Edwin Tong, Singapore’s Minister for Culture, Community and Youth, has revealed that the cost of terminating the government’s public-private partnership which operates Singapore Sports Hub will reach S$2.3bn (£1.37bn/€1.63bn/$1.67bn).
Addressing the government yesterday (Monday), Tong said that the sum would be “comparable to the financial obligation committed under the PPP if we had chosen to continue it, without termination,” Channel News Asia reports.
The government announced in June that it would be taking ownership and management of the Sports Hub after electing to terminate its partnership with the private consortium that has been running the complex since it opened in 2014.
National agency Sport Singapore (SportSG) initiated the termination of the partnership, stating that it had reached a mutual agreement with SportsHub Pte Ltd (SHPL) over the termination and the process of handover.
SportSG, which is set to officially take over the Sports Hub on December 9, said the move was made with a view to making the complex the “heart of sports in Singapore” and better capitalise on the planned Kallang Alive project.
SHPL, which currently consists of three equity partners – Infrared Capital Partners, Global Spectrum Asia and Cushman & Wakefield Facilities & Engineering – was engaged under the PPP in 2010 to design, build, finance and operate the Sports Hub.
The cost of the project was borne by SHPL, and SportSG has paid an annual fee from 2014, to finance and operate the Sports Hub. The PPP was due to expire in 2035, but the terms of the project agreement allowed for SportSG to decide if and when the project should be terminated, and thereafter, for SportSG to take over the ownership and management of the Sports Hub.
Local newspaper the Straits Times reported in June that SportSG would have been liable for S$2.32bn, plus future operating costs, if the public-private partnership remained in place.
Tong has now revealed that the cost of terminating the partnership will be around the same amount. Channel News Asia reports that the government will have to pay SHPL a S$1.5bn termination fee along with the future costs of running the complex which will total around S$68m per year from 2023 to 2035.
Tong added: “If we were to draw a parallel comparison against the balance tenure of the project agreement … that brings us to approximately S$800m over the balance period until 2035.
“Taking the two buckets of costs to be paid for the termination – the sum to be paid to SHPL which largely reflects the upfront capital expenditure and future operating costs – this would be a fair deal for the government on which to take back the assets.”
The government is set to launch more community programmes and organise more high-profile events at the Sports Hub, which Tong said will likely lead to higher expenditures and increases in operating and maintenance costs. Tong said the decision to terminate the partnership was taken after the government evaluated the performance of the complex over the past 12 to 18 months.
The Sports Hub is made up of the 55,000-capacity National Stadium, OCBC Aquatic Centre, OCBC Arena and Kallang Wave Mall. Singapore Indoor Stadium, which was built in 1990, was also brought under the Sports Hub banner.
Image: Singapore Sports Hub
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