Ministers scrapped plans for the aviation repair centre at St Athan
An aviation repair project ended up costing the taxpayer £113m and failed to deliver thousands of jobs, an official investigation has found.
Project Red Dragon at St Athan in the Vale of Glamorgan, floundered when the Ministry of Defence (MoD) decided to switch work to other RAF bases.
The report by the National Audit Office and the Wales Audit Office criticises both the MoD and Welsh authorities.
But ministers said the move had saved money and "offered better support".
Lessons had been learned from the project, Defence Minister Quentin Davis said.
"However, the decisions taken in 2004 to transfer fast jet repair work to RAF frontline bases from St Athan resulted in savings worth more than £1.4bn," Mr Davis added.
The Red Dragon project was started in 2000, aimed at modernising ageing MoD facilities at St Athan along with the construction of a super hangar for fast jet repair.
It also saw an aerospace business park built, backed by the then Welsh Development Agency, which is now part of the assembly government.
The main tenant for the new super hangar was to be the Defence Aviation Repair Agency - Dara.
But in 2005, UK ministers announced they were closing the fast jet business at St Athan, with the loss of hundreds of jobs.
I always argued the decision to move work from St Athan would be bad for the Royal Air Force and bad for British taxpayers
MP for Vale of Glamorgan
In addition, the auditors report published on Friday found that instead of creating up to 4,000 new jobs over a 15 year period, so far only 45 new posts have come to the site.
Tim Burr, head of the National Audit Office said: "Both the Ministry of Defence and the Welsh authorities have invested a considerable amount of time, effort and money in creating modern aviation repair facilities in south Wales, with a super hangar which is now sitting almost empty.
"The Red Dragon project underlines that public bodies need to have considered all implications of their respective strategies before commencing joint projects."
The Auditor General for Wales, Jeremy Colman added: "The Ministry of Defence and the Welsh authorities failed to collaborate sufficiently throughout the project.
"The Red Dragon project highlights the danger in large and complex projects that involve multiple public bodies of insufficient openness and information sharing."
However, despite the criticisms, groundwork on the scheme is now set to pay off in a different way.
The super hangar and the surrounding facilities at St Athan have been key in securing a £12bn military defence academy.
First Minister Rhodri Morgan said St Athan might not have won the contract for the training academy without the super hangar.
"That is now the jewel in the crown," he said.
"That actually was the reason why we won the battle to have the defence training academy.
"Would we have had any jobs at all (without Red Dragon)? And I'm pretty confident the alternative would have been RAF St Athan withers and dies - no jobs whatsoever."
An artist's impression of how the military academy would look
According to the MoD, the training academy, is expected to create 2,500 jobs on site, with a further 750 to 1,500 additional jobs in the wider economy and up to 1,500 jobs in the construction phase.
Responding to the joint report, and the MoD decision to end Dara fast jet operations at St Athan, a spokesman for the assembly government said: "Regrettably, the decision that St Athan was not the best option for fast jet repair reduced the ability of the Welsh Development Agency to develop the site.
"However, if the MoD had not built the super hangar at St Athan, it would have accelerated the removal of fast jet repair work away from south Wales."
But the Vale of Glamorgan MP, John Smith, said Friday's report vindicated his campaign at the time to save the aviation business.
"The Defence Select Committee, of which I am a member, described the move as 'perverse' and 'incomprehensible'," he stated.
"I always argued the decision to move work from St Athan would be bad for the Royal Air Force and bad for British taxpayers."
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