Two parties still keen

Source : Straits Times – 14 Jul 2009

AT LEAST two parties continue to express strong interest in the race to build the Changi Motorsports Hub, and the poor economic outlook is not proving an obstacle.

With seven weeks to the deadline, the parties – believed to be listed company Haw Par Corp and Singapore Agro Agricultural (SAA) – are in the final stages of bid-submission for the tender.

The hub – with a permanent track at least 3.5km long – will be fully funded by the private sector, and is expected to cost several hundred million dollars.

Seven consortia have obtained tender documents from the Singapore Sports Council since the Request for Proposal to build and manage the hub was launched on March 30.

Apart from Haw Par and SAA, the others are believed to include the leisure-oriented SUTL Group and entrepreneur Peter Kwee’s Group Exklusiv.

The SSC’s deputy director of motorsports industry development, Fan Chian Jen, said: ‘The companies…ranged from those which were quite clear that they would put in a bid from the start, to those that wanted to have access to detailed project specifications to see if it was a good fit with their existing lines of businesses.’

Still, interest has waned among some. This includes a Middle Eastern group, whose plans involved a theme park but deemed the 41-hectare site too small. The tight land space is also believed to be a reason for Group Exklusiv’s dip in interest.

The hub is next to the Singapore Airshow grounds, with a size of about 58 football fields. There will be a sheltered grandstand for at least 8,000 spectators, a driver training school, and food and beverage facilities.

Observers noted that one challenge is securing financing from banks in this tough economic climate.

The privately-funded $1.87 billion Sports Hub that will replace the National Stadium at Kallang is being blighted by a similar problem.

Fan, however, stressed that the SSC had taken steps to make the Changi project more commercially attractive.

For instance, after the onset of the financial crisis last year, the SSC raised the total motorsports and commercial gross floor area (GFA) from 13,000sqm to 67,000sqm – of which 35,000sqm is commercial GFA.

An insider who has followed the project since it was first announced in Nov 2007 said: ‘The parties interested have the resources and pockets to fund it. In the long run, the Hub can be profitable if there’s a good business plan.’

Tender submissions close at the end of next month. A panel comprising government agencies will select and announce the successful bidder around the first quarter of next year, and the Hub is expected to be operating by early 2012.

The Grade 2 facility, which will have a tenure of 30 years, could host any race except Formula One.

The successful bidder must stage at least three international races every year. Possibilities include the A1 Grand Prix and motorcycling’s MotoGP.