantee in order to secure the private capital funding necessary to take the project forward. That’s a positive step.
The next stage of that work will be for us to undertake additional development work on the project that can be completed over the next few months. That work will allow a completed detailed design to be finished, an Early Contractor (ECI) to be embedded and a fixed price for the GCRE construction to be developed.
What has given Welsh Government confidence to continue to back GCRE has been the interest shown in recent months from a range of energy partners, keen to capitalise on the significant renewable energy generation potential of our site. The GCRE site’s size, power grid and telecoms connectivity make it very attractive for the development of renewable energy assets and data centre infrastructure that can sit alongside the rail project. That’s why we have extended our search for an Energy and Data Centre (EDCP) partner into 2026.
Supporting GCRE to continue with these two strands of work in parallel – to secure an energy and data centre partner for the site and to use that as a springboard to help deliver the wider rail vision – is still key to our success. While the development of new energy and data centre infrastructure on the existing site is important, only completion of the rail elements of the project can offer the region the more profound and long-term social, environmental and economic impacts.
This package of measures that the Welsh Government is supporting us to take forward will hopefully help to address some of the funding challenges identified by the private sector and unlock an investment partner. Something that will allow the next Welsh Government to make a final investment decision on GCRE in 2027.
The Global Centre of Rail Excellence has always been about more than simply railway technology innovation. As a strategic economic development project for South West and Mid Wales, the ambition is to ensure GCRE has a positive, long-term and sustainable impact on the people and the communities around it.
2026 will be a big and important moment for Wales. And an important one for GCRE, too. Let’s hope it’s a breakout time for both.