Funding for the development of public sports facilities to meet the needs of the general public and the development of our national athletes

Question

Mr Muhamad Faisal Abdul Manap: To ask the Acting Minister for Culture, Community and Youth (a) whether there is a flaw in the financing arrangements for the Changi Motorsports Hub vis-à-vis the Sports Hub in light of repeated difficulties faced by investors since the commencement of the proposed motorsports hub project in 2009; (b) how much costs have been incurred by the Singapore Sports Council (SSC) as a result of the varied developments from March 2009 to June 2013; and (c) how can the Government together with the SSC prevent such a saga from occurring again.

Response

Acting Minister Lawrence Wong: As a general policy, the government provides funding for the development of public sports facilities to meet the needs of the general public and the development of our national athletes, and where there is market failure. For motorsports, the Singapore Sports Council (SSC) and other public agencies concluded through a market study in 2007 the feasibility of a fully private sector funded motor sports facility in Singapore. SSC then launched a public tender to develop and operate the Changi Motorsports Hub as a fully private sector project. The tender attracted three bids. The winning bidder of the tender, SG Changi, committed to develop the facility at its own costs according to terms and conditions agreed with SSC. It later found itself unable to secure the necessary funds to continue with the project, after paying for the land, leading to SSC's termination of the contract with SG Changi.

To decide if the site should be re-tendered, SSC conducted a request-for-information exercise to assess the current market interest, since the initial market study was done some years ago. In this latest exercise, interested parties all asked for either government subsidies or concessions to make the project commercially attractive. Considering the limited outreach to general public and community impact, and in consultation with other government agencies, we concluded that it would not be a good use of public funds to accede to these proposals.

I wish to explain that this project is very different from the Sports Hub which is meant to be a national facility that serves the sporting and recreational needs of the general public and high performance athletes across many sports. The Sports Hub is hence structured as a Public-Private-Partnership, where SSC pays an annual unitary payment to Sports Hub Pte Ltd for financing, designing, building and operating the project.

For the Changi Motorsports Hub project, SSC has not incurred any costs beyond what it would normally incur for such a tender. In the initial tender exercise, SG Changi had reimbursed SSC's professional advisors' fees. Any post-termination costs in respect of or relating to the site, such as the depreciation cost of the site, the cost of upkeeping the site and the reinstatement of the site will be extracted from the eventual partial refund to SG Changi after the land is returned to the State.

We should recognise that Changi Motorsports Hub was all along intended as a commercial and not a public venture, and companies, in bidding for such projects, were expected to be diligent in managing their own risks. While the termination of the project was primarily due to the inability of SG Changi to raise funds, we have learned to be more circumspect about the financial strength and possible financing challenges faced by bidders in awarding future tenders.