The business park element of the Cardiff Parkway mainline train station project could provide an annual economic uplift of up to £265m to the Welsh economy and £5bn over an assessed 20-year period. It would also help Wales punch above its weight in attracting inward investment, according to independent research.
The project for a four platform station on the South Wales Mainline, integrated into a 900,000 sq ft business park, is earmarked for the St Mellons area of the capital. However, it is still awaiting a decision on planning from the Welsh Government, despite earlier indications that one would have been made back in April.
The business park, over a phased development period, could provide around 900,000 sq ft of employment space, comprising grade A office, R&D and tech space, as well as provision for advanced manufacturing. It is the sort of specialist space that is unavailable at scale in the centre of Cardiff.
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The site has been appraised by engineering giant Rolls-Royce as an ideal location for a hub, linked to its involvement in a multi-billion contract for a new fleet of attack nuclear submarines for the Australian government.
As well as the UK Government the AUKUS programme also involves the US government. Rolls-Royce has already taken space for a satellite operation at nearby Paramount Business Park, where it is recruiting for nearly 200 high-tech roles. It has positively appraised Cardiff Parkway due to its public transport access from a mainline train station and dedicated and secure campus space. A hub could see Rolls-Royce creating thousands of jobs at Parkway.
A leaked copy of the Savills report, which was commissioned by the Cardiff Capital Region, shows that Parkway’s business park the positive transport-related economic impact of the proposed four-platform station was not appraised could provide on-site employment for around 5,000.
After assessing the displacement factor of the business park through attracting jobs and investment from other parts of the city region, Savills said: “Total overall net gross value added for the Cardiff Capital Region would be in the range of £175m to £265m annually for the completed scheme.”
Even at the highest end of the displacement range assessment, Savills said it would still result in an estimated rise in net business rates for the region of around £3.3m per annum.
It adds: “The estimated increase in business rates revenue would be about £65m over 25 years on net present value (NPV). With the additional multipliers and lower displacement, this amount could be upwards in the region of £103m (NPV over 25 years).”
“The above assessment does not account for the transport economics-related benefits of the Cardiff Parkway station and park and ride. They do, though, to a degree, allow for these benefits in terms of development enabled as the presence of the station and park and ride is one of the attractions of the site, helping secure added value occupiers. There could, though, be a range of additional benefits not covered by this assessment.”
On the economic potential of the scheme, the report says: “The Cardiff Parkway site serves as a real prospect and impetus for a step-change in quality supply (commercial space), allowing for Wales to punch above its weight in inward investment attraction in key strategic sectors.”
The £5bn gross value added over 20 years is based on the higher annual impact of £265m.
Savills also assessed the impact the project could have on 39 allocated employment sites across the city region. They concluded that only a 12-hectare development site on the northern edge of Cardiff near Junction 30 of the M4 could be seen as a “competitor.” However, a significant part of the site is expected to be assigned for residential.
On existing office and pipeline schemes, Savills said that the level of displacement caused by Cardiff Parkway is likely “to be limited to modest.”
The company behind the Cardiff Parkway scheme is Cardiff Parkway Developments Ltd, in which the Welsh Government is a minority 10% equity holder, having already invested around £6m. The other equity holders in Cardiff Parkway Developments are international banking and wealth management group Investec, with 60%, and the remaining 30% held by entrepreneur Nigel Roberts and his family.
The project, which was first mooted by the Roberts family for the site nearly 20 years ago, is included in Cardiff Council’s local development plan. As expected following the council’s planning approval in the spring of 2022, it was called in by the Welsh Government as a development of national significance, but that wasn’t until October of that year.
The public hearing by the Welsh Government at arm’s length Planning and Environment Decision Wales (PEDW) didn’t commence until July last year. PEDW, through an administrative error, which was quickly rectified, published the findings of its report backing the project for approval last October.
Then Minister for Climate Change, Julie James, confirmed a tightening of the Welsh Government’s Planning Policy Wales, which effectively barred development at sites of special scientific interest (SSSI) not deemed as wholly exceptional. Consequently, the Welsh Government wrote to the planning inspector (Tony Thickett), asking him to reassess a recommendation to approve the application, in light of the updates to planning policy.
