300 train building jobs created at £30m Newport centre

CAF built trams for Edinburgh and Birmingham in the UK

Three hundred "highly-skilled and well paid" engineering jobs will be created when a Spanish train manufacturer opens a production factory in Newport.

Construcciones y Auxiliar de Ferrocarriles (CAF) is expected to open its £30m centre where Llanwern Steelworks once stood in autumn 2018.

First Minister Carwyn Jones described it as a "major coup for Wales". The company looked at 100 sites in the UK.

It is understood the Welsh Government offered a £3m grant to secure the jobs.

The Celtic Business Park site, bordering the south Wales main railway line to London and next to the proposed M4 relief road, was chosen from one of four potential shortlisted locations.

CAF say Newport was chosen because of its links to roads, rail and ports, as well as the "availability of local people with engineering skills".

The company's UK director, Richard Garner, said he intended bidding for the contract to provide new rolling stock for the South Wales Metro.

He added that their long-term future in Newport was not dependent on getting the contract to provide new trains to whoever runs the next Wales and Borders franchise, or on the M4 relief road being built.

CAF, which has a turnover of more than £1bn and employs about 7,000 people worldwide, built trains for the Heathrow Express in London.

The firm, whose headquarters are in Spain's Basque Country, is also in the bidding process for new London Underground trains.

The Celtic Business Park is on the old site of the Llanwern steelworks in Newport

It has confirmed an interest to tender for the HS2 high-speed line that, in the first phase, will link London and Birmingham, and has also supplied trams to Edinburgh and Birmingham

'Phoenix rising from the ashes'

"Today's announcement is a major coup for Wales and a big vote of confidence in our manufacturing industry," said Mr Jones.

"We are, once again, competing and beating others on the world stage to secure significant investment to Wales.

"This £30m investment is a major economic boost that we hope will kick-start the growth of our rail sector and create hundreds of highly skilled, very well paid jobs."

The new facility, on the old Llanwern steelworks site, will be more than 46,000 square metres in size and is set to employ 200 people when it opens, rising to 300 by 2019.

Analysis by Sarah Dickins, BBC Wales economics correspondent

Where for decades steel was made from raw materials and then rolled at the steelworks, CAF hopes that in the near future it could be making rolling stock for the Metro.

It is quite a turnaround for the site and it will have cheered many in the area - a community brought up on steel and the industries that use it.

Ironically, it is that infrastructure, left behind from the steelworks, which would have helped to make the location attractive to CAF.

CAF is interesting in bidding for trains for the HS2 high-speed line

There is a dedicated rail line that used to supply coking coal from Port Talbot steelworks docks that in theory could be used to supply the new engineering works with steel.

And then there are the skills: Although Tata still employs 450 steelworkers at its Llanwern strip mills, Newport has seen the decline of heavy industry in recent years, most notably Rowecord in 2013 and then AIC Steel last year. But that engineering expertise remains in the city.

Newport council leader Debbie Wilcox said it was "almost like a phoenix rising from the ashes, seeing this company here building the skills for the 21st Century".

She said: "It's absolutely fantastic that we are bringing a manufacturing base back into what was the extremely complex and diverse manufacturing base of the steelworks."

The jobs boost for south east Wales comes weeks after the Welsh Government rejected a £210m plea to help build the Circuit of Wales in Ebbw Vale, Blaenau Gwent.

'Start of a new chapter'

Economy Secretary Ken Skates said: "As well as creating 300 high calibre jobs, it also coincides with our major Welsh Government Metro rail investment in south east Wales, details of which will be unveiled over the coming weeks."

Welsh Secretary Alun Cairns said it was "the start of a new chapter" for the site.

"CAF is the latest major company to invest in Wales and is yet another strong endorsement of the skills-base and the business environment we are cultivating here ," he said.

Mr Garner from CAS said: "We now have solid economic basis for further increasing our footprint in the UK.

"The establishment of this facility will serve CAF's long-term aspirations to dominate the UK market for many years to come."