The planned Cardiff Parkway train station and integrated business park project has been appraised by engineering giant Rolls-Royce as having all the right credentials for potential significant investment.
It comes as its submarine division, Rolls-Royce Submarines, last week officially launched its satellite office near to the proposed development in the St Mellons area of Cardiff, which will employ 120 high-skilled jobs (currently 40). The division is expanding on the back of its Ministry of Defence contracts and the 海角视频鈥檚 role in the trilateral A海角视频US programme, which also includes the US, that will deliver a new generation of nuclear submarines for the Australian Government. Over the next 30 years the contract will be worth 拢175bn.
The proposed Cardiff Parkway project, which has been driven by the Roberts family and financial services firm Investec, secured planning consent from the Welsh Government earlier this year, nearly three years since it was first given the green light by Cardiff Council before being called in by the Cardiff Bay administration.
While not reflecting any current position of the Welsh and 海角视频 governments and Rolls-Royce, what would give added momentum is if the parties entered into a memorandum of understanding over the Parkway site.
For the First Minister this would be a significant boost ahead of her international investment summit at the ICC Wales in December. The First Minister said she has reset her government鈥檚 relationship with the company and would give its full support to back the case for additional investment. Despite having a 10% stake in the Parkway project, through South Wales Development, former ministers Julie James and her deputy Lee Waters were at best agnostic to the proposed Parkway project.
President of Rolls-Royce Submarines, Steve Carlier, said its new satellite office was very much a 鈥渇lag in the ground鈥 and the Parkway site ticks all the right boxes in terms of potential follow-on investment, although he said he could not at this stage give any specifics on where in the Rolls-Royce portfolio, from aerospace to small modular reactors, it could possibly come from.
Rolls-Royce is well placed for further expansion as the 海角视频 ramps up defence spending, with increasing global security threats, while in terms of energy security small modular reactors will form part of a mixed approach to domestic energy generation alongside renewables. Its civilian work for aerospace and engineering is also expanding.
On the merits of the Parkway site, which if delivered would provide a new mainline train station on the South Wales Mainline and a secure 400-acre site, but with close proximity to Cardiff, Newport, Bristol and London, Mr Carlier said: 鈥淚f you look at the characteristics that come with any high-technology and high-intellectual-value business, what do you need? Well, you need first and foremost a strong, willing and growing population. You also need your above-average academic content within that. That is a rich vein we did know about and that is why we鈥檙e here (Rolls-Royce Submarines).
"We always like to have optionality and growth potential where we go. There is a super-strong academic backbone around this area with access to nine high-quality universities (on both sides of the border), all of which are very open to supporting, if you like, our syllabus.
鈥淭here is very good connectivity by road and rail and it connects to the places we would like to be connected to as well. Our principal customer is only half an hour by rail in Bristol and the MoD鈥檚 headquarters in London are very accessible from here and we can go north and south quite easily as well.
"So, good connectivity, a really strong academic background and a competitive city (Cardiff), so it is affordable to come here, alongside a growing and willing population. We have put a flag down with this facility (satellite office) here and we don鈥檛 do that lightly. We have always got an eye on what could be next down the line. I am not able to comment on any of those today but we wouldn鈥檛 be here if we thought this was limiting in any way and didn鈥檛 have extendability.鈥
Asked whether he was encouraged by the increased engagement with the Welsh Government and officials, as well as the long-established backing of Cardiff Council and the wider Cardiff Capital Region, he said: 鈥淎bsolutely, and I repeat we wouldn鈥檛 put this flag down here if it didn鈥檛 have extendability and I鈥檓 really impressed by the enthusiasm of the Welsh Government and the local authority (Cardiff). That is a big plus for us as we need a very receptive population and local governance as well. We do respect that, and that is why we are here.鈥
鈥淓very business wants to grow and we are in some very interesting markets. While stressing this shouldn鈥檛 be conflated with any potential investment at Parkway he said: 鈥淲e鈥檝e gone on record to say that in terms of economic growth potential within our portfolio we probably have two or three of the strongest growth propositions within the 海角视频. At a Rolls-Royce and 海角视频 level we have been very clear that we intend to re-enter the narrow-body market (aircraft engines), which is potentially the largest source of growth in the 海角视频, and similarly in nuclear power, so SMR and AMR (advanced modular reactors) are top five growth areas for the 海角视频 and land right in our sweet spot.鈥
For Rolls-Royce to commit to creating a hub at Parkway it would first require that the mainline train station be delivered. The intention is still for a four-platform station. The original cost of the station, and required rail corridor improvements, with the skewing of the tracks and upgrading of the relief lines, was put at around 拢120m 鈥 which included a contingency for an overspend.