That left him with little choice but to reconvene a second public hearing in January of this year. His report and recommendations (although the Welsh Government is not bound by them) is understood to have come out in favour of the project, having been submitted to the Welsh Government back in February.
Parkway, which has cross-party support in the Senedd and Westminster, including from new Welsh Secretary Jo Stevens, should be seen through the prism of being a wholly exceptional case for development in the Gwent Levels on planning balance grounds alone.
Alongside mitigation not only for the loss of habitat but an actual enhancement of the natural environment which regulator Natural Resources Wales (NRW) accepts it should see it clearing the new high bar.
Leader of Cardiff Council, Huw Thomas, has expressed his frustration at the Welsh Government’s dithering on making a planning decision. Speaking recently, the council leader said: “There is full support from the council for the Cardiff Parkway development with a planning inspector’s report known to have been submitted to Welsh Government ministers in February of this year. Cardiff Council gave permission to this development, which is in the local development plan, over two years ago, and it is inexplicable that Welsh Government has taken so long to decide.”
“The Labour Party government in Westminster plans to get Britain building again, and it is imperative that the Welsh Government support Cardiff Council in delivering that agenda in the capital city.”
Under new First Minister Eluned Morgan, the Welsh Government has the opportunity to reset its relationship with the business sector. The bringing of planning into the economy and energy brief makes sense. The new Cabinet Minister for the Economy, Energy and Planning, Rebecca Evans, should make a determination on planning for Cardiff Parkway a priority.
If consented, then Cardiff Parkway Developments would need to revisit its business and financial plans in light of planning delays. The initial pre-Covid indicative price tag for a four-platform mainline train station was put at £120m. With inflationary pressures, that would have gone up significantly.
While always positioned as a privately funded station, being operated by Transport for Wales (TfW), alongside income generated from train companies via a track access charge, would underpin a private sector funding model. TfW, which is wholly owned by the Welsh Government, has worked closely with the project for several years on this approach.
Parkway was identified in the Burns Commission, set up by the Welsh Government to look at options to improve public transport after rejecting what had been a manifesto pledge for an M4 Relief Road, as one of six possible new train stations from Cardiff to the Severn Tunnel. It was also recommended in the connectivity review commissioned by Boris Johnson’s Tory government, headed by then Network Rail chair Lord Hendy, who has since taken up the role as Transport Minister in Sir Keir Starmer’s government.
Funding will be tight to deliver any new stations, and the Welsh Government will be looking to the new Labour Government in London for financial backing.
However, a new station at St Mellons, which would also serve other deprived communities in the city such as Trowbridge, and with a population of 160,000 close by, has a much stronger case than other stations recommended by Lord Burns.
For an investor like Rolls-Royce, and other potential tenants for the employment site at Parkway, they will also be looking for investment in utilising the relief lines on the South Wales Mainline to allow more services to Bristol Temple Meads. This would boost the travel-to-work radius of the scheme.
In her First Minister Questions yesterday, Ms Morgan was asked by former First Minister Vaughan Gething to provide an update on the project.
Ms Morgan responded: “The Cardiff Parkway development is under active consideration and a decision will be issued in due course.”
In a supplementary question Mr Gething added: “I welcome what you have said as First Minister for the need to grow the economy. The Cardiff Parkway project is endorsed in the Burns Commission (which proposed six new train stations in South Wales) report, has a joint section 106 agreement endorsed by Natural Resources Wales for environmental mitigation, and is privately funded with the Welsh Government as a minority joint venture partner. Can the first First Minister give us an update on which minister will now determine this matter and when can we expect a decision on whether this proposal will be approved?”
Ms Morgan responded: “What I can tell you that now that my new cabinet is in place a cabinet secretary will be allocated to the case in the next week so that they can be working towards a decision on this matter, but I cannot provide any further comments on the merits of this proposal in order to avoid prejudicing the final decision.”
