Sports Hub project hit by lack of money

Source : Straits Times - 24 Apr 2009

A LACK of financing has put the brakes on the $1.87 billion Singapore Sports Hub project at Kallang.

Construction cannot go ahead because of this, Mr Ludwig Reichhold, managing director of construction firm Dragages Singapore, the lead agency of the Singapore Sports Hub Consortium (SSHC), told The Straits Times yesterday.

He said: ‘The project is more or less ready to start because the design has been developed to a stage where we have a provisional permit to start.’

However, he added, ‘obviously, we have found difficulty in financing because of the financial crisis, and we’re trying to resolve this with the Government.’

He was confident, however, that this would be a short-term hiccup, saying: ‘This situation with the financial market is a temporary one, and we’re trying to overcome that. Once that is resolved, we will be ready to start.’

When contacted, asset management firm United Premas, another member of the consortium, echoed Mr Reichhold’s comments on the difficulty of securing financing.

Other members of the consortium, meanwhile, are keen to get started.

Asked about the progress in planning, co-lead designer of the project, DP Architects’ Mr Teoh Hai Pin said: ‘As far as I’m concerned, the design side is very advanced. We’re ready.’

The Sports Hub, an integrated complex featuring a 55,000-seater stadium, watersports centre and leisure, shopping and dining facilities, is due to be completed by end-2011, in time for Singapore to host the 2013 South-east Asia Games.

SSHC won the bid to build the Sports Hub in January last year, but little work has been done so far. The contract agreement was to have been signed in March last year, followed by the tearing down of the National Stadium the following month. The contract remains unsigned, and the Grand Old Dame still stands.

The lack of progress has raised speculation about SSHC’s ability to deliver on its plans for the 35ha hub.

The latest came on Wednesday when the London-based, subscription-only online publication Infrastructure Journal said the Singapore Government was ready to step in and bail out the struggling project.

The Journal, which claims a global readership that includes investors and government officials, also said that banking giant HSBC, the consortium’s financial adviser, is looking for 10 to 12 banks to provide financing. The report said no bank was prepared to put up more than $200 million for the project.

When contacted, both the Ministry of Finance and HSBC declined to comment on the report. Said HSBC’s resource and energy group director Lynn Tho: ‘We are working closely with the Government and are still in discussions.’

The Sports Hub is a public-private partnership (PPP) project. The Government will pay the SSHC - which will design, build, finance and operate the Hub - a monthly unitary payment throughout the project’s 25-year term. In return, the Government will receive a cut of third-party revenues.