Motorsports hub: 3 groups unveil plans

Source : Straits Times – 8th Sep 2009

SLEEPY Changi could soon stage motorcycling’s equivalent of Formula One, have a race driving academy whose graduates include top F1 drivers, or be transformed into a family-friendly shopping and entertainment destination.These tantalising features and more were dangled by the three groups bidding to develop the Changi Motorsports Hub, a facility crucial for Singapore to be an international motorsports destination, in separate presentations to the media yesterday.

The hub will be located on a 41ha site near Changi Airport and is expected to cost between $200 million and $300 million. It will be completed in late 2011.

Based on tender specifications, it will have a track that can host any race except F1, grandstands for at least 8,000 spectators, and car industry-related amenities. Singapore Agro Agriculture’s (SAA) trump card is that it has
clinched a deal to stage MotoGP at night – a coup which would see Singapore hosting the top tiers of both motorcycling and motor-racing under the stars. ‘That’s the jewel in our crown,’ said chief operating officer Jason Wong of SAA Holdings, the company behind food-and-retail hub Turf City. Sports Services, backed by public-listed leisure and health-care products company Haw Par Corporation, emphasised its strong financial position.

This is a possible edge given the trouble in securing loans which is preventing another mega project, the $1.87billion Kallang Sports Hub, from getting started. Haw Par executive director Chng Hwee Hong said: ‘We have a strong balance sheet and a reputation to uphold. Financing is not a main concern, what matters is the project’s long-term sustainability.’

Subscription fees from a 3,000-member MotorSports Country Club will help defray the hub’s capital and operating costs. Members will have free use of the 4.2km track – good enough to be an F1-test venue – and the right to rent
bonded garage space. The internationally-renowned and United States-based Jim Russell driving academy – graduates include current F1 championship leader Jenson Button – will be another draw. Track designer Hermann Tilke, who drew up the Marina Bay F1 circuit, also told the Sports Services consortium recently that MotoGP promoters were keen for a tie-up if it won the bid.

SG Changi, fronted by Jurong Kart World, is banking on facilities that will provide entertainment for a wider crowd than just racing enthusiasts. ‘Most race tracks are a men-only venue but we want to sell ourselves as a family and tourist destination,’ said Mr Norman Simon, managing director of norman2, the firm which is marketing the bid. Video arcades, a 120-room three-star hotel, a museum and beach activities are part of its proposal.

Five criteria will be used in evaluating bids: Ability to position the hub as the preferred venue for international motorsports events (40 per cent); contribution towards developing a centre of excellence for motorsports training and education (20 per cent); financial and business sustainability (20 per cent); contribution towards developing the local motorsports ecosystem (10 per cent), and attractiveness of commercial mix and events (10 per cent).

The winner will be announced in the first quarter of next year.

Three vie for Changi Motorsports Hub

Source : Business Times – 28 Aug 2009

3.5km race track will have grandstand for at least 8,000

It’s all systems go for the Changi Motorsports Hub (CMH).

Three of the seven parties that applied for the Request For Proposal (RFP) to build and manage the 41 hectare hub submitted tender proposals by the 4pm deadline yesterday.

And the outcome is one the Singapore Sports Council (SSC) is happy with, given the challenging economic climate.

Submissions came in from Singapore Agro Agriculture, Sports Services, which is linked to Haw Par Corporation, and SG Changi, a consortium of different partners.

The winning party will be known by the first quarter of 2010.

‘Haw Par submitted a bid before the close this afternoon,’ Haw Par confirmed yesterday when contacted by BT.

The other four parties that initially expressed interest in the tender documents when they were released at end-March include SUTL Group and Peter Kwee’s auto group Exklusiv.

The three tender proposals received are ‘a good indication that the value proposition for Changi Motorsports Hub remains strong,’ said SSC chairman Alex Chan.

‘This milestone will take Singapore a step closer to becoming a premier motorsports destination.’

However, BT understands that some parties raised concerns during the months leading up to the tender submission deadline.

These ranged from the stringent terms in the RFP to securing the several hundred million dollars required for the project, especially during the downturn.

CMH, which will be ready by end-2011, will feature a permanent race track of at least 3.5 km and a grandstand for at least 8,000 spectators.

A little over half of the 67,000 sq m of gross floor area (GFA) will be devoted to commercial activity, which can include entertainment complexes, food and beverage facilities, retail outlets and convention halls.

Previously, the total motorsports and commercial GFA was set at 13,000 sq m, but SSC later upped the area to 67,000 sq m to make the project more commercially viable.

CMH is expected to contribute significantly to the government’s aim of developing a $2 billion-a-year sports industry by 2015 and having 20,000 people in sports-related jobs.

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.

Motorsports hub proposal hits bumps

Source : Business Times – 13 Jul 2009

Terms of tender, poor economic climate, site conditions raise risks, costs for potential bidders

The race to build the Changi Motorsports Hub (CMH) is turning into a bumpy ride.

Since the Request For Proposal (RFP) for the project was released on March 30, seven parties – both local and international consortia – have obtained the tender documents, said the Singapore Sports Council (SSC).

But potential bidders are finding the terms in the RFP too onerous, said an industry source. And with the economy still barely on the mend, the risks involved in going into such a mega project are heightened, added the source.

