Sports Hub still has financing concerns

Source : Straits Times – 14 Nov 2009

THE troubled Sports Hub is still facing difficulties and the expected construction date could possibly be pushed back further to 2014.

It is understood that the preferred bidder for the $1.87 billion project, the Singapore Sports Hub Consortium, has yet to raise the money necessary for construction to begin at the site of the National Stadium.

The inability to secure funds from the private sector has been a problem plaguing the SSHC since last year, partly as a result of the economic recession.

The consortium said yesterday it had recently launched a financing competition, and that it intends to raise bank debt financing.

Led by construction firm Dragages Singapore, the SSHC expects to receive offers before the end of this year.

‘It’s essentially trying to get loans on the best terms,’ said a source.

A spokesman declined to reveal how much needed to be raised, although it is believed to be at least $1.2 billion, the hub’s estimated construction cost.

The source added: ‘It now all depends on whether we can raise the necessary funds. When that happens, then we can proceed.’

Dragages managing director and SSHC head Ludwig Reichhold said yesterday he was targeting to sign the final contract with the Singapore Sports Council by early next year. In August, he had set the end of this year as a target.

The SSHC had hoped to pull down the National Stadium by the first quarter of next year, but this is dependent on the final contract being signed first.

Demolition will take about three months. Construction can then begin and will take about three years.

Since the project was announced in 2005, its completion date has been pushed back repeatedly from 2010, to 2011, 2012 and then 2013.

Singapore’s hosting of the South-east Asia Games in 2013 is now uncertain.

The hub is a public-private partnership (PPP) project. This means the Government will pay the SSHC – which will design, build, and operate the facility – a monthly unitary payment throughout the project’s 25-year term once the final contract is inked.