With the protracted Welsh Government planning process and rising construction costs, that figure is understood to have risen, but not by a significant amount. The private sector finance element would still require securitisation from Transport for Wales entering into a long-term lease to operate the station.
The current allocation for rail enhancement projects in Wales is 拢455m, following the Chancellor鈥檚 spending review back in June. That includes 拢90m for project development. It also includes money already committed to upgrade the relief lines on the South Wales Mainline at around 拢50m, as well as a 拢50m contribution to the upgrading of Cardiff Train Station.
A project to increase the number of trains able to run between Wrexham and Merseyside, at Padeswood sidings in Flintshire, will consume around 拢30m of the pot. The 拢455m also includes a 拢48m one-off payment to the Welsh Government for the South Wales Metro, although it will be for ministers to decide how and where that will be spent.
The five planned Burns stations between Cardiff and the Severn Tunnel, recommended by the Lord Burns Commission set up by the Cardiff administration to improve public transport after its decision not to proceed with a 拢1bn M4 Relief Road, would each have an estimated cost of around 拢70m (although less for Magor). If you then throw in the required rail corridor investment for Parkway - which has on its doorstep a far higher population density than any of the Burns stations which none have planning permission for yet - then the current settlement is nowhere near enough.
More funding would need to be fought for in the next three-year spending review just to fund all five Burns stations.
If the 海角视频 Government as the 鈥榗ustomer鈥 and Rolls-Royce as a 鈥榮upplier鈥 agreed that a major hub is established at Parkway, then a separate funding allocation for Wales should be prioritised for Parkway rail corridor investment. With a hub having the potential to create thousands of high-skilled jobs, and with an eye on the Senedd election next spring, that shouldn鈥檛 be seen as much of an ask of the 海角视频 Government, especially after decades of under investment in the Welsh rail network.
Ms Morgan said of the Parkway station project: 鈥淢y understanding is that initially there was an expectation it was going to be entirely privately funded, but what I recognise is that costs change and that conversations will need to continue not just with the Welsh Government, but crucially the 海角视频 Government, as they have responsibility for rail infrastructure. It is one of the issues I am raising with the Chancellor.
鈥淭here is a responsibility here. We have been underfunded when it comes to rail in the past and I think frankly the 海角视频 Government does need to go further when it comes to rail investment. It is better than we had before, but as far as I am concerned this is just the beginning of correcting an injustice when it comes to rail infrastructure. So, conversations will continue but there is a specific programme here (Rolls-Royce) that I think may be of interest to the 海角视频 Government because of the links with jobs and growth.鈥
She conceded that the current funding deal on rail in Wales doesn鈥檛 have the required capital to deliver everything, including five Burns stations.
She said:鈥淭here isn鈥檛 enough to go around and that鈥檚 the point. What we have had I hope is just the down payment on what we will need. So, those conversations will continue in relation to us getting our fair share of rail infrastructure funding from the 海角视频 Government.鈥
On the potential for Rolls-Royce expansion and investment at Parkway she added: 鈥淚t is great, first of all, that we have got this blue-chip company (Rolls-Royce satellite office) investing in Wales and as far as I am concerned this is just the beginning and starting out on a new relationship where we are building trust.
"What I need them to know is that we as a government are committed to seeing this grow. It is a complex area because what they are interested in, almost as much as anything else, is whether the skills are available here. And skills are actually part of our responsibility in Welsh Government. So making sure that we are delivering what they need is going to be crucial in terms of building that relationship going forward and adapting what we are offering here to serve the needs of a company which we hope will be growing.鈥
Rolls-Royce Submarines at its new Cardiff operation - it has also invested in a satellite office in Glasgow - is recruiting for a variety of roles, including mechanical design, materials engineering, structural integrity analysis, thermal analysis and fluid dynamics.
