Chancellor Rachel Reeves has given the proposed Cardiff Parkway mainline train station and integrated business park project a major boost in her Budget with a commitment to provide funding to help realise its huge economic potential.
The ambitious scheme, which is being driven by Cardiff Parkway Developments, secured planning consent from the Welsh Government in January, nearly three years after it was called in as a development of national significance. It has been identified by engineering giant Rolls-Royce as a potential new hub that could create thousands of high-skilled jobs.
It has appraised the site as ticking all the right boxes for such an investment. This is based on the business park having its own train station, access to a skilled workforce, nine universities across South Wales and the West of England, and the security afforded by a 200-acre site with close proximity by rail to both Cardiff and Bristol.
The company has already established a satellite office at a nearby business park in St Mellons for its Submarines division, which will eventually create 200 jobs.
More design work is required to conclude the final cost of a four-platform Parkway mainline station, which due to construction inflation and a protracted planning process has risen on the original pre-pandemic projection.
In her spending review in the summer, the Chancellor announced £445m for rail enhancement projects in Wales. While welcomed, in comparison tens of billions have been committed for rail schemes in the Midlands and the North of England.
The £445m includes £90m for project development. It also includes previously committed funding to upgrade the relief lines on the South Wales Mainline—around £50m—as well as a £50m contribution to the upgrading of Cardiff Central Station.
A project at Padeswood sidings in Flintshire, which aims to increase the number of trains able to run between Wrexham and Merseyside, will consume around £30m of the allocation. The amount also includes a £48m one-off payment to the Welsh Government for the South Wales Metro, although it will be for ministers to determine how and where that funding is spent.
The planned Burns stations between Cardiff and the Severn Tunnel - recommended by the Lord Burns Commission, set up by the Welsh Government after it decided not to proceed with the £1bn M4 Relief Road - outside of Parkway have an estimated cost of around £70m (with Magor expected to be lower).
Given the required rail corridor investment for Parkway - which is currently the only Burns station with planning consent - the existing settlement is inadequate.
Recognising this shortfall, First Minister Eluned Morgan has been making the case for an improved allocation and backing for Parkway due to the interest shown by Rolls-Royce, in discussions with both the Chancellor and the Prime Minister. That lobbying has now seemingly paid off.
The Chancellor’s Budget policy paper states: “The government recognises the growth potential of the Cardiff Parkway development. The government will work with the Welsh Government and the private sector to develop plans for the delivery and funding of a station to serve the area as soon as possible with government support.”
What additional funding for Parkway - on top of the £445m spending review allocation - will be made available has yet to be determined. The final cost of Cardiff Parkway, with its four platforms, will depend on further design work. However, it is likely to be north of £130m. The station itself (excluding required rail corridor works) is expected to be financed by the private sector in a securitised deal underpinned by Transport for Wales taking a long-term lease, offset by car-parking income.
The investment in the rail corridor includes the upgrading of the relief lines, and the construction of new relief track, for them to be used by passenger trains. The lines also need to be slewed to support four platforms.
Although the proposed 900,000 sq ft business park is attracting interest from other potential tenants, the possibility of it serving as a major hub for Rolls-Royce has undoubtedly loosened the Treasury’s purse strings.
Cardiff Parkway Developments is joint venture between the Roberts family, financial services giant Investec and the Welsh Government (with a 10% stake).
Its chairman Nigel Roberts, said: "I welcome the Budget with the Ƶ Government committing to providing financial assistance to makes this great project for the Welsh economy a reality, underpinned by a joined up approach working with the Welsh Government and ourselves.”
Rolls-Royce is currently in high-level discussions over a potential hub investment at Parkway with the Welsh Government, but also crucially with the Ƶ Government and its main customer, the Ministry of Defence.
The company is also understood to be appraising alternative sites in the North of England for a new hub, though those sites do not offer the unique selling point of Parkway’s integrated mainline station.
Speaking last month, Steve Carlier, president of Rolls-Royce Submarines, said that Parkway had been appraised positively and that its satellite office -while unable to give an firm commitment -could be just a starting point.
He said: "We always like to have optionality and growth potential wherever 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 our syllabus.
“There is very good connectivity by road and rail, and it connects to the places we want to be connected to as well. Our principal customer is only half an hour away by rail in Bristol, and the MoD’s headquarters in London are very accessible from here. We can also travel north and south quite easily.
“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 (the satellite office) here, and we don’t do that lightly. We always have an eye on what could be next down the line. I am not able to comment on any of those today, but we wouldn’t be here if we thought this location was limiting in any way or lacked extendability.”