In essence, the proposed CMH will feature a permanent circuit on a 41-hectare site, as well as an entertainment complex, food and beverage facilities, retail outlets and convention halls. The track will be at least 3.5km long and will be Grade 2 certified by the Federation Internationale de l’Automobile and Grade 1 certified by the Federation Internationale de Motocyclisme.

One challenge facing potential bidders appears to be landing the funding to pull off the project, especially given that banks are treading cautiously in the current economic climate. Without financial support from the banks, embarking on the project would require deep cash reserves.

In addition, the site – which sits on reclaimed land – appears to present technical difficulties. Soil conditions are not ideal and soil settlement could affect the facilities built on the site. Sewer lines also need to be run, all of which translates to high costs.

With a total price tag in the region of several hundred million dollars, potential bidders are finding this a tough decision to make.

‘We are currently studying the commercial viability of the project,’ said a spokesman for Haw Par Corp, one of the parties looking to bid for the tender.

‘The government has got to work together with the winning bidders to keep the costs low. If they can help relieve some of these costs, it is workable,’ said Knight Frank managing director Danny Yeo, adding that the CMH will benefit Singapore as well. The firm is part of a consortium that is keen to bid for the project.

Difficulties aside, Mr Yeo is convinced of the potential that the CMH offers. ‘We are excited. There’s a lot of potential,’ he said, pointing to the various uses of the track, coupled with the integrated commercial activities, as well as its close location to the city. Other parties reportedly in the running to bid for the project include the SUTL Group, Singapore Agro Agricultural and Peter Kwee’s group, Exklusiv.

In response to queries from The Business Times, SSC said: ‘In the current economic climate, it is expected that the consortia are facing the same challenges as other businesses when it comes to securing finances. We can therefore expect to see a mixture of debt financing and equity financing from the market.’

At this point, there is no indication that any of them are pulling out of the bidding, it added.

‘We understand that some of them are approaching one another to explore consolidation of resources to put forth bigger and better proposals. We will continue to engage them in regular dialogue sessions leading up to the closing date of bid submissions,’ SSC said.

The closing date is August 27.

The successful bidder – expected to build and operate the track for 30 years – will be selected by early next year. Project completion is scheduled for the fourth quarter of 2011, with the track opening by the first quarter of 2012.

Now open for bidding

Source : Straits Times - 31 Mar 2009

THE race to build the Changi Motorsports Hub (CMH) has officially flagged off, and at least three contenders are jostling for the chequered flag.

After more than six months of delays owing to market research on the Hub’s potential, the Request For Proposal to build and manage CMH was released by the Singapore Sports Council at 3pm yesterday.

Within the first hour, two bidders - leisure-oriented SUTL Group and car-and-leisure group Singapore Agro Agricultural (SAA) - made their $10,000 deposits and collected the documents at the SSC office along Mountbatten Road.

The third bidder is a consortium of local and international firms - according to Knight Frank’s deputy managing director Danny Yeo, whose real estate consultancy firm is part of the consortium.

‘We’re very confident about our bid,’ said the SAA man who collected the documents. He refused to divulge more.

Optimism will be much needed to meet the SSC’s challenging specifications, which were developed with the help of specialist consultants Confluence and race-track adviser VDM Group.

The CMH will sit on a 41-hectare plot, the equivalent of about 58 football fields, next to the Changi Airshow grounds.

The size is more than double the initial 20ha plot set aside by the Government, thanks to added space from the Airshow’s carpark. There will be a permanent track of at least 3.5km long and a sheltered grandstand for at least 8,000 spectators.

The track, expected to be completed by 2011, will be certified Grade 2 by the International Automobile Federation and Grade 1 by the International Motorcycling Federation - so expect races like MotoGP, Super GT and A1 Grand Prix.

Apart from hosting international motorsports events, SSC chairman Alex Chan said the Hub also had to be a centre of excellence for motorsports training and education, and be financially and commercially sustainable.

‘We plan to have a circuit that runs 24/7, whether or not there’s motorsport activities,’ said SSC’s deputy director (motorsports) Fan Chian Jen.

This means bidders must also consider including entertainment, retail, convention and hospitality facilities, along with a racing academy and motorsports-related services.

Chan estimated the Hub, which will be entirely privately-funded, will cost ’several hundred million dollars’.

Among the returns: uniqueness.

VDM’s principal Enzo Biagioni-Froudist said: ‘The site being compact is actually quite an advantage, as it offers the opportunity for spectators to see the majority of the race, majority of the time.’

Proposal submissions will close on Aug 27. A panel comprising various government agencies will select and announce the successful bidder by the first quarter of next year.

An industry source said that Peter Kwee’s Group Exklusiv and Haw Par Corp are two other potential bidders.

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Changi Motosports Hub

Where: Next to the Changi Airshow site

What: 41 hectares of sea-front land with capacity for a racetrack of at least 3.5km (International Automobile Federation Grade 2 certified) and a sheltered grandstand for at least 8,000 spectators

Which: Races expected include MotoGP, Super GT, World Touring Car Championship, A1 Grand Prix

When: Submission of proposals closes on Aug 27. Announcement of successful bidder, first quarter of 2010. Hub expected to be ready by end 2011.

Other potential facilities: Clubhouse, convention halls, entertainment complex, food and beverage facilities, general retail outlets, motorsports-related services and retail outlets, non-racing garaging facilities, racing academy, research and development facilities, showrooms, warehousing facilities with secure storage capabilities